The marketing departments of businesses have been looking to the field of psychology for many years to determine how to best understand the habits of consumers. One theory that is utilized is attribution theory.
Attribution theory dates back to the 1950s but has continued to be a touchstone for businesses to understand how to best relate to their customers.
Overview: What is attribution theory?
In general, attribution theory refers to attributing a person’s actions to a definable cause. In marketing, this translates to how various elements of a marketing plan influence a purchase. An example of how attribution can be applied to consumer psychology is how they interact with a product should it fail.
3 benefits of attribution theory
There are some key benefits to utilizing attribution theory in your organization’s marketing plans:
Attribution theory is seen as a powerful tool for analyzing and optimizing marketing efforts as well as for understanding the motivations of your customers.
2. Identifying important touchpoints
Attribution theory helps to determine which touchpoints during a customer’s journey have the biggest impact, providing a gateway for where your organization should be putting the most focus.
3. Potential increased revenue
Working with attribution theory can give you much greater insight into how to serve your customers and target new ones, opening up opportunities for a greater amount of revenue.
Why is attribution theory important to understand?
Attribution theory is important to understand for the following reasons:
An edge over the competition
While most marketers understand the basic concept of attribution theory, they do not know how to put it into practice. Having an understanding of attribution theory and how to put those insights into practice can give you a leg up on your competition.
Better customer service
Understanding attribution theory gives you the opportunity to offer better service to your customers.
For those striving for continuous improvement, attribution theory gives you a fuller understanding of your customer’s journey, providing insight as to where your processes could improve in order to continuously improve the experience of various touchpoints along that journey.
An industry example of attribution theory
A new makeup company is looking at its revenue over the first year of business and wants to explore how to increase sales. The company decides to invest in attribution theory software. This enables the organization to look at its customers’ first interactions with the organization, its last interaction, and every touchpoint along the way. The first interaction that potential customers tend to have with this business is through social media posts, and the final interaction tends to be the initial follow-up after a sale. The company wants to examine what exactly happens along the touchpoints for the greatest percentage of potential customers that ultimately ends with a sale. The company also wants to see how it can extend the interactions with the customers beyond the initial follow-up after purchase in order to stay in the customer’s mind and foster repeat business.
3 best practices when thinking about attribution theory
Here are some best practices for applying attribution theory to your business:
1. Utilize compliance techniques
Utilize compliance techniques when targeting current and potential customers. The six basic compliance techniques that are utilized in marketing are authority, commitment, liking, conformity, scarcity, and reciprocity.
2. Appeal to past experiences
According to attribution theory, people always draw from their past experiences when encountering a new situation. If a customer has had prior encounters with a similar product or company, that is going to have an effect on how they relate to your product or company. This will be true whether they had a positive or negative prior experience, and you can appeal to this by showing how your company or product positively compares or how your product/company will not give them the same negative experience.
3. Consider product value
Be aware of the value that your customers associate with your product line and how to appeal to it. Some things that customers will attribute to a product’s value are its brand name, price, and peer group.
Frequently Asked Questions (FAQ) about attribution theory
What are the various models of attribution theory?
There is the first-touch model, which considers the very first interaction that a customer has with an organization to be the most important. The last-touch model focuses on which touchpoints ultimately led to a customer’s purchase. The linear model in attribution theory gives equal value to all touchpoints, seeing the value of each touchpoint as variable in its influence on a sale.
How should someone assess their current analytical tools to see if they could hold up to attribution theory implementation?
Current analytical tools should be examined to see if they offer all of the attribution models desired for the type of marketing analysis that an organization wishes to undergo. It should also be explored whether the current analytical tools make qualifying interactions simple. Finally, it should be determined if the tools can be integrated with the team’s various marketing solutions.
How is attribution theory used for resource allocation in an organization?
Attribution theory shows which touchpoints in a customer journey are the most important when relating to your organization. This allows you to know where your company’s resources would best be allocated in order to best reach the customer.
Attribution theory and the future
While attribution theory dates back several decades, it continues to have a major impact on the way that businesses make decisions and how they interact with their customers. With advancements in technology, the ways that attribution theory is utilized have gotten progressively more advanced over the years. Businesses understand their customers better than ever before, and it appears that the fine-tuning of how they interact with them will continue to improve.