Guide to U-shaped Attribution
Like other similarly-named models (think W-shaped and Z-shaped models), U-shaped attribution is a multi-touch, position-based model that vaguely resembles a U when you take a graphical look at how it apportions credit.
A multi-touch model means that it takes into account all the different touchpoints along the customer journey, while it’s classified as a position-based model because the amount of credit given to each touchpoint depends on its position within the funnel.
A U-shaped attribution model is pretty easy to understand; the first touchpoint (i.e. interaction that a prospect has with your brand) is given 40% of the overall credit for that sale, while the last touchpoint (the final step before they convert and become a paying customer) is also given 40%. The remaining 20% of the credit is shared equally between all other touchpoints, no matter how many there are.
Using a U-Shaped model for your business
Let’s imagine that you’re a B2C company selling home insurance. You invest heavily in search engine optimization (SEO) and, as a result, most of your prospects initially become aware of your brand organically.
One such prospect browses your website, reads a couple of bog posts outlining why home insurance is so necessary and the potential costs of not having it, and so they then decide to fill out a form requesting a callback. A member of your sales team sees the request and calls them back the following day. Impressed with your prices, and convinced that they need a new home insurance policy, the customer decides to go ahead and buy a policy from you. Of course, in reality, things might be more convoluted than this–the vast majority of consumers would likely check out multiple different insurance providers across a longer timeframe to ensure that they’re sure they’re getting the right deal.
In this example, the first touchpoint–that’s to say, the first time they clicked onto your website from their organic search query–would be given 40% of the credit. If the customer had spent $1,000 on a policy with your company, this touchpoint alone would therefore be worth $400. The last touchpoint (when your sales team called them back) would also be worth another $400, and any other touchpoints in between (such as reading your blog posts) would split the remaining 20%.
Why would this help my marketing strategy going forward?
While you shouldn’t base your entire marketing strategy off one single sale alone, using a U-shaped attribution model will give you an overview of how all your marketing channels and strategies work together to bring in customers.
They might demonstrate for example that most prospects tend to come to your website initially via organic search–so investing in paid ads (i.e. making sure your company is right at the top of relevant queries) and SEO best practices are critical strategies if you’re going to bring in more customers.
On the other hand, you’ve just spent a lofty $2,000 on a comprehensive report highlighting the number of people without home insurance in the US, and what it ends up costing them each year. But as interesting as this might be, it hasn’t received much traction and hasn’t actually featured in any of your customers’ buying journeys. Perhaps it seems interesting to you as a home insurance company, but for the average Joe, they don’t really care about macro-level insurance statistics. In fact, they just want to know that their possessions are safe.
A U-shaped model, by highlighting the touchpoints involved in a prospect’s journey down the funnel (in particular the critical first and last touchpoints), will demonstrate that in the future you should probably avoid creating in-depth research reports and double down on your SEO efforts. By comparing the amount of revenue brought in by any one touchpoint with the amount that it cost your company in the first place, you can subsequently guide future investment into genuinely high ROI activities which will garner the best results.
Pros of using a U-shaped model
A U-shaped attribution model is fairly comprehensive when all things are considered. Its nature as a multi-touch model means that no stone is unturned as it will take into account all the different touchpoints along the customer journey, but give credit to the most important touchpoints. This is especially beneficial for organizations who are looking to maximize every aspect of their marketing strategy.
If you’re just interested to know the bare bones of how customers become aware of your brand, (or which touchpoints usually help them convert), then a single-touch model might be all that your company needs.This notwithstanding, any genuinely useful insights offered up by attribution models tend to come when you stitch together every single touchpoint. After all, the customer journey is just that: a journey. Ignoring all but one of their touchpoints means you’ll miss out on seeing the bigger picture.
Secondly, the rough theory behind how the U-shaped model apportions credit is fairly sensible (all things considered). It’s pretty hard to argue with the fact that, overall, the first and the last touches are by and large the most crucial parts of the funnel. Unlike a linear attribution model, which evenly distributes credit to all touchpoints in the buying journey, a U-shaped model has a bit more thought behind it.
If a prospect never knew about your brand in the first place, they would never become customers; if they hadn’t gone through the last touch, they would never have had the opportunity to convert. The formula also gives you a way to make sure that you’re taking all touchpoints into account without needing specialist data science help.
Cons of using a U-shaped model
While this model is easy to understand and easy to use, it may not be the best option for your business. The U-shaped model is pretty restrictive, assigning 40% of the credit to both the first and last touchpoints, with the remaining 20% split between all other touchpoints. While this provides you with the pivotal points, it gives you a very simplistic view of your customer journey.
Let’s say that your marketing strategy involves plenty of nurturing touches (blog posts, testimonials, newsletters, etc.). This might happen if you’re selling a particularly high-value good. After all, building consumer trust doesn’t happen overnight and customers want to know that they’re spending their hard-earned money on something which is right for them. With a U-shaped model, all nurturing touches would be significantly undervalued (particularly if there are quite a few of them). As these are the true drivers of this customer journey, the U-shaped model is not well suited for such detail.
When is a U-shaped model best used–and when should it be avoided?
Use it: Companies with lower-value items
If you sell lower-value items and you’re just looking for a fairly basic outline of the buyer’s funnel, a U-shaped model might be what you need. If your customers generally tend to convert after only a few interactions with your brand, then the first and the last touchpoints are arguably the main ones you need to be focusing on–the other touchpoints, while interesting to note, aren’t really that important to you.
Avoid it: Companies selling goods with long lifecycle
As we’ve just discussed, it’s not particularly great if your marketing strategy emphasizes plenty of nurturing touches. For this reason, companies selling high-value goods with a long lifecycle should probably avoid using a U-shaped model.