Why understanding the Customer Journey is critical for safe budget investment

As marketers, we know that the customer journey is complex and nonlinear. Consumers interact with brands through various touch points before making a purchase decision. However, relying solely on last-click attribution to measure the success of your campaigns can lead to misallocation of marketing budgets and missed opportunities. To make informed decisions about budget allocation, it's crucial to understand the entire customer journey.

I'm Thanos Pavlopoulos, and I'm a Paid Social Account Manager at T&P𝒎. With years of experience in the industry, I've come to understand the importance of a holistic approach to marketing that considers all touchpoints in the customer journey. In this opinion piece, I'll share my insights on why understanding the full customer journey is critical for safe budget investment and how adopting a multi-touch attribution approach can help you optimise your campaigns and drive better results.

Why it's Important

According to a study by Google, customers interact with an average of 4.3 touch-points before making a purchase. This means that relying solely on last-click attribution can lead to inaccurate insights about the effectiveness of our campaigns. By understanding the customer journey, we can identify which touchpoints are most influential in driving conversions and adjust our strategies accordingly.

Moreover, failing to understand the customer journey can result in wasted ad spend. A report by AdRoll found that companies that invest in multi-touch attribution see a 20% increase in ROI compared to those that don't.

Social media platforms like TikTok have recognised the need for multi-touch attribution models and are investing in them. For example, TikTok has launched its own attribution tool called "Attribution Analytics" that allows advertisers to understand the customer journey on TikTok —awareness, discovery and action — by providing a clearer view of the non-linear customers' path to purchase.

How to Succeed

However, the most important part is how marketers interpret these insights and how they incorporate them into their strategies. So, implementing a data-driven approach to marketing becomes vital. This involves utilising data to inform decision-making and optimise campaigns. For example, marketers can use data to identify which touchpoints are most effective at driving conversions and adjust their strategies/budgets accordingly. They can also use data to personalise the customer experience and deliver targeted messages to specific segments of their audience.

In addition, marketers can leverage machine learning algorithms to analyse large datasets and identify patterns in customer behaviour. This can help them understand how different touchpoints interact with each other and optimise their campaigns accordingly. For example, they can use machine learning to identify which touchpoints are most likely to lead to a conversion and adjust their budgets accordingly.

A scientific study by McKinsey & Company found that companies that use advanced analytics to understand the customer journey outperform their peers by 85% in sales growth and more than 25% in gross margin. This highlights the importance of investing in attribution analytics and using a data-driven approach to marketing.

Conclusion

In conclusion, understanding the full customer journey is critical for safe budget investment. By adopting a holistic approach to marketing and using multi-touch attribution models, marketers can gain valuable insights into how each touchpoint contributes to the customer journey and optimise their campaigns accordingly. Social media platforms like TikTok and Meta are investing in these models, and studies by Google, Forbes, Kantar, and McKinsey & Company demonstrate the value of understanding the full customer journey and investing in attribution analytics. It's time to embrace the power of multi-touch attribution and navigate the customer journey like a pro!