D2C Attribution: It’s Guaranteed to Change the Way Vendors Go to Market

More and more vendors are making the jump and going direct-to-consumer (D2C). There are a many reasons why this is the case, but one of the most enticing reasons for vendors to sell their products directly to consumers is the increase in data that they will have access to. Vendors are disconnected from the meat-and-potatoes of their sales and customer data. Their retail partners are the ones that end up collecting all of that valuable data and what is shared with them is often entirely dependent on what they are willing to share and what their agreement dictates that they share. To learn why D2C attribution will be an even bigger game changer, read on.

An increase in the amount of data that vendors have access to allows them to make more data-based decisions. While it may have been preferable for vendors to focus on the production side of things in previous years, moving into a retail industry that relies so heavily on digital sales necessitates that they take a more active role in monitoring those sales and engaging with customers if they want to sustain growth that they have enjoyed in previous years.

Perhaps the most important benefit that comes from making the switch to D2C is the ability to utilize multi-touch attribution. D2C Attribution is the process of tracking and analyzing the steps that a customer takes on their way to buying your product. That can include engaging with an online ad from your company, reading a blog post, hearing a radio ad, or engaging with your brand through social media. With a multi-touch D2C attribution model, vendors are able to understand all of the interactions their brand has with the 67% of shoppers who use more than one channel to make purchases, regardless of whether those interactions take place through digital or offline channels.

“D2C data is a gold mine for any business and this is even truer for the CPG industry. If you think about it, there are no other data sources within the four walls of a CPG or FMCG organization that afford the richness and ‘always on’ feedback loop to demand and supply metrics. This is a dream come true for those tasked with advanced analytics and measurement as it is the cleanest way you can stimulate and measure consumer loyalty and then develop robust data-based decision behaviors around demand sensing and forecasting,” says Vidyotham Reddi, Global Director of Advanced Analytics & Measurement at Mars Inc.

Understanding every step that a customer took, every piece of content that they interacted with, and what materials ultimately drove the most engagement is critical for refining your marketing and sales processes and facilitating growth. Without access to customer and buying data, vendors are reliant on their partners and blind to how real-world transactions involving their product play out for their customers.

Your D2C data is the best consumer feedback you will ever capture. Being able to collect, analyze, and draw conclusions from data that pertains not just to your customers that make a purchase but also those that don’t. Often, they’ll be able to tell you as much about where potential improvements lie as those that do convert. In many cases, your consumer data will eliminate the need to go to third-party sources like Nielsen or InfoScout for customer panels and other similar research services.

Better Understand Your Customers

Using D2C attribution, vendors are able to collect more data, gain a better understanding of their end-customers, and incorporate that data into their business operations. A traditional vendor is missing out on a lot of the modern improvements that eCommerce companies that embrace data-centric approaches enjoy. Keeping their brand shrouded behind the scenes, rarely interacting with the loyal customers that love their product not only hurts the vendors’ long-term growth potential, but it keeps them from making improvements to their product or sales processes that would be a benefit to their customers.

D2C Attribution helps you to understand what is important to your customers. What pieces of marketing collateral consistently play a big role in their decision to purchase, and how are those messages presented to the customer? What touchpoints are genuinely influencing your customer’s decision-making processes? Finding out how to re-create the “magic” of your highest performing touchpoints across channels presents a lot of opportunity for new D2C brands.

Reduce Reliance on Partners for D2C Attribution Data

In the standard vendor and retailer relationship, the retailer has the benefit of being able to collect most of the customer data. Of course, while it may be in their best interest to share some of this data with their vendors, much of it is considered proprietary and what is shared is typically outlined contractually. Further access to this data has to be negotiated.

This arrangement can put vendors in a tough position — if they want to increase the amount of data that they receive from their partnered retailers, they may be forced to back down in another area during negotiations, such as on price. The point is that vendors ultimately end up paying for access to this data, whether directly or through another mechanism within their contracts.

But — the modern eCommerce and retail environment is becoming more data-focused with each passing day. Not having access to purchasing and customer data puts vendors at a serious disadvantage. With less data, they aren’t able to make operational decisions as quickly or with as much confidence. The lack of agility means that they are always a step or two behind the competition and never in position to fully capitalize.

59% of companies say that data collection and centralization is their biggest challenge. Knowing that, why would you leave your data collection up to a partner that provides you with limited oversight and as a result, limited confidence in the results that are being shared? To have faith in your data, you have to set the standard for how it collected and integrated into your strategies.

Identify Opportunities to Improve Loyalty

According to recent research, out of the more than 40 different variables that can be identified as related to consumer loyalty, decision simplicity played the biggest role in consumers decisions to make repeat purchases. They like simple. They want product information and content that informs them and helps them to weigh options and make decisions. Making this information easy to process is perhaps the biggest barrier for D2C companies.

Having that direct access to the consumer and their data can help companies to create a more compelling way for their customers to buy from them. Your data may show you that your customers would prefer a one-click checkout process, the ability to more easily place bulk orders, or appreciate more shipping options. Without having this information at your fingertips, it would be impossible to make informed decisions that actually provide your customers with what they want, rather than what would work to the benefit of your retail partners.

Smart D2C retailers and eCommerce companies are optimizing for lifetime value, not just for the front-end conversion of each customer. Your ability to turn one-time purchasers into repeat customers ultimately plays perhaps the largest role in the effectiveness of your marketing spend and viability of specific channels within your ecosystem. Multi-touch attribution helps you to pinpoint the marketing initiatives that lead to measurable improvements in the lifetime value of the customers that you convert.

Break Down Data & Operational Silos

Channel-specific measurements are, at best, inaccurate portrait of your customers. It is so incredibly rare that a customer makes a purchase today after only interacting with a brand through a single channel and to use attribution models that really heavily on last-touch attribution or a similar model would be selling your complete touchpoint ecosystem short.

With this knowledge, it’s important for vendors that are considering making the jump to D2C to reconsider how they structure their marketing teams. Teams that focus on results-driven through a single channel or strategy (and undoubtedly battling for budget with teams that focus on other channels), need to be brought into a broader, more collaborative role throughout your marketing department. D2C vendors must find a way to incentivize collaboration, information sharing, and common goals between previously separate teams.

Ultimately, D2C companies should aim to have confidence in their ability to capture and utilize data through any channel including social, mobile, video, email, SEO, and SEM. Tying them all together through multi-touch attribution allows for more alignment between your marketing teams and helps to pave the way for marketing and sales alignment within your organization. D2C attribution is the only way this confidence will develop.

Marketing Spend Optimization

A little known fact about the retail and eCommerce industry is that despite the existence of advanced algorithmic attribution models and reliable multi-touch attribution solutions, many retailers still use simpler attribution models like last click or time decay.

That means that there is a lot of room for improvement among the current crop, it also means that vendors that are considering going D2C still have a logical path to gain a leg up on the competition. New D2C brands that embrace multi-touch D2C attribution from the outset will be able to more effectively optimize their marketing spend than the competition.

Being able to attribute up to 80% of your marketing spend or more directly to purchases is critical. It allows you to refine where your money is spent while reducing your spend on channels that you are having difficulty accurately measuring.

Using a system like LeadsRx, you can achieve cross-channel, full-funnel marketing attribution and understand the customer journey in full. Our system includes broadcast attribution, giving D2C companies the ability to directly compare, test, and optimize the effectiveness of marketing campaigns through any channel, including digital and broadcast channels like radio and television.

Know Your Customers, Know Yourself

The recent rise in companies opting for a direct-to-consumer business model shouldn’t come as a surprise to anyone that has been paying close attention. It’s easier than ever for companies (even those without an established digital presence) to harness online systems and solutions and launch their first D2C marketing campaigns.

It simply makes too much sense for them not to, as companies can use D2C multi-touch attribution to optimize their marketing spend, break down operational silos, and reduce reliance on third-party partners. D2C brands can use those insights to better meet the expectations and preferences of their customers and refine their own strategies to better align with those expectations.