Five years I've been threatening this episode and here we are.
We're going to talk about attribution, ladies and
gentlemen, boys and girls, and anyone doesn't fall into any of
those categories. We are going to uncover
something very complicated today, and I checked back in my
show notes. Five years I've been threatening
this episode and here we are. We're going to talk about
attribution. If you haven't tuned in to the
show before, my name is Nick and this is Tuesday.
Tea break talks and we are going to go in.
I don't have guests on Tuesdays. I just try and make sense of
complicated things and give you guys some advice about what we
should be doing. I'm going to jump straight in.
This is going to get complicated and I make no excuse for that.
Before you turn off everyone, and I mean everyone in
marketing, everyone in e-commerce, anyone who works in
Shopify or for any sort of commercial business that has a
website and wants to generate some revenue from that website
leads and enquiries, whatever KPI, which we're going to talk
about at some point in this episode, everyone needs to know
about this. I get probably more questions
than this than anything else. It's super complicated and I'm
just going to explain the topic and then we're going to jump in.
So the topic is called attribution.
And what it means is every time some money gets paid to your
business, the question you should be asking, especially in
marketing and sales is you should be asking or in
management, which covers all of those things anyway.
You should be asking the question, how did we get this
sale? There's money in our bank
account, where did it come from? And you need to better attribute
that to the marketing activity or the business activities that
generated that money. So bringing that down then to
Shopify and talking about e-commerce.
And I'm going to touch a little bit on a whole range of things.
I've got some, I'm beating around the Bush because this is
such a complicated topic and this might not be my first time
of recording this. This is the first take.
So if this goes live, great. I seem to have in my own head
nailed it. But we're going to talk about
how, what channels and how did you get those sales in the 1st
place? So how did somebody go from,
I've not heard of this business or I wasn't going to buy from
this business or I'm thinking of buying a product and choosing
your business. It's a place to buy it from
Gosh, which is also in my notes, the word gosh, I've put in
several times. Let's talk about then how
companies normally attribute the revenue.
And then we're going to talk about some of the issues with
attribution in general. And there is no
one-size-fits-all here. There is no one-size-fits-all.
So attribution in this normally is something like a Google
Analytics for report. You might look at your Shopify
Analytics, which which sucks for this.
Shopify Analytics is good. Once somebody clicks add to
cart, it's not so good at telling you where people came
from, but we're going to get into some of that in a little
bit. But the thing with attribution
will be like, OK, we're running ads on Meta.
We've spent $20,000. How many dollars have we made
back from those ads? And most people, I'm not going
to get on to that yet again. There's so many things.
I was going to tell you what most people do wrong.
We'll come on to what most people do wrong in a minute.
But that's what attribution is. How do you attribute those
sales? And GA 4 tends to be the main
thing that people use and the main place people go.
And I don't disagree with that, but a lot of people don't
understand what the numbers mean.
I'm not going to talk through the numbers specifically.
I'm going to talk about attribution as a whole because
you as a business need to make a bit of a decision tree or some
sort of blueprint for this is how we attribute sales and why,
right? So the issues with attribution,
the issues that businesses face when they're trying to attribute
what money they put into marketing and advertising
compared to what revenue comes out the other end.
And I've got six of these #1 all channels think they made the
sale. So Mehta will say, I ran an ad
to someone and they later purchased from you regardless of
what happened next. And there's loads of issues with
that, that Meta might have shown an ad, someone didn't even see
it, didn't engage with it and obviously not in a buy ready
setting. Equally, it might have been
someone who went, that's a really cool phone case and then
bought a phone case later. So that's one issue.
The second issue is in reality, customers these days probably
use more than one channel to make a purchase from you.
They probably use comparison sites.
They might look at cash back sites.
They might send up to your e-mail before they purchase.
And then does it look as oh, it was e-mail in the set in the GA
four data. It's a nightmare.
Again, I'm using words like gosh, a nightmare.
I've put a note. I've put a note under this list
says just remind yourself what you got into Nick choosing this
topic for today. And if I say anything wrong,
sorry, it this applies to lots of businesses, not all
businesses. The third one then is like the
general journey is there's awareness.
Hey, I think I should this jacket.
I love this jacket. I don't normally wear it at
work, but I love this jacket. It's more of a home jacket and I
love this jacket and it didn't cost me much, but I love it.
There was a point where I saw jackets like this around and
went, oh, I might buy one of those.
And that wasn't related to any advertising, marketing or any
brands in particular. I just saw people wearing them
and went, that's a nice jacket. I like, I like a good collar and
this one is particularly got quite a firm collar.
It's just my style, not that I have any, any style, but there's
an awareness bit. And then the second part is
there's the engagement. Now I, when I went in shops
started going, oh, that's a nice jacket.
Maybe not that one. That one's a nice jacket, maybe
not that one. Or I looked online and went
like, all right, zip, zip jackets with no hoods, you know,
good collar on them, etcetera. And then there was the
conversion point. And I bought this from a brand
in the UK called Marks and Spencer's.
And there was a conversion point.
I walked into a shop and I'd already been looking for these
and I just, I think I walked into one of their stores and
just saw it and went, I'm buying that.
I, I was so far into my journey and Marks and Spencer's probably
did nothing to get me. No marketing, no sales.
I just walked into a store and went, that's nice.
And I've been looking for those. I'll buy that one there.
And there are probably 100 products shown to me, but that
was the one I was like, I've been looking for those.
That's nice. I like the grey, the zip one.
It's made of metal, which is nice.
I don't want a plastic one because it'll break knowing the
way I use clothing. But the point being is there's
these three different parts. See as a brand you need to
decide probably, you probably want exhaust conversion as much
as possible. Be digitally in that place where
I will walk in and go and buy that one.
You want to exhaust that as much as possible.
The second stage, you want engagement.
Definitely. And lots of brands that I think
go too heavily on the awareness bit.
They spend loads of money telling people they exist or
their product exists and not enough to get people down the
bottom of that funnel or hook people in early, which we'll
come into a minute #4 issue #4 so many customers make their
purchase through a channel on GA 4 called Direct Directors.
Your browser's already remembered to go to that site.
So you've come in direct, Nothing's sent you here.
You didn't click on a link here, Your browser just remembered.
And GA 4 generally runs on a thing, which I'll comment to in
a minute called data attribution.
So I told us from my train of thought, data, yeah, sorry,
data-driven attribution. And data-driven attribution
means that if it was like SEO, then direct or PPC, then direct
or meta, then direct, it will show it as meta or SEO or PPC.
It won't, it'll only show it as direct if I know they came
direct in, but I don't know where they came from before or I
don't think the previous journey was connected enough.
I think they've just decided I'm going to buy from Marks and
Spencer's and then they came. So that is also a major, major
problem. So having lots of sales from
direct tells you people come back to buy, which doesn't help
you decide where to spend your advertising money, where to
focus your efforts, where to push marketing.
So that's a nightmare #5 there's six issues here.
Number 5, cookies, GDPR, privacy tracking tool issues, scripts
not firing, technical problems on site, pixels fighting each
other. There's a whole nightmare of
things that can actually just stop GA 4 from even reporting
data. Some of GA 4 now and the same
with Shopify and all the analytics platforms is estimated
nightmare. If you're listening to this.
I just did the like live emoji of like a brain exploding and
like my mind's blown. Oh my gosh, where do we go?
And then number six, even when you've got a tool and say it's
completely bulletproof, it's 100% accurate, which is
technically illegal in most countries, right?
Well, doesn't mean it's illegal. It means the way you've got that
data probably was illegally is once you've got all the data in
a tool, you can choose on some of these tools, data-driven
attribution, you can choose last click attribution and just say
whatever the channel was that led them to a last click
purchase. And that's generally how Shopify
analytics works. Shopify tell you everyone just
came in direct, great. And you go, well, that's great.
I'll turn all my advertising off and suddenly no one's coming in
direct. It wasn't correct in the first
place. So Shopify is not very good at
that and it uses last click or you could even use first click.
However, they came into the site the first time.
I'm going to attribute all the revenue there. data-driven
attribution model is like I explained earlier where people
come in and direct data-driven will say, all right, you've
clicked on a Meta ad, you've clicked on a Google ad, you've
come in from an SEO listing, then you sign up to e-mail and
then you purchase later. I'm going to give a little bit
of your $100 you spent. I'm going to give a little bit
to each of those channels depending on which one you're
the most engaged journey on. Doesn't that sound amazing?
But then number 5, just rolling back one GDPR cookies, privacy
issues to tracking tools, pixels not firing, etcetera.
You won't get that much accurate data.
It's a minefield. This is why I've spent five
years threatening to cover this in heaven.
No guest has. Some guests have offered to come
on and I've spoken to him about it in advance.
Again, I'm sorry, I don't think you understand attribution
enough. And I know I don't know
everything about any of the things we talk about on the
show. So here we are.
This is, I think this is just a kind of like self counselling
experience for me, humbling myself because I talk a lot and
I like to always know the answer.
And I don't know, it's different for every business.
And you have you, you have to accept there's a conclusion of
all those issues. You have to accept there's going
to be some nuances and there's going to be some gaps and we're
just going to have to accept that.
There are some things, however, I haven't actually listed these,
but just coming to mind. There are some platforms, the
tar bulletproof. If Shopify says Joe Bloggs has
bought a product from you for $200, Joe Bloggs has bought a
product from you for $200. If it doesn't say Joe Bloggs
bought a product from you for $200, then I can guarantee Joe
Bloggs has not bought a product from you for $200.
That's accurate, the traffic attribution, but it's not so
accurate with things like Meta ads, Google Ads, if you've paid
for a click, it has sent a Click to you, and it will give you
some information about that click.
It will tell you what page it sent them to.
It will tell you what they searched for on Google, or it
might tell you what ads they've seen on Meta before coming in.
That is bulletproof. It's all this changing channels
and chopping and and trying to tie that revenue bit to that is
difficult. Google Search Console is also
completely accurate. It's all your SEO traffic from
Google. Great.
If someone, if it says there's been a query, someone has typed
in that query to Google and said I need a new jacket with a a
metal zip and no hood. That's what I need.
I want it to be made of cotton, blah, blah, blah.
That's my query. That's the page they landed on.
You know, that bit's correct, whether they bought on that
journey or not, it doesn't tell you.
Shopify just tells you there's been a sale.
It doesn't say it was the same person that typed in that query.
So you we've kind of got both ends of this system, but not the
stuff in the middle. And that's a problem.
So I've got 7 things. The last one as well is I put
pray lol #7. So there's six real things.
But before that there's something you and your team need
to do. Or if you're a solo preneur,
solo entrepreneur, then you need to have a think about this
yourself. You need to decide internally
what your top KPI or KPIs are and I don't think you should sit
round a room going we should just measure this or measure
that or we should just do this. You need to check all of your
data and based on your customer journey, how many times they
visit site, how long they spend on the site, whether they
communicate with customer service or not, sign up to
e-mail before they purchased. There's loads of things you need
to look at and you need to decide what is our top KPI for
this. Here are a few examples.
Your top KPI could just be revenue.
We're going to attribute 25% of everything we spend to marketing
and the other 75% of our revenue needs to run the business.
And so revenue is just going to be our big top KPI.
And that that is perfectly fine for some businesses.
Some are a bit more savvy and they decide to work on profit,
especially if you have varying profit margins, if your profit
margin's pretty static or you make your own products and you
know what that costs per item or, or for every thousand items,
or we know we, we make 1000 items a month and ship those and
we know what our fixed business costs are.
Then you can start to work out what profit is and you can work
on profit. Cos Cos cost of sale or another
one is CTA cost to acquire CTA also in my world means call to
action. So I don't like the CTA, the
cost to acquire one just Cos I don't the same acronym meaning
two things. But basically how much did it
cost you to get either a sale through the site or cost to
acquire a new customer account? So that's quite good, but that
relies on the next one, which is lifetime value.
And then if you go one step further on lifetime value, I did
a whole episode on that a few weeks ago as well.
So feel free to go and check that out and why that's the most
misused, misunderstood metric in any marketing team.
How exciting. Very clickbait, but very true.
So go and watch that. And LTV on LTVONI made this one
out when I was writing these notes.
But LTV on investment. So what's the lifetime value of
a customer relative to the investment it cost you to get
the new customer? So you see, I've, I've actually
combined, I've combined revenue with cost of sale on a lifetime
basis, but you could even go life LTP, lifetime profit on the
investment you made. So if you're investing $80.00 to
acquire a new customer, which could literally be your total,
we spent $200,000 this month and we've acquired 200 customers.
It's cost $1000 a customer. I'm making these numbers up to
keep it simple, but it's cost you $1000 per customer and you
know you've got a profit margin of 50%.
You need that customers spent $2000 on average lifetime to
break even. So now you've got your metrics.
But again, it comes back to the journey.
And the final thing as well is stripping all this back.
And this is also the first point of what can you do?
I actually put what on earth do you do then?
This is an absolute minefield. But the last one, which relates
to the last one on the databits is net and gross profit, which
Shopify will give you gross profit.
It specifically calls it total sales revenue rather than net
profit or net revenue because that doesn't take into account
any of your fixed business costs.
We've had, I think it was, I think we're called Bookkeep.
We had on the show last year and they've got a bit of software.
You can actually put all of your business costs in and use that
software plugged into Shopify to give you lots of insights as to
where you're making money and where you're not, which is quite
cool. So the what do you do?
What on earth do you do starting off with that net and gross
profit figure that KPI, just go back to complete basics, move
some budget between some channels.
Go right. We're spending 20 grand a month
on Google ads. We're spending 20 grand a month
on Meta for one month. Let's just lower Google to
10,000, increase Meta to 30. And you need to decide on the
time frame again based on data. If most people buy on their
first visit or within a few days of seeing an advert or signing
up to e-mail or whatever it is, then actually a month is
absolutely fine. If people take 2-3 months to
decide if they're going to buy, you need to make this shift for
a longer period of time, but maybe watch some of those
initial conversion pieces, the engage traffic, etcetera.
But if you start moving these levers, like amazing guy Nick,
who's the CMO at Portland Lever Goods, we've had him on the show
a few Times Now and Nick said he just, he looks at these big
macro levers and he pulls them based on the data and then
watches what happens to sales. They got quite a quick turn
around between initial engagement and and actually
custom coming in. So it's worth doing a bit of
that. And that's point #1 #2 which I
think is really key. And you need to do this to do
some of these other points if this is the route you want to go
down further on my list. The second one is using human
logic. If it's somewhat, and I said
this already, is it something people would or can buy
instantly or not? The more people need to measure
and check. And if it's a big financial
purchase, like say someone's buying a car, they're not going
to do that online. They have to come to the car
showroom. And this is where every single
car brand, I mean, I've bought quite a few new cars.
I've bought quite a few used cars over the years.
I love, love cars and every single car brand gets this
wrong. For me to buy a car, I need to
go to a showroom. I need to drive the car.
I need to have a conversation about all the different features
and functions that I may or may not buy, and when I actually
purchase the car I want. If it's a used car, I'm going to
phone a completely random garage that might be hours away from
where I live to say you've got the exact model of car with all
the things I want on it. It's that price.
Can I pay a deposit? I'll have it.
Like, well, can I come and see it tomorrow?
Like I'll have it. So you see that journey car
showrooms get this wrong because any car brand, showroom
manufacturer, they always say book a test drive.
No, you should do a consultation, phone call, have a
conversation with us about what sort of thing you're looking
for, what you're not looking for.
It takes 10 minutes. You can choose the time on our
calendar like all of us in the B2B world do.
It's like click here schedule. They get it all wrong.
And so if they started to do that, one of their measurable
KPIs needs to be for marketing online.
How many people have, rather than booked a test drive that's
quite far into the journey. You might be deciding between 5
brands and the, the call to action is do you want to book a
test drive or not? And you're like, I don't know, I
need to look at the financials, how the engines work.
Is it petrol, diesel. You guys think we have diesel in
America missing out. It's good, good stuff compared
to petrol. Is it electric?
Is it hybrid? Is it plug in hybrid?
You've got all these questions first about the kit and the and
everything else #3 on the list. Then get to the bottom of your
data and change the user journey.
If they don't buy on on first visit, ask for an e-mail.
Sign up earlier, sooner rather than later or earlier in their
journey and better or better that you do it now and then you
set a KPI, what percentage of our traffic are signing up to
our emails and you change what the emails are offering.
You change the context you put on it.
You change when you fire it on the page, when it actually fires
to to show somebody. You change those things to try
and increase e-mail sign ups, KPI, and then you can see
because they sign up to e-mail now, we've had all these people
sign up to e-mail on here. How many of them now have gone
and bought a purchase when they sign up to e-mail?
As much as you can attribute the channel in your e-mail system or
as B to B, we call it CRM customer record management.
So we would have in that somebody filled out their
e-mail, joined our newsletter using this keyword on Google
Ads. Bang, we got all that info and
then we can see three months later they bought from us and
what e-mail was it that made them buy is put that e-mail or
that messaging earlier in the sequence now and see if we can
get more people to purchase. You see how smart it is?
It's very time consuming. You see how smart it is rather
than what most brands are doing. What most of us do is just
throw, throw the budget out there and go like, yeah, we made
some profit. Excellent move on.
You probably made loads of losses in all of that and you
just don't know #4 You can do more to influence the first
visit sale as well to help with instant ROI attribution and
building long term, sorry, building LTV lifetime value long
term. What this means is site, some
sites have realised if they put a countdown timer saying sale
ends at this time or if it's quite a small quick item,
there's nothing on my desk right now that I'd buy quickly.
I mean, maybe even these glasses, like if I bought these
glasses before and I was, and you know, I'm a returning
visitor to the same site I bought these glasses from, then
why not just have a very quick like next day delivery if you've
bought from us before, but you've got to order by 3:00 PM
and there's just a countdown going up to 3:00 PM because you
know who I am. And because you sent me that
discount code saying you know what you know, and you sent me
an e-mail saying what happens if your glasses break?
Why don't you get a second pair? You can have 25% off because
that's cheaper than us. Acquiring a new customer means
you bought from us more than once, which means you're more
likely to buy a third time from us later as well.
Have 25% off. And if you order by 3:00 PM
today, they'll be with you in you by tomorrow, they'll be with
you in two days time once we've made them.
So again that instant sale if again you need to look at the
data, is that instant sale the route you need to go down with
this? #5 out of 6 and a funny one.
I thought it was funny. There are tools to help, but
like all tools, they're only as good as the person wielding
them. There's lots of attribution
tools we've worked with over the part in the past, but the
problem is like one of them we were using for a a clothing
business We work we work quite a bit in fashion, in clothing.
Over the years, you'll be able to tell at looking at my outfit.
But one of the things we've found with a lot of these guys
is, well, with one of these, all these tools on the tool, if you
change it to first click attribution, it will tell you
Meta's done like 90% of all your sales.
And we know that's not true, especially when we're spending
like 10 or 20% of all of our advertising budget in Meta.
We've even had the client who for some reason Meta suspended
their account for like 3 weeks. It made no impact at all on
bottom line sales. But after three weeks, nothing
had changed and people bought on their first visit at that
product it nothing had changed. And then the question was like,
are we going to turn this back on?
Like it was suspended in incorrectly, but Meta just
they're so slow. It's OK just to do it.
But he told us that 90% of first click sales were happening
through Meta. Last click data-driven and all
the other attribution models, they were all saying Meta, where
is it 5%? Meta was only driving 5% of the
revenue. So people were finding out we
exist through Meta, but he didn't think that was
influenced, seen their buying decision whatsoever.
So again, money wasted or money well invested, another brand we
work with, we couldn't. We normally see Google converts
better than Meta and they wanted to put more money behind Meta.
Like right, fine, do it. And within about 3 or 4 days of
putting more into Meta, revenue did actually lift.
And it changed the way we ran Google Ads.
Google Ads became more about retargeting the people from Meta
who didn't purchase rather than what we thought was going on is
Meta was doing the retargeting and we're trying to exclude
purchases and customers from Meta, just keep it focused on
new customers or lapsed customers.
And Google was doing all the hard work of like, I want to buy
this. And Google popped up.
We were wrong. They told us otherwise.
We changed it. But the problem is, again, these
tools, they're only as good as somebody wielding the tool.
The person's actually using it. And final one, custom landing
pages. You can do something quite fancy
with a thing called a UTM tag going into GA 4.
You can even create a bespoke journey for certain channels.
And you can do this for your owned channels.
And what we mean by owned is you control where something talking
about your business appears, your advert, your listing.
You can control that. You can control where it goes on
the site. So what we've done for some B to
B clients of ours or lead generation clients, we've
actually created like almost duplicated the entire website
and the user thinks it's on the normal domain, but it's not.
It's actually a version that you can only get to if you clicked
on a Google ad, which means anything that happens on that
site, all the leads we get from that site and you tend to find a
lead Gen. Most people, they become a lead
on their first visit to site. It's quite rare.
It takes more than that, so it's a bit of an advantage there.
But we create a whole separate version of the site or we create
a custom landing page where there is no main menu.
You cannot leave this page to go to the rest of the website.
It's like you're looking for this, here's one page that just
offers you that. And we can see in the analytics
how many people have filled out that form because they'll be
tagged differently in the CRM system if they filled out that
form versus other forms. So we know all about is Google
Ads. And then we can watch the CRM
system, see the sales team's activity.
How many of those people actually qualified into a good
lead? How many then went on to spend
money with that business? And how many then repeatedly
spent money with that business buying their product or service
from there? So point #7 pray.
And I put LOL next to it because I'm having a bit of a funny
morning in the office. Lots of good bands to say, but I
hope that is helpful. My brain feels mushed and I do
talk very quickly, so maybe rewind and listen to it all
again on nought .5 or nought .75 speed.
I hope that's been useful. We talk a lot about this
attribution. You need to come up with a way
of attributing sales to your business.
And most importantly, you need to be aware of the KPI, the key
performance indicator. What is that one number that
means we make more money? Is it e-mail sign ups?
Is it immediate purchases? Is it people who attend a
webinar that we run? Is it people that watch our live
shopping videos? Is it people that follow us on
TikTok that double S the chance of them buying from us?
And to work out what this KPIs are.
Once you know what those KPIs are, you can optimise towards
them and attribution becomes a lot, lot easier.
I hope it's been helpful. We're going to have a much
simpler episode on Friday. I hope you can join me there.
We've recorded a couple already and there's an incredible guest.
I'm so excited. Thanks for tuning in today.
If you haven't already, hit subscribe, Join our newsletter
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Hope you can join us again next time.