Campaign attribution is a popular topic these days. Marketers often find themselves in baffling discussions of which campaign response is most important for a multi-touch customer journey – first touch or last touch – or something else? This raises the question of when is first touch the most important?
I think the answer is simple: first touch is the most important when you don’t have enough lead volume to drive your revenue.
A while ago I wrote a blog post espousing on the topic of funnel metrics which described the 3 key metrics for the sales and marketing funnel – volume, conversion rates, and velocity. It’s this volume metric that’s very important to focus on with regard to the first touch question. If you know (1) your revenue goal for marketing sourced leads, (2) your average deal size, (3) your conversion rates from inquiry to close for the marketing sourced leads, and (4) your sales cycle length, you can figure out whether your current volumes are high enough.
Here’s an example of a company where the lead volume isn’t enough:
- Sales Cycle: 3 months
- Average Deal Size: $10,000
- Average Quarterly Lead Volume for Last 4 Quarters: 1000
- Conversion Rate from Inquiry to Close: 2%
- Annual Marketing-Sourced Goal: $5,000,000
4000 Leads x 2% Conversion x $10,000 = $800,000 sourced revenue
$800,000 is really off the goal. So how would you address it? You can increase the number of leads, improve your conversion rate or increase the deal size. You can also try to shorten the sales cycle. However, the lever that marketing people have most control of is to increase the volume of leads.
And in this case, tracking marketing attribution by first touch makes a lot of sense so you can see the impact of first touch campaign responses.
In contrast to this example, larger companies often have big house lists with fairly complete sets of contacts at target prospects. For these businesses first touch is likely not the most important part of the customer journey but rather some combination of experiences through the buying process.