Capitalize on Multi-Channel Shoppers with Better Attribution

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If you’re no longer solely using last-touch attribution, then you’re off to a good start. However, merely using multi-touch data for setting budgets is just turning your channels against each other. Your customers are multi-channel shoppers--use your data to pursue them in their natural habitat. By setting up our attribution system so that historically competing channels could collaborate, we were able to turn overlaps into new opportunities. We’ll take a look at some strategies PoolSupplyWorld has used to unlock additional value from work we were already doing, while breaking down the barriers between traditionally cannibalistic channels.

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Capitalize on Multi-Channel Shoppers with Better Attribution

  1. 1. Capitalize onMulti-Channel Shopperswith Better Attributionwith examples from PoolSupplyWorldRoy Steves, Chief Marketing Officer
  2. 2. Where’d this guy come from?Currently Chief Marketing Officer for PoolSupplyWorld.Started at PoolSupplyWorld as Sr. Software Engineer. Built the engineeringteam, and started the marketing team, becoming Director of Tactics.Software & Automation Engineer at L-3 Electron Devices Devision, workingon ERP stuff and robots that make vacuum tubes.Web Programmer for Build.com, a home improvement retailer, currently thesecond largest in that market, smaller only than HomeDepot.com.Studied Computer Animation, doing a combination of programming and art.As you’ll see, it’s critical to map your revenue model to the economic motives--of your customers, your business, and your team.I also hope to show you the value of discovering new ways to interconnect and cross-pollenate your channels’ efforts and resources.
  3. 3. Goal•Why is Multi-Touch important?•How does it affect the business?•What cool stuff can you do with it?IT’S NOT MAGIC.THIS IS SOMETHING YOU HAVE TO SOLVE, IF YOU WANT TO CONTINUE GROWING.People are worried about multi-device shoppers, but I don’t think we’ve fully figured out multi-session.Let’s get this done.
  4. 4. Only so many Atomic VariablesWhen I started to pick apart basic online marketing, it came down to these four atomic components. You have impressions, clicks, conversions,and the costs associated with all three.
  5. 5. ...produce most common MetricsAnd most of your other fundamental metrics are derived from those atomic variables. More important than just identifying these new units is theiruse to be able to translate from one system of measures to another. If you’re going to weight the relative success of shopping touch pointsthroughout a customer’s shopping session, then you’re going to need to use these to compare apples-to-apples between all of these kinds ofKPIs.
  6. 6. Everyone is Special, Dash...which becomes all the more complex when every partner you might work with is going to be operating on their own special flavor of metric.Remember, it’s not about what partners you pick (entirely), but what you DO with them that defines your strategic advantage.
  7. 7. This obviously doesn’t work...First assist assist LastThese bars represent the steps a customer takes to finally making a purchase, in chronological order. The first touch is where they first encounteryour brand at all. As they shop around, they will come back across your site, and eventually convert at the last touch. If you aren’t doing anyoverall attribution modeling, you effectively get double-vision. If you asked the channels (say these are an affiliate blog, then Nextag, thenAdWords, then a Facebook coupon) how much revenue they produced, they might all report $100, for a total of $400, when you only have $100 totake to the bank.
  8. 8. Or even worse...First assist assist LastThis effect can be made even worse if you have more than one CPA or commissioned network. For example, if you’re on both CJ and GoogleAffiliate Network, this might be the final total apparent revenue. It will look like you did six times the revenue you actually did, and you’ll havepaid for six orders’ worth. Obviously, this isn’t sustainable.
  9. 9. Better, I guess, but totally incomplete...First assist assist LastMany organizations, once they realize the duplicity of no attribution system at all, move to Last-Touch, where only the channel that closes thedeal, and is the last to interact with the customer, gets credit. This helps accounting massively, as all the dollars add up, and there’s somethingvery satisfying about suddenly being able to measure a direct ROI on advertising dollars. But that’s an illusion--you’re actually choking out allthose earlier touches that might be driving new customer acquisition. It also puts the channels against each other, in a race to the bottom of thefunnel.
  10. 10. ...to paraphraseThis is a summary of a conversation I actually had with my Affiliate manager. His claim was that most of my AdWords ads were for specific SKUs,so the customer had already done a bunch of research, including on his affiliate partners’ blogs, and PPC was swooping in to steal the last touch. Icountered that the other half of his network was coupon sites, which are all about sniping the last touch. Last Touch attribution lasted less than60 days at our organization, as it was immediately apparent that it made our channels cannibalistic, eating each other alive.
  11. 11. so... on Shifting to Multi-Touch...First assist assist LastSo that’s was the final straw on Last Touch for us. We did some research, and designed a Multi-Touch model that we felt reflected our customers’shopping behavior most accurately.
  12. 12. Pretty drastic on Last Touch, though...First assist assist LastWhich looked something like this. This “U-shaped” attribution is fairly common, but you probably won’t (and I hypothesize, never will) find an“industry standard” curve, as customers don’t shop for pool supplies the same way they shop for cosmetics, the same way they shop for insurance.Nevertheless, first touch is usually rewarded for customer acquisition and filling the funnel, and last touch is rewarded for closing the deal at theend. This has nothing to do with what channels are what--it’s not like PPC gets 30%, and Affiliates get 25%. Rather, just to be clear, the share ofthe revenue is attributed based on where in the shopping process a given touchpoint fits. Last touch gets 30% (let’s say) regardless of what thattouch was.This is some major sticker shock to channels used to getting Last Touch credit, however, as it look like they are earning half the revenue (or less)than they were the day before.
  13. 13. Difference between best and worst case is massiveFirst assist assist Last...but this is the same kind of sticker-shock that happened during the transition from no-attribution to Last Touch, as you recall. It’s important totake a breath at this point and remember that your business was alive and profitable yesterday, and is probably going to be so tomorrow.
  14. 14. Attributed Revenue / All Touched RevenueNevertheless, these were some example channels and their share of orders they touched when we first moved to Multi-Touch attribution. We knewthere was going to be some overlap. Display, for example, we figured would be around 50%, as our primary display channel is a remarketer, andthat traffic had to get to us originally, somehow. Still, we figured it was going to be something like 15% overlap, or 85% share of touched orders.When it turned out to be much lower share than that...
  15. 15. ...step away from the spreadsheet, sir.Huge realization: ourshoppers areFUNDAMENTALLY multi-channel....well, it made me a little nervous. I had massive sticker shock, I’m not going to lie. Luckily, my team got over that quickly, and somethinginteresting happened.
  16. 16. ...meanwhile, among the team... an economy is bornThey started to haggle! There was suddenly a system of arbitrage that maximized the value of each lead, or visitor. If one channel had leads, andcould derive $10 from them, and another could derive $15, there was a $5 value that could be negotiated in the middle. We started to get allkinds of new cross-channel strategies out of the blue. It was amazing.
  17. 17. Customer looks for a coupon...Now, to examples! This was the first cross-channel arbitrage we executed. Imagine a customer is ready to buy, but wants to find a coupon tosave a couple bucks. They’ll often go to Google and search for my brand plus ‘coupons’, and find any number of sites that they can get thatcoupon from. That’s all well and good, and they’ll probably convert, but there’s something I don’t like about trusting strangers with leads that areso close to converting that I can taste it.
  18. 18. ...and I pay a commissionWorse, most of these are affiliates! I’m going to pay a small commission IN ADDITION to giving away that discount. My margin is evaporatingbefore my eyes.
  19. 19. High Quality Score, at least!So, I decided to try something. I bought ads for these keywords, and directed them to my coupons page. My Quality Score for my own trademarkis very good, so the clicks cost me almost nothing, and it worked. It was much cheaper than affiliates, and conversion rates went up. Our couponspage wasn’t very attractive, though, so I tested auto-applying the coupon, and landing them back in their own cart, and that worked a little better.When it comes down to it, what am I getting for that coupon? Customers are going to coupon shop, that’s not going to change, but it seemed likethere had to be some way for me to get more value out of the exchange with the customer than I was getting. There are really only a couple ofways that I could think of. First, go for a higher AOV, but we were already doing up-sells on our site and in our cart. Second, was target LifetimeValue, and try to find a way to market to these customers again in the future.
  20. 20. What else can I get for that coupon?Our email channel was still in its infancy, but we had another Lifetime Value-focused channel already online--Facebook. We pointed those ads at aLike-Gated coupon tab on our Facebook Page, and an interesting thing happened. Despite the third party, and the additional clicks, it crushed ourprevious coupon strategies. For what ever reason (exclusivity? a feeling of fair exchange?), customers liked this more than either of the previoussystems, and they converted like crazy, and I was able to keep my brand in front of them in the future. We use Facebook to tackle the fact that noone drives by my storefront every day on the way to work, like they do my brick-and-mortar competitors.
  21. 21. ...and Like they did020,00040,00060,00080,000Q1Q2Q3 Q4 Q1It worked like crazy, and we even won an award, booming from 37 to 75,000 fans in a little under a year.
  22. 22. ...or even better......but you know what’s worth more than a Like? An email address. Once we were ready, we redirected a portion of that coupon traffic to an emailsignup that would deliver the coupon to their email address. Once again, an interesting thing happened. Despite the additional clicks ANDpersonal information, customers liked this even more. Every metric improved. We had a higher CTR, higher conversion rate, lower bounce rate,even a higher AOV! We now redirect about 85% of coupon traffic to email, with 15% still going to social.
  23. 23. A lot of work went into these:Now, think about what resources you might have that would carry value in such an arbitrage system. As email marketers, you have lists andsegments that other channels would KILL to have. Think of all the work that you put into those, that you might be able to save someone.
  24. 24. ...so let’s target those folks elsewhere!One example is Facebook custom audiences. You can download your segments, upload those to Facebook, and all FB does is compare thoseemails versus the email address they have registered. If they match, you can target those people with display advertising! We got PPC-like CTRson a promoted post (as opposed to the display in the above example) that we targeted to recent customers. As you’re not sending emails, you cantarget any type of segment, too! What about unsubscribers? One-time customers not opted-in? ...more?
  25. 25. ...but that’s a lot of Coupons...RevenueNow, a lot of the strategies I’ve talked about are coupon-driven, and while coupons are a necessary evil, they eat into your margins andprofitability. Arithmetically, channel managers’ performance evaluation techniques have a lot in common with sales commissions. (This is betterdescribed in a Real Estate context in the book, Freakonomics). Basically, if you’re measuring success based on revenue, then a 5% discount is arelatively small dent in an overall commission. What happens when you adjust individual performance evaluation metrics to more closely resemblethe actual business realities in which you operate?
  26. 26. So operate on a narrower % (GM or analog, for example)RevenueBut if you evaluate performance based on a percent of a percent (say, margin), then a 5% discount might look a lot more like a 20% dent tocommission. The same is true for marketing channel strategies, especially if they rely heavily on discounting. We actually did this--we made thischange in strategy to our commissioned salespeople. Want to see what happened?
  27. 27. Does it work?These are the relative % discount averages for our salespeople for the past seven months. At that fifth month, we implemented the new margin-focused evaluation system. They got a larger percent of a smaller portion of the order, and behavior changed overnight. We didn’t retrain anyone.We didn’t reprimand anyone. We didn’t beg. All we did was change how we were measuring success.
  28. 28. ...it did for us.65% loweraveragediscountAnd by refining success, we lowered discounts by 65%. Our conversion rate didn’t change at all. That means that while some customers willalways want to use a coupon, we were giving away money we didn’t need to. Our revenue stayed exactly the same, but our profitability went up.
  29. 29. There’s a ton of business to be earnedNow, most of those cross-channel strategies use obvious link-points, mostly data feeds and APIs. Here’s one that’s a little less obvious.Why would a customer buy from me when there’s a pool store just around the corner, or down the street, or (more likely) both?
  30. 30. This is why we exist:• They are terrible. They messed our pool up more than I can tellyou...• Apparently this is their policy: If it’s been over 7 days since you...• The lady that works there was rude and unhelpful so I left andwent...• Arrogant, over process and high pressure sales• I have lost faith in their ability to perform accurate water analysis...• Horrible customer service at this [franchise name]. The womanthat...• We just had our pool resurfaced. Received no info on how tobalance the...• (no reviews)• (no reviews)• (no reviews)Here are the reviews for all 10 Leslie’s on that previous slide. I didn’t omit any of them. Customers are not getting what they want or needcurrently, and it’s my job to try to provide that for them.
  31. 31. Quick! To the Internet!And those are what you see if you mouse-over any of these map indicators in this mini-map we built.
  32. 32. How do you make a page for every city?And we embedded that mini-map into a custom landing page, and drove searches for “Rocklin pool supplies” to it, directly calling out our priceadvantages and free shipping. Ok, so this is all well and good for Rocklin, CA, but what about the rest of the country? How does THAT scale?
  33. 33. You don’t need to.PPC CLPBut this scaled because of the combination of a couple of features in AdWords and our platform’s custom landing page tool. On AdWords, I usedexact-match keywords to target the top 1000 cities in the US by revenue, coupled with “pool store”, “pool supplies”, “pool supply store”, etc. Ithen used Dynamic Keyword Insertion to add the keyword that triggered the ad to the destination URL. The custom landing page gets that URLparameter, strips out the city name, figures out the most likely state for that city name, and passes that to the embedded Google Map (along withLeslie’s name), and I suddenly have custom local content for each of my most important cities. The Quality Score on these keywords is great,because each version of the landing page is highly relevant to the search, such as “Houston pool store”. In theory, I could even swap out theexample products for products that are popular in that region, if I had the competitive data for them.
  34. 34. Once, IT requests were a challenge... for ITSo, those are all examples where there were advantages to the collaboration of channels. There was another--before we started using ourattribution system to our advantage, Marketing requests to IT were chaos--they were done in order dictated by who shouted the loudest. The bestcase scenario, the team leads would have to sort through dozens of redundant and overlapping requests, and try to accommodate everyone.
  35. 35. IT requests are fewer, and better coordinatedHowever, once the channels were working together, those redundant requests almost vanished. Now, report requests and new tools were pre-packaged for cross-channel efficiency, and we get a LOT more out of IT by asking for LESS.
  36. 36. Once you understand the link-points...If you have a Multi-Touch attribution system, somewhere, whether internal or 3rd party, there is a record of all of those interactions.Ours was an internal system, called Grinder, that was originally set up as a session recorder. Think of it like a poor man’s Tealeaf.But as channels coordinated their efforts, there were expansions made to Grinder--where the DATA lived.
  37. 37. You can start to hook them all togetherGrinder became part session replay, part CRM, part datamart.You have the same opportunity, and it doesn’t take as much tech as you think.You don’t need a data scientist to pull this off.You could do a more distributed version, like a web, with individual data pools.Look at Bronto’s custom fields, or the Received API Event trigger node in Workflows.In his Keynote yesterday, Joe described the goal of making the Marketing Database more and more sophisticated, as that’s where theinteractions are stored. That’s Grinder.
  38. 38. Remember1. Your customers are telling you morethan you realize.2. Your customers are fundamentallymulti-channel shoppers.3. You can do more with the tools andresources you already have.
  39. 39. Questions?I love this stuff, try me.There were! One was how were we accounting for phone orders. Two ways: first, we have a help-code on the site that is tied directly to a customer’s CartID andcookie. When they call, we ask for the help-code, and use that to hijack their cart, and that ties the CSR’s browsing session to the customer’s original session. Itdoesn’t carry cookies over for third-party trackers, but that doesn’t stop us from being able to track those. The other is that if the customer fills out a lead card (callback request, or similar, too), we store that Help Code in that form as a hidden field, so we capture 100% of those help-codes.Another question was how did we come up with the attribution percentages we chose. We experimented, basically. We learned as much as we could using ourfirst draft about how our customers shopped, and then modified our model to reflect the best case scenario at each of those steps. We don’t tie together a literalsingle customer profile across all associated touches, like Knotice does (not a client), but we emulate the result of such a system by optimizing the levels of thefunnel as individual black boxes.The last question was “Do you have a blog?” First, that was the most flattering thing I’ve ever been asked, and really appreciated how great the audience was.Second, I do: Roysteves.com, and there’s even a Perl pixel tracker article on there, which you could use as the very first step in building an attribution system fromscratch, if you wanted to. :)
  40. 40. Thank you very much.Roy StevesCMO, PoolSupplyWorldroy@poolsupplyworld.comSeriously, thanks!

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