Bullhorns & Bullseyes Podcast

What is Marketing Attribution?

Guests: Tom Nixon & Curtis Hays
February 20, 2024

Episode 12

In this episode, Tom and Curtis discuss the topic of marketing attribution, the methodology of attributing a purchase or lead to its source in a marketing campaign. They highlight the importance of measuring marketing effectiveness beyond simple conversions and discuss the challenges of tracking attribution in a complex digital landscape. They emphasize the need for a common vocabulary between sales and marketing teams and the importance of collaboration. They introduce the concept of the marketing efficiency ratio (MER) as a more complete and transparent metric than simple “ROI.”


  • Marketing attribution is the process of attributing a purchase or lead to its source in a marketing campaign.
  • Measuring marketing effectiveness goes beyond simple conversions and requires a granular level of detail.
  • Collaboration between sales and marketing teams is crucial for effective marketing attribution.
  • The marketing efficiency ratio (MER) is a more transparent metric than ROI and takes into account the lifetime value of customers.
  • Tools like Triple Whale and CRM platforms can assist in tracking and calculating marketing attribution.
Play Video about Episode 12

Tom Nixon (00:00.99)
Episode 12 of Bullhorns and Bullseyes. Curtis, today we are going to talk about marketing attribution.

Curtis Hays (00:09.325)
Fun topic. It doesn’t sound fun by its name, but this has probably been mentioned one way or another in almost every podcast that we’ve talked about. And they all sort of like interconnect. So I think it’s going to be fun for you and I to just do this overview today. And I think it’ll help a lot of listeners out.

Tom Nixon (00:10.67)
Yeah. It’s.

Tom Nixon (00:28.703)

Tom Nixon (00:33.29)
We promise not to get overly dirty and technical because, yeah, it doesn’t sound like a fun topic, but it’s really what it all boils down to when it comes to marketing. So we will get into that defining what it is and why it’s so important and how you measure it, things like that. But before we do, I wanted to remind people to hit the subscribe button, as they say on podcast. So if you’re watching us on YouTube, subscribe there or listening on your favorite podcasting platform. Make sure you subscribe. We do like reviews and ratings, by the way. So

Be sure to do that. If you’re looking for older episodes, obviously you can find them wherever you are currently either on YouTube or on your podcasting device. But you can also find everything you need to know about Bullhorns and Bulls eyes at Bullhorns Bulls eyes.com. No and in there. So, okay, with that out of the way, let’s turn our attention to marketing attribution. And before people either fall asleep or change the channel, let’s define what it is so they know why they should listen. What are we talking about?

Curtis, we’re talking about marketing attribution.

Curtis Hays (01:32.853)
Yeah, I think at its simplicity, it’s attributing a purchase or a lead that comes through a marketing campaign. It’s attributing that success to its source. So if you’re running a Facebook campaign or you’re running something on Google ads, you’re sending that traffic to your website and something happens, a goal, they fill out a form.

They purchase something if you’re doing e-commerce and it ties that event back to the campaign. So when you have a report and you say, well, what was the effectiveness or what’s my ROI? You wanna be able to attribute that to a marketing activity you’re doing. So we’re talking about attribution. It’s attributing the activities you’re doing in marketing to the goals and activities you’re likely doing on your website, conversions or purchases, those types of things.

Tom Nixon (02:30.314)
Yep, it’s gotten more sophisticated. I think in recent years, because if you think way back to the beginning at the genesis of like e-commerce, it was you were measuring. Did we or didn’t we kind of and now we want to measure not only did we or didn’t we? It’s how did we where did we who did we or who did they? Because you’re trying to maximize obviously anything that you do. You mentioned ROI. You’re trying to maximize your effectiveness. However, at some point in time, you want to take the available data that you have.

Curtis Hays (02:40.354)

Tom Nixon (02:59.97)
Feed it back into the system, which we’ve talked about on multiple podcasts prior, and we’ll get into a little bit here. But if you’re only measuring the high level, sort of like, are we selling things? Then you’re going to miss a lot of this because you want to have some granular level of detail, right? Which we could talk. Give us some examples of marketing attribution metrics that go beyond. Did we convert or did we not convert?

Curtis Hays (03:28.885)
Yeah, well, I mean, and like you’re saying that today’s sophisticated, um, sort of marketing world compared to back in the day, especially from a digital perspective, you probably have one or two primary traffic sources, you know, it might’ve just been Google and you know, you were measuring traffic that came, you know, through Google. Now you have so many touch points because there’s so many different platforms.

Tom Nixon (03:44.855)

Curtis Hays (03:54.133)
So you might be marketing on Facebook, like we’ve talked about. You might be on LinkedIn, plus you’re doing Google ads. Plus you’ve got visitors who come through your email marketing campaigns and people don’t convert the first time they come to the website and then they come back again on another channel. So we’ve really moved to what the providers would probably call a data driven attribution model, which is taking into account all these different touch points and then saying, you know, what, well, what were the things that really assisted?

in this, uh, in this event, in this action that happened on the website that we’re going to count as a conversion. So you might see if you’re running Google ads, uh, some conversion data that shows you’ve got over this last week, 4.5 conversions, we didn’t get half of a person that purchased or half a person that filled out a form it’s because it’s giving credit to, you know, partial credit to the Google ad campaign and then partial credit.

to something else and your analytics might show that data where you could drill down and actually look at assisted conversions versus, so there’s different models. This would be a data-driven model. You’d also have your last click or your first click. So those would be your attribution models that you could look at to kind of say, hey, what percentage of

my last click conversions come from certain traffic sources or first click driven, you know, how do users originate? So when you start to look at these first click, last click and the data driven, you might really then start to drill down what does the user journey look like for my customers? It might then tell you how effective different marketing is whether from its brand and it’s fresh and it’s cold traffic or you’re remarketing and like, well, how many touch points does it look like we need to connect?

Tom Nixon (05:38.476)

Curtis Hays (05:49.793)
before we really bring somebody in to get them to convert. So, it’s not perfect, and certainly Google Analytics is far beyond I think what a lot of companies would like to be able to see. And it’s really expensive to get access to technologies that really do a good job at building this together. I’ll add one more thing. We’re in an age where privacy is becoming

even an even bigger concern. So it’s becoming even more difficult because of privacy settings and browser settings and those types of things to even track this even close to 100%.

Tom Nixon (06:20.878)

Tom Nixon (06:30.89)
Yeah. This is where I’m sort of two minds on this too. It’s just to I’m going to have a confessional right in front of you live in the podcast is that I on the one hand, I’m going to preach how important this is. On the other hand, there’s a huge challenge because not every purchase is a direct line, right? So, let’s think of the B2B world, right? Where maybe they’re putting together a bid list. Who knows, right? And you’re going to be on the bid list and there’s no like

Curtis Hays (06:38.177)

Curtis Hays (06:47.425)

Tom Nixon (06:59.298)
direct line between, hey, we did this activity. Somebody then did the thing we wanted them to do. They clicked the link. They got to our site. They filled out a form. Boom. It’s nice and easy. That’s we can easily attribute that path. B2B or B2C, whatever it is, it’s not uncommon for a purchase to look like this, which is I got an ad. I’ve been seeing in ads. I’ve been in the market for a car for, let’s use that example, for three months because my lease is up.

But for the past three years, I’ve had my eye on this Ford. Bronco, that’s what I got, right? And partially it was because of an ad I saw on TV during a football game. I see them on the road. I like them. You know, part of my allure is, hey, I see other people driving them. Maybe I got something in the mail and it was from a dealer who’s offering, you know, to get me out of my lease early. And then I do a Google search. I like, well, where does this?

Curtis Hays (07:34.537)
Thanks for watching!

Tom Nixon (07:59.462)
dealership live. Here’s their website. Maybe I decide even I’m going to tell this long story because this is a true story. Maybe I decide even to build my own Bronco on their website, right? And then I decide, you know what? I don’t like that dealer. I’m going to this other dealer. I Google them and I find them and then ultimately I walk in and I purchase. How the heck are you going to track that right to any single activity? So it’s like on the one hand, this is super important and I know you’re going to say probably there is some ways to connect some of that, but you also can’t get so

Curtis Hays (08:18.022)

Curtis Hays (08:21.233)

Tom Nixon (08:28.618)
marketing attribution that you will only do things that you can find attribution for because you’re missing a lot of opportunities, right, wrong, or correct me. My confessional is over.

Curtis Hays (08:37.989)
Yeah, no, you’re, I think you’re a hundred percent correct. I mean, you talked about so many different activities that in many ways are unmeasurable, the commercial, which is virtually unmeasurable. You, there are data models. So even GA4 builds data models, but you can build data models that basically say, Hey, when are commercials running? What does our website traffic look like? You know, so, so you get some level of attribution to a lift of traffic that might be happening.

Like we just had the Super Bowl yesterday, right? So companies are gonna be measuring the effectiveness of what happened in those commercials with the lift that they received yesterday and today of people that are coming to their websites, maybe using coupon codes, scanning QR codes. You know, if you got that flyer in the mail from the dealership, there might be a code on there. There might be a unique tracking number, what you could call this number, that’s unique to them internally and they could track how many people.

called from that postcard. Organic QR code that could be on there, those things are trackable. So there are ways of doing it, but to connect it all the way through to your specific sale time, purchasing, you know, that’s tough. And there’s a metric we’ll talk about today that you look at marketing over time and sales over time and you connect those two together.

Tom Nixon (09:53.015)

Curtis Hays (10:06.013)
There is a level in there, which is easier to do in an e-commerce world where you can say like this specific person and their name and what they purchase. We can connect that back to campaigns. It’s really easy to do that in email marketing. It’s usually really easy to do that when you’re doing paid ads. As soon as you start to get outside of that, extremely difficult.

Tom Nixon (10:28.554)
Yeah, right. So I guess that’s the point I’m making is that, you know, to be a the danger in becoming a marketing attribution, absolutionist would be we’re only going to do things that we can track because we need to show ROI. So we’re not going to do any of the other things, maybe bullhorn activities because we can’t track those. We can’t say this directly led to a sale. And but specifically, I’d like to ask you about connecting a dot for a sale that does happen.

Curtis Hays (10:37.722)


Tom Nixon (10:57.618)
As the result of a campaign maybe, but maybe it goes outside of that direct line. And it’s like, I got the ad. Ooh, I saw the ad. I clicked on it. I want to purchase this thing. And then I decide, you know, I’m just going to call them and I pick up my phone and I call them and let’s say they don’t have a number I’ve just, I Googled their office and I’m calling them directly, you know, and I talked to someone and I end up buying, right? So how do you, aren’t there ways to connect those offline activities to the online campaigns that you’re running?

Curtis Hays (11:15.337)

Curtis Hays (11:25.349)
Yeah, I mean, if you have a CRM, there are ways of certainly connecting. So, yeah, which is a customer relationship management tool. The big names out there, Salesforce, HubSpot, Marketo, Zoho. Now there’s dozens of them, but those are some of the bigger ones. And the bigger ones do have direct integrations with many of the ad platforms like Facebook and Meta.

Tom Nixon (11:30.858)
CRM being just for those who don’t know the…

Tom Nixon (11:37.195)
Like a Salesforce.

Tom Nixon (11:41.288)

Curtis Hays (11:54.005)
LinkedIn and of course Google ads and their APIs when connected could take the offline conversions that happen inside the CRM and push them. So like in an e-commerce world, this is, let’s take a step back and mention. One of the most critical things that you, they probably the most critical thing you need to do if you’re doing advertising is set up conversion tracking, which means your developer advertiser.

maybe if they’re two different people, they need to work together, but you need to define what it is you’re measuring, a lead form, a checkout on a website that includes revenue and products and product IDs and all of that. You need to be able to send that data somewhere, back to the usually back to the ad platforms when that event happens. The reason for that is then you can inform the platforms and you can report on, hey, this click led to this action.

But also the platforms learn off of that data. Right? So in an e-commerce world, that’s pretty easy. That setup isn’t easy, but it’s easy when somebody just check out, there’s a direct integration back to the platform. So it sends in real time, Oh, Hey, Curtis Hayes checked out and purchased these three products for this dollar amount. And Google has that information immediately. Now I can learn and be like, Oh, Hey, I’m going to go find more Curtis Hayes’s and their journey that are similar. And I’m going to lead them to the website.

In an offline conversion world where we’re doing, let’s say lead gen activities, or there’s a purchase that happens offline, that real-time piece isn’t there. So if you’re able to, um, update the CRM and create what would be a purchase stage or a qualified stage, that then you can send that data via API in the same way you would with a cart and a checkout.

You can send that data. You have a 90 day click window. So you have 90 days from the time the click happened to either a qualified event or a purchase event to send that data back to the platform again. So we can learn on it or you can report on it.

Tom Nixon (14:00.574)
And to clarify, you’re talking about manually keeping track of this information, either in your CRM or even a spreadsheet.

Curtis Hays (14:07.269)
You could do it in a spreadsheet. It could be your own spreadsheet that you import, or it could be a Google sheet that’s even connected to the platforms that updates with, say, like a Zapier. Yep.

Tom Nixon (14:16.85)
Mm hmm. And in the case of Curtis Hayes, Curtis Hayes, then will you not the buyer Curtis Hayes, the actual real Curtis says, we’ll take that spreadsheet and manually that import that data back into Google and align the fields. And so it’s not a matter of. So I guess the point I’m trying to make is no matter how sophisticated you think you are on the client side, you’re sophisticated enough to keep a spreadsheet up right to say this. Tom Nixon bought here’s.

Curtis Hays (14:23.175)

Curtis Hays (14:29.043)

Curtis Hays (14:42.182)
Yeah, totally.

Tom Nixon (14:45.578)
what he bought and here’s where he clicked through.

Curtis Hays (14:48.593)
Well, and this creates two things in my opinion, well, it can create accountability between sales and marketing, because now you’re creating that feedback loop where sales has to update either qualified or converted and share that data back with marketing. So marketing has the opportunity to observe that and learn from it, and then they can import it. So that, I mean, that just accountability piece in there, and then the feedback loop just is.

So valuable and so critical and what it, how it transforms businesses. Well, we see it typically happen is, is pretty incredible. And you just go back to the first three episodes with Mario. We spent 8% last less in advertising last year, but had, uh, close to a 75% increase in total revenue. So, uh, and that’s all just because of improved attribution. So, uh, yeah, go ahead.

Tom Nixon (15:44.795)
It’s speaking of past episodes when we had Amy Schuster on, who was a fractional CMO, she talked about the topic near and dear to our hearts is that this chasm that can exist between sales and marketing teams. What you’re talking about too, not only are you creating mutual accountability so that they have to talk to each other, then it starts working and there’s visibility into what’s working. And now these barriers start to go down between for whatever reason, if they exist within your organization, which is typical.

Curtis Hays (16:09.317)

Tom Nixon (16:13.302)
They start to collaborate more. And when you’ve got sales and marketing collaborating more, that alone can represent the lift that you’re describing just because it’s not typical for this reporting to go back and forth. One of the things she talked about, Curtis, was just coming up with a common language, right? Like what I call a lead. I’m a marketing guy, right? I sent you 20 leads this week, right? And I’m the marketing guy. Think of what 20 people clicked on my ad and went to their website. So there’s 20 leads. Boom, boom, boom.

Saleswipes say we didn’t get any leads out of that. Wait, what? So refresh our memories if you would like what is the importance of at least just coming up with a singular vocabulary?

Curtis Hays (16:40.921)

Curtis Hays (16:54.521)
Yeah. So the vocabulary, um, defining what leads are maybe defining what a qualified lead means, you know, there’s typically an organization might have a sales playbook. Where that way they bring on new sales people. They have a playbook to work from of how they’re going to bring that prospect. From, you know, unqualified and completely unaware of, you know, the value proposition of those things all the way down to a customer.

Right. And, but there’s often missing a marketing playbook or the sales playbook connecting to that and being shared with the marketing team. And then marketing comes up with their own vocabulary, sales comes up with their own vocabulary, and then nobody’s speaking the same language. So, um, you know, you just don’t want to end up in that situation where, uh, sales says, Hey, we’re not getting enough qualified leads and marketing says, well, what are you talking about? We’ve given you, you know, all of these qualified leads and sales is like, well,

Those aren’t qualified though. It’s like, but we thought they were right. So, I mean, there, there’s specifics in that playbook that says a qualified lead means X, Y, and Z. You know, they’ve been, uh, you know, maybe it’s we’ve actually had a demo call. And marketing thought, well, we thought it was qualified when you scheduled the demo and sales is like, no, we have a 50% cancellation rate on schedules. So we changed it, but nobody told marketing.

Tom Nixon (17:56.828)
Right, exactly.

Tom Nixon (18:23.202)

Curtis Hays (18:23.225)
Right. So then it’s like, well, okay. So it looked like we were successful, but we’re not. And then, but then that might not be a marketing problem. That might be a systems problem. Oh, well, why are people canceling? Maybe we should have a tool there or maybe we should create some sort of follow-up to make sure that people don’t cancel and we’re sending them reminders about their upcoming demo or, you know, other materials that could be coming in email so that they do attend the demo. Because we have a really good close rate when people do.

Tom Nixon (18:35.128)

Curtis Hays (18:52.189)
get the demo, let’s say, right? So you figure out once you’re measuring all of that, like where you can make little improvements and these little percentages, like they can make a big difference, right? So if you have, if you start at the very beginning and you say, hey, here’s how many visitors we bring to the website, then you might only get 2% conversion rate. We bring, you know, a hundred people to the website. That’s only two people that sign up.

So 2% isn’t all that good, but then maybe when it comes in, you say, hey, like we have a 30% conversion rate at this level and then 20% conversion rate at this level. But if you can incrementally pull up those little percentages in each stage, like what it does to the output at the very end is like exponential. It’s like, oh, a 10% improvement here and a 20% improvement here and a 5% improvement here. It’s like all of a sudden the output at the end is, you know.

Tom Nixon (19:41.185)

Curtis Hays (19:49.597)
50 to a 75% improvement. You know, it’s like, wow, that compounds itself, so to speak, as you move down the funnel. It’s like everybody can improve. Nobody’s perfect.

Tom Nixon (20:00.074)
Right. Yeah, exactly. The other thing I’m thinking of going back to how this plays into attribution and having this common vocabulary is you might be set again. The marketers objective is to just get people over into sales, right? Like I’m done. I’ve completed my process. Now it’s on the sales and if they drop the ball, it’s sales problem. Sales is thinking. Well, yeah, you’re sending me a hundred names a month, but 98 of them aren’t in market. Don’t can’t afford us, right?

Curtis Hays (20:14.054)

Tom Nixon (20:29.93)
And so really, you’re not sending us 100, you’re sending us to. So now if there’s common vocabulary and there’s like, well, a qualified lead has to have these sets of criteria and anything else we don’t want. Going back to marketing attribution, once you get a conversion in a close and a sale and that person becomes a client, that’s the data you feed back into the algorithm, correct? It’s like just now that we both agree on what a real conversion is now, at least the algorithms can learn from that.

But without all of that attribution and it’s, Hey, I sent you 100 leads and you dropped the ball on 98 of them. That’s not helping anybody. Cause now they’re creates this wall again, between sales and marketing. They don’t know what a good prospect looks like. They’re screwing up the sales after we hand, you know, deliver a hundred leads to them. So, um, I don’t know if there’s a question in there other than have you worked with, uh, companies that once they agreed that this is a lead and only this is a lead, or this is our ideal client.

persona. Do you got to see a lift there too, once you’re then feeding that data back in.

Curtis Hays (21:30.457)
Oh yeah. Yeah. That really is the secret sauce. I mean, you do need some volume to pump into the platforms. I mean, it can’t just be two or three a month that it really learns off of. So like with Mario’s case, we’re a year and a half in with 80 to 120 leads a month, right? So Google’s had well over 1000 to learn from. So you know, and that just becomes a flywheel. It continues to learn over time.

Tom Nixon (21:40.236)

Curtis Hays (22:00.817)
To simplify what you said though, in some real world examples, one specifically, let’s just say your conversion action is a form fill. And you’re asking Google Ads to optimize based off that form fill. Well, let’s say your Google Ad gets susceptible to spam.

And some spammers, they could be real people that going to the website, it’s not a bot who are filling out the form. They could be vendors, you know, who want to sell you cleaning services. I see that all the time. You know, a bunch of different things. But now all of a sudden, that’s the conversion action and Google’s learning off of that, but it’s all junk that comes in internally. And so that is really why if you’re in this lead gen world,

that can’t be your conversion action. It might be at first, because you need a little bit of time for Google to learn a starting action. Just like if you had an e-commerce website, you might want to have it to start learning off of just people adding to the cart. And then once you’ve gotten a bunch of checkouts, then you can switch and say, hey, only learn off of people who check out. So in that world, we need to.

Say, yeah, we’re going to start measuring off maybe phone calls and form fills. But once we know who the people are, once they come internally and what it is that we’re sending back, I’ll just add this really quick, a little bit technical. There’s, uh, in Google’s world, it’s, it’s called a GCLID, which is the click ID, you have 90 days from the time that person clicks to import that, and you’re not importing that person’s information. You can, but you need to hash or encrypt that information.

if you’re gonna give name, email address, phone number, and purchase information. If you’re gonna send that data to Google, it all has to be encrypted. Most people don’t know how to do that. But if you just have the GCLID, Google already has that in their system, this unique identifier to that person, and it’s storing that data for 90 days. So now when you import that offline conversion, that connection’s there, Google has that stored information, it knows the history on that user, and it can associate it to the campaign and everything that you.

Curtis Hays (24:19.909)
You brought in now there’s what’s making this even harder is new privacy and cookie list browsers and all this. And iOS came out with iOS 14 new settings that all of a sudden, if you were in your looking at your camp, your data and say over the last year or two years, all of a sudden your campaigns aren’t performing as well, and you see all this direct traffic, which means. Your analytics can’t determine where the user came from. So it just associates it to direct.

Curtis Hays (24:54.13)
Those are basically, because of the privacy settings, it couldn’t collect the GCLID. So Google’s moved to now what’s called G-Braid, which is like an upgraded new version of the GCLID. And you can import the G-Braid value. So there’s different tracking and things that you need to be able to do on your end.

to make sure you’re collecting that. Again, if you’re using like a HubSpot, it’s gonna collect all that data for you on say forms. But just to know this world is ever changing, you’ll never get to 100%. So don’t try to get to 100%. And then with the data modeling, like data modeling means it’s making assumptions in there and applying things to certain areas. So you can’t take that as like real.

data like you could somebody walking into a store, like that’s a real person. And then that real physical purchase, like sometimes Google’s just like, well, we couldn’t, we didn’t know exactly, but on a typical day we see this. So let’s give this conversion to an organic visitor. That’s what modeling’s doing. So it’s giving you an estimate based on the data it’s getting.

Tom Nixon (25:49.165)

Tom Nixon (26:04.162)

Tom Nixon (26:08.19)
Interesting. Well, let’s talk, um, the C-Suite’s favorite acronym ROI. Um, because I’m sure everyone says, Hey, Curtis, we’re spending this money advertising. I want to know what the ROI was, but ROI is an dangerously oversimplification of the metric that I think you should be looking at when it comes to marketing attribution. Um, we talked about maybe a better way to look at this where we brought up a different

acronym, which is M-E-R, and that is the marketing efficiency ratio. What is that? How does it work? And why is it more maybe transparent than just say, tell me what we spent and how many sales we got.

Curtis Hays (26:35.719)

Curtis Hays (26:48.357)
Yeah, so well then you’d also have ROAS or return on ad spend. So ROAS would be you take how much money you spent in the platform and then how much money came out on the other end. And then you do that difference and that’s your return on your ad spend. ROI, you’re taking into consideration more than just ad spend. So what were your costs in there? What was your total investment? What was the revenue that came out? You do that.

division and there’s your return on investment. That all sounds great, but if you’ve been listening and we’ve been saying these attribution models aren’t perfect. You might be looking at a specific campaign then and saying, gosh, I didn’t get a really good ROAS or not a good return on investment in our Google marketing and you decide to turn it off. And then all of a sudden two months go by and you look at your numbers and you’re like.

Well, wait, our sales are down or our pipeline isn’t as full. I mean, this happens all the time in lead gen where it’s like, Hey, let’s start some, and you, as you know, like a bullhorn effort, right? Let’s do some branding campaigns or one thing we do digitally that is extremely difficult to do attribution to is video ads, or say you do radio ads, you do like I heart radio or something, right? So you can’t measure, measure the attribution because nobody’s clicking, they’re listening or watching. So.

Tom Nixon (27:49.026)

Curtis Hays (28:17.509)
You turn something like that off because you didn’t see it was working and then, you know, here the leads dropped, your funnel dropped and, or your revenue dropped and you’re like, well, what happened? Well, there was this assisted, you know, conversion or assisted attribution that was happening that you weren’t taking into account. So therein lies marketing efficiency ratio where you take all of your marketing.

Tom Nixon (28:29.44)

Curtis Hays (28:44.165)
And then all of the revenue you’re receiving, not just what’s coming from a specific campaign. And you divide those two together. And you need to look at it over time. So this isn’t something you look at a specific day, a specific week. I would even say monthly is difficult to look at. This should be a quarterly metric, a yearly metric. You’re looking at it over time. And you’re inserting into that time period your marketing activities.

And then measuring what happens with that MER ratio, you know, in there. So you say, Hey, we’re going to, we’re going to do Comcast and spend 60,000 on a commercial for the next quarter. So that you’re going to measure that quarter plus maybe the lag time and say, take that $60,000 investment, plug it in and then say, Hey, was there an output that increased our total marketing efficiency ratio during that time period? That makes sense.

Tom Nixon (29:36.118)
Right. It does. And I would say going back to the example I used to when I finally purchased a Ford Bronco. I don’t know why I say that. So probably purchase the Rolls Royce or anything, but the event can lag behind the spend by a lot. And so when you turn it off and then you see your sales lag, you know, six months later, now you’re confused. Wait a minute.

Curtis Hays (29:48.777)

Curtis Hays (29:54.524)
A lot.

Tom Nixon (30:04.034)
How what did we do differently in this last month or two? And it’s not what you did differently in that last month or two, perhaps it’s what you turned off six months ago because there’s always this sort of bleed-on effect. And so I would say there’s a danger in saying a we’re going to turn something on. Let’s start measuring it today if it’s working or be let’s turn it off and then you’re misattributing maybe a the continue bump. Maybe that you’re getting right in your say, well, see, we turned off the advertising in nothing happened.

didn’t go down at all because at six months later a year, now you’ve suffered from, well, your brand hasn’t been out in front of any prospects or customers. People don’t know you. They don’t think of you. And now they’re not even filling out forms. And you’re like, well, wait a minute. So that’s why it’s kind of this goes back to yes, what you said does make sense. And this is why I think attribution is so important to a do, but B to not just overly like scrutinize and say,

anything that’s not clickable is invisible to us or anything that’s not visible to us isn’t an important metric because that’s just, that’s not how humans behave all the time. Right.

Curtis Hays (31:07.905)
I think you’ve been in marketing a little bit longer than I have. But I want to say you before, uh, before there was all this tracking, I think companies had to have patience with their marketing. And I think with everything’s happened in the digital age, um, many executives. Now lack patience or, you know, mainly in sales and marketing.

Tom Nixon (31:10.826)
Hey now, hold on. Oh, wait.

Tom Nixon (31:31.35)

Curtis Hays (31:35.801)
And so you don’t give your marketing time to run its course. And then if you’re not measuring, again, over time or measuring correctly, then you don’t know what’s working or not. So I feel like we do live in a world where it seems like customers want everything tracked.

Tom Nixon (31:58.764)

Curtis Hays (31:59.045)
And it’s, you track every dollar you spend in a company and it’s like, yeah, we want to track it, of course, and that’s where this metric comes in, but we have to have patience, we have to let things run its course, can’t turn on a campaign. Like you’re turning on a spigot, watching the water come out and, you know, all of a sudden the pipeline is going to fill. Things do take time. And, uh, you’re so just talk to like, you know, your bullhorn type activities of like.

Tom Nixon (32:16.308)

Curtis Hays (32:29.009)
warming up that pipeline. We’ve talked about customers needing to see a brand before they can make a purchase decision. How many times did you need to research that Bronco before you felt comfortable making that purchase?

Tom Nixon (32:42.646)
Okay, and I didn’t do this all in these trackable ways going back to that some of it, which I did and to use the example of a car now, right? So the demand can be unpredictable, which is why you just can’t say well, we’re going to turn this on. We’re going to, you know, take a huge bite out of this existing demand. That’s just ready to be marketed to if only they can find us and then we’re going to, you know, step for its profits with step three being question mark question mark. That’s a nice little South Park reference.

Curtis Hays (32:46.108)

Tom Nixon (33:11.658)
Or is it family guy? Anyways, off track. So in the example of a car, right? So if I were to receive 10,000 digital ads a day, 60 mailers in my mailbox for a new car and 20 ads on the TV, even if I wanted that new car, I’m not in market. I have no interest, desire or plans to buy a new car until my lease is up or this car’s got a hundred thousand miles on or whatever it is. So

You can’t all just wait till the time when somebody is in market to market to them. And since you don’t know when that is, that goes back to your point. There’s a lot of things that aren’t attributable to things like a, a video or a radio ad, things that I don’t think we should be tossing out simply because we can’t measure the click.

Curtis Hays (33:56.377)
Mm-hm, yep. Yeah, and in the world of advertising where things are trackable, we’re seeing costs go up. So I mean, I think this is a recommendation that I would make to a lot of companies is consider the marketing activities you could do from a branding perspective. I know many of them you can’t measure, but the cost now is so much less. With some clients that are paying $75 a click in Google Ads and

but we have two cents of you if you were to do YouTube ads. Right, so it’s like, gosh, the reach I could get you with a video, but you’re still paying $75 a click and you only convert two out of every hundred people that come to your website if you’re lucky. It just seems like a high cost to me for some of those things. I’m not saying you should do one or the other because there is no one thing, but to start considering

You know, other activities and again, having patients, it’s even, even though you can track organic visitors to your website, sometimes it’s not easy to, um, like let’s say you’re doing content marketing, there’s a significant cost in content marketing, not just in SEO, but in writing and researching and the publication of that content, the syndication of that content that like.

but you might spend a year or two creating content before you ever get your first client from that content. And then how do you measure that? Right, yeah. So again, like these investments you will likely need to make, but have patience that, you know, and then know the value. I think this is one calculation we need to talk about is know the value of your customer and all this. Like you can’t make these decisions if you don’t understand the value of each customer. And I don’t mean off of a single purchase.

Tom Nixon (35:29.318)
right? And sometimes you won’t even know. Right?

Curtis Hays (35:54.245)
I mean, what’s their lifetime value? So if it’s a e-commerce client and they purchase once, and that’s the only thing you’re measuring is that first purchase. That’s a big mistake because email marketing and other activities, if you’re selling products where you’re going to get repeat customers, it’s in those repeats where all the value comes in. So maybe you’re setting up models where like, Hey, we’re going to do marketing to a one-to-one cost to first purchase.

And then know that our profit comes when customers come back in the second and the third purchases, right? Or in an offline conversion world where you’re selling maybe professional services, do clients sign a contract and your typical client lasts for two years, three years? So don’t just count one month of revenue or the first year of revenue. Look at your average lifetime value and that should go into your calculation.

So somebody like Mario is doing that now. They have a formula depending on the service that the customer’s purchasing from their company, they have a formula that calculates based on that service, how many hours that client is likely to use, and then that goes into the system as an estimated lifetime value for that client. And then we measure everything and all of our effectiveness on campaigns off of that lifetime value.

And that’s how we can get our marketing efficiency ratio. So it may not be actual realized revenue, but in their case, they’ll never know actual realized revenue until. You know, way, way down the road. And it’s far too past learning anything from what it is we’ve doing, but their business is mature enough that they could make this educated calculation and still have it come out right, you know, in the end.

Tom Nixon (37:44.414)
And I think they’ve even gone so far as to factor in referral revenue from an existing customer. So that’s again, that’s more complex. And like I said, it’s more data projection. But I think it’s the main point or takeaway is that it’s not just the initial purchase that you’re buying with a click or whatever. The thing is, you’re trying to attribute it’s the lifetime revenue. And so I guess, you know, if there’s a takeaway, my takeaway is if you’re not doing any sort of sophisticated marketing attribution.

Curtis Hays (37:48.897)
Mm-hmm. Yup.

Tom Nixon (38:14.39)
you should be and you’re missing a lot of data on the other side. If you’re only scrutinizing marketing activity based on what the attribution data is telling you, then I think you’re taking it too far. Is that fair?

Curtis Hays (38:27.601)
Mm-hm. Yeah, totally fair. And I think if I can, can I plug a couple tools here? Okay, so I think if you’re in e-commerce, likely you’re probably using Shopify, maybe WooCommerce. Invest in Triple Whale. Triple Whale is an analytics platform that helps you do attribution. And then you’re gonna simply install a script that connects directly with Shopify and WooCommerce, and…

Tom Nixon (38:33.515)
Yeah, for sure.

Curtis Hays (38:57.085)
The data you’re going to get out of that tool is going to be so much better than the data you’re getting out of the native platforms like Google ads and whatnot. You could do the comparisons and whatever, but, um, and it’s going to do calculations for you like estimated lifetime value and, and actual lifetime values and different things like that, because it’s going to pull in also your Shopify data and do calculations that Shopify natively doesn’t do for you. Right. So really powerful. Then I think, you know, get some help if you’re in that offline conversion world.

Tom Nixon (39:04.173)

Tom Nixon (39:20.832)

Curtis Hays (39:26.233)
And you’re using a CRM HubSpot has some reports and things and calculations. It can do Salesforce has all kinds of dashboards calculations that you can do, or just build reports that you could easily get your data points and then put them in some spreadsheets and you just calculate the different stages of the funnel in this, in the spreadsheet. For us, it’s real simply like how many visitors to the website, how many conversions did we get on a form and phone call?

Yeah. What was our cost per conversion? You know, how much money did we spend to get all of that? And then you have the CRM data. So of those conversions, how many were marketing qualified? How many were sales qualified? How many became clients? Now you can, you repeat, do all those calculations. What did it cost per marketing qualified? What did it cost per sales qualified? What did it cost per client? What was the revenue output? Do those calculations. So easily run this on a spreadsheet and they get just reported over time, month over month.

quarter over quarter, you can start comparing year over year. Now you have your marketing efficiency ratio. All that data’s there, so it’s really easy to just take it and then run calculations like marketing efficiency too. So it doesn’t have to be difficult. It doesn’t have to take that much time to pull these numbers together.

Tom Nixon (40:37.387)

Yep. Great. Well, those are some good tools to share. Final plug. I would like to plug once again Bullhorn’s bullseyes.com. We would really like your comments. So if you have feedback on episodes like this or you’ve got things that you want to learn about, you want us to cover on the podcast, put them in the comments of LinkedIn or wherever you find this episode and others. So thanks. Thanks for the education. I was told there’d be no math. So I am getting out of here as an English major before I get hurt.

Curtis Hays (40:51.537)

Tom Nixon (41:10.471)
We will see you all next week, Curtis, on bull horns and bullseyes.

Curtis Hays (41:14.717)
See you soon.


Listen anywhere:

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Additional episodes:

Aimee Schuster Episode 5

Episode 5: Aligning Sales and Marketing

Fractional CMO, author and frequent podcast interviewee Aimee Schuster joins our pod to break down her view of what ails many sales and marketing departments in organizations today.

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Episode 4: Going Meta on Bullhorns & Bullseyes

In a very "meta" episode, Curtis and Tom discuss the meaning behind "Bullhorns and Bullseyes." What are some examples of "bullhorn" tactics, and what are some examples of "bullseye" methodologies?

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Episode 3:
Closing the Loop Between Sales & Marketing

Curtis and Tom are once again joined by Mario D'Aquila, Chief Operating Officer of Assisted Living Services, for Part Three of our multi-chapter success story.

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