In today’s episode of The Startup Chat, Steli and Hiten talk about how to get marketing attribution right.
One of the most important thing a marketer needs to know is whether your campaigns are driving revenue or not. If you’re unable to answer this, you’ll struggle making the right marketing campaigns. While vanity metrics like number of shares on social media and open rates for your emails are super easy to find, the important data – the one that tells you which helped close a sale – is less obvious.
In this week’s episode, Steli and Hiten talk about what marketing attribution is, what startups need to do to get marketing attribution right, why you should do the best you can with what you’ve got right now and much more.
Time Stamped Show Notes:
00:00 About today’s topic.
00:30 Why this topic was chosen.
02:40 What startups need to do to get marketing attribution right.
03:59 How to make decisions based on the data you collect.
04:22 Why you should do the best you can with what you’ve got right now.
04:53 Best practices to use.
05:24 Why you should regularly audit what you track.
06:50 Tips for tracking your data.
07:46 Hiten’s game on attribution.
11:59 Steli’s big take away.
3 Key Points:
- I just assumed that more companies will have marketing attribution figured out.
- If you know better, do better now.
- Do the best you can with what you’ve got right now
Steli Efti: Hey everybody, this is Steli Efti.
Hiten Shah: And this is Hiten Shah. And today on The Startup Chat, we’re going to talk about marketing attribution.
Steli Efti: Yeah.
Hiten Shah: There’s a very specific reason why. Steli share why we’re talking about this.
Steli Efti: Yeah. So I think talking to a ton of marketing leaders recently, we’re looking to hire leadership on the marketing side of the Close. And so I’ve been reaching out to many super senior people, that work in really amazing organizations to ask for advice. And one thing that really surprised me and it didn’t, because on the one hand, I know that every company’s full of shit and all things always look better from the outside. But then again it’s good to be re reminded. But one thing that surprised me still in the moment, was that a lot of these people would share like the problem of running marketing organizations for really big SAS companies. And we were talking about the type of companies that are like 20 to 40 million in ARR, right? So much later scale. And one of the things when I asked them about like big projects over the last couple of years, things they wish they’d known and done differently when they first joined. The surprising thing is how many of them said, “Wish we’d had a data and attribution models figured out earlier.” And some of them even like they worked at analytics and metrics SAS companies, were like, “It’s really embarrassing. I would never admit this publicly, because we’re an analytics and metrics company, but we don’t have our metrics analytics shit figured out. Our stuff doesn’t work, our attribution doesn’t work and we’re still working on fixing that.” So it was surprising to me to see, I knew that early stage, a lot of companies don’t get this right, but I felt like at the 20, 30, 40 million, I just assumed that more companies would have marketing attribution figured out or prioritized. And it seems like it still was a struggle for many. So I felt like, maybe this is a topic. Maybe this is something we should bring up as advice for SAS companies. So that they don’t get to this level of scale and still struggle with it. And you’ve built a number of analytics and metrics companies, you’re pretty famous in this area. So just wanted to like quickly pick your brain and share it with the world in terms of like what should startups do to get marketing attribution, right? What do they have to do and why is it so difficult for most of them to do it?
Hiten Shah: Yeah. It gets more complicated as you scale. And you start going away from channels that are directly measurable, which already has marketing attribution issues. So directly measurable would be people visiting a website, right? And you knowing that those people converted and signed up, purchased, et cetera. So then you get into like basically channels like billboard ads, TV and things like that, where a lot of the things you’re doing, your goals are oriented around awareness. And then you have to think about how to measure those things and include that in your marketing mix and then figure out how to attribute it as well. So I have this like … Man Steli, like you couldn’t have picked a better topic that I can go so deep into, down to the how you track every single visitor appropriately so you can do the attribution appropriately, all the way up to or in the middle would be like your marketing stack. And all the way at the top would be like how do you make decisions based on this information? And there’s no right answer. I know folks, even at very large companies that are very big, ad based companies, which I’m not going to mention that struggle with this as well internally. Regardless of how like sophisticated large, multibillion the businesses are. And so this is one of those where it’s like do the best you can, at the point that you’re at right now.
Steli Efti: With what you have. Yeah.
Steli Efti: Yeah. I agree. I think that in the early days of this and KISSmetrics [inaudible] were pioneers in the space. There was a lot of, I think effort put in to build an analytics products that would make you understand where is traffic coming from, how is it converting, why is what happening? It was very marketing top of funnel focus. And I don’t feel like the products that were out there, like solved that problem. And I hit in some like elegant and universal way and now everybody’s rushing towards more product analytics, which is also super important. But that first product problem is still around. It’s crazy and there’s not a simple or single solution that lots of companies could use that fixes this for them, which is fascinating. All right, so I mean you are a genius in this space and there’s not much more that I can add to any of this. But the one thing that I’ll say, I think the most important thing I am taking out of this, which is a very universal lesson, but we have to apparently relearn it again and again in all different situations, is how we started this episode. Do what you can, wherever you are, with what you have right now, right? And so I feel like the advice that we have, is that the worst thing you can do is one of two options. One is to say, “Well, we don’t have x.” Whatever x is, an engineer developer, resources, money for marketing software, or whatever else. “We don’t have something, hence we cannot do attribution. Hence we’re completely going to ignore it.” That’s really bad. And the flip side of that coin is also equally bad, which is we need to get this perfect and right. We have never dealt with this. I mean, you are in a very different spot of saying, “I’m going to get distribution right from the get go.” Because you have an amazing amount of experience. But for most companies and most founders saying, “I’m going to try to make this my number one priority and get it perfect and get it right.” Means probably either procrastinating way too long on doing anything, because it’s like, this is going to be this overwhelming massive project. Let’s push it down the road or it’s going to be, you start off and you run out of steam or by the time you’re done, you realize you spend too much time, too much money, too much effort, and it’s still not right. And so those two strategies are probably really bad ideas. The alternative that I think we want to share here is, think about it as improvement versus perfection, right? Think about like what do we understand about attribution today? How can we understand a little bit more about it tomorrow? How can we continuously add to our understanding and add to it? And would you mention what’s just like, here’s a simple way to segment. Let’s just even look at first time visitors that convert. That’s one group, that’s a really important group. Let’s try to understand there’s just one that one group. And once we got that, let’s try it on and send the next most important group. That’s a beautiful way of going about it. I remember one time talking to the marketing genius and going, “Wow, we don’t …” This is many years ago, four years ago or something. I was like, “Wow, we don’t have really the attribution model to really understand what marketing that we do has brought people to the trial sign up.” And that friend was just like, “Well you call people, right?” And I was like, “Sure.” He’s like, “Why don’t you just ask them?” And I was like, oh my God, face palm moment. I’m like I’m here screaming at people. You should call people just like you should talk to people and learn everything you need from your customers. And here’s me at the same time complaining that I don’t know where these trial signup people came from, although it’s easy for us to figure out. And then we did. That very day, we called a bunch of them and for the next couple of days and this was not perfect, but we got a lot of insights by just for a couple of days calling. 100 or so trial sign ups and asking them and having conversations and seeing patterns, right? Which needed no software and no analytics whatsoever. Just needed us having a bunch of conversations. So this is a really important part of how you build your business. Don’t get overwhelmed, don’t push this problem down the line. Just continuously chip away at it. Try to get better and better at understanding what in your marketing works and why and how. And don’t wait till you’re a multibillion dollar company to then hire a whole department and give them three years to work on this. Hopefully you’ll get there much, much sooner.
Hiten Shah: Yeah. And just to be clear, like we wouldn’t have worked on the analytics. We didn’t start the project until I had it on the list, but we didn’t start the project until we had a product market fit. And we knew what this business was going to be and we were going to like pursue it like seriously. And the reason for that, is all the measurement that we’re going to do, and we are a very high velocity business. The business we have with FYI is a freemium business. And so the analytics matter that much more. We would have tried our best to get away with like tools in the market, whether it’s mixed panel, amplitude heap analytics, or the number of other ones there if we could have. But what we realized is that there’re certain things that they just don’t track very well, specifically around this kind of stuff, marketing attribution and things like that, that we’re just going to build it ourselves. But again, we know what we’re doing. So it’s a little bit different than most people who would do it, but we still waited even though we didn’t know what we’re doing and we knew we did it. We waited till we knew this was a idea worth pursuing before we spent the time to build the custom stuff.
Steli Efti: Beautiful. All right. This is it from us for this episode. If you enjoyed it and you’ve not done this before, please do us a favor. Go to iTunes, give us five stars, give us a nice little review it’ll make us more visible. More people will listen and the Czech community will grow until next time. This is it from us. We’ll hear you very soon.
Hiten Shah: So yeah.