Conversion and Conversion Path

A customer journey is the path or matrix of interactions a customer has with a business across various channels, over a period ranging from days to months to years. The interactions shown in the customer journey in Exhibit 27.8 may lead to conversions, which is the proportion of users who perform a target action, such as making a purchase, subscribing to a newsletter, and so on.

The ability to track the customer journey and analyse conversion rates is important for businesses to understand and optimize their marketing and sales strategies.

Conversion Attribution Models

To allocate marketing resources effectively, it is essential to know which channels and elements of the marketing mix are driving conversions. Attribution models help to assess the importance of each channel in driving conversions. The most widely used models, depicted in Exhibit 27.9, use heuristics or thumb rules to allocate credit for conversions to different touchpoints along the customer journey. The allocation criteria for these models are as follows:

• Last Touch Attribution: Recognizes solely the marketing channel directly preceding the conversion.
• First Touch Attribution: Credits only the first marketing channel in the customer’s journey.
• Linear (evenly weighted) Attribution: All channels get equal credit.
• Position Based Attribution: First and last channels get greater credit than the rest.
• Time Decay: Attribution decays exponentially from last to first touch.
• Customized: Attribution is based on some thumb rules.