Sales Attribution

 There’s a topic in e-commerce that if ever solved in a definitive way, is said to be “a billion dollar solution”, and that is the topic of “sales attribution”. You’ll often hear in the world of e-commerce it can take up to 17 different interactions with a brand before a customer makes a purchase. Of those 17 different interactions which one gets majority credit for the sale? That’s sales attribution.

 We (Joey and I) live on both sides of this conversation, we’re/we’ve been sponsored and we’re owners. How does the value between the two get credited in a “fair way” to the workings of a business? Taking from the skate world (where our margins, costs, and pricing happen to be fairly similar to), from what we know, and what seems to be standard royalty for a pro skateboarder with their name on a board is a couple dollars ($1-$4) per board sold ($55-$70) (this varies on location of the sale, online vs in-shop).

 Operating as a “bootstrapped” business we have no money coming in from another source than our sales transactions themselves. No money coming from elsewhere to even fuel new product growth, let alone being a sponsor (outside of a transaction model or free product). We have no investors or loans, this prevents us from being used solely as an acquisition tool for investors. This is also why “cash-flow” is a commonly talked about issue with bootstrapping. Not saying bootstrapping is the right way to run a business, nor the way they should be ran, its just a way to run a business. There’s pros and cons to both, bootstrapped and investor funded.

 When we started providing these products to the public we came from only knowing one model of operating a business, and that was from the skate world. Create a brand, form a team around the brand (or vice versa), and market it. The team and media around the brand being the main driver of end of the line customer sales, raw product being not much of a differentiator.  Over time we started to realize skateboards and proprietary supplements are fundamentally different products. Operating this guided us to thinking about a “team” and people that promote us in an entirely different way, and how “sales attribution” fits in with both.

 For last year or so we’ve had a Thank-You-Page order exit survey with a 75% response rate. The survey question is…

 “How did you first hear about us?”

 …team and people that promote us fall under “Influencer”.

 Response options and their response ranking:

  1. Instagram Ad
  2. Influencer (Example: Pro Skateboarder, Pro BMXer, Model, Other Athlete, Etc.)
  3. Other
  4. Word of mouth
  5. Our instagram page
  6. Facebook ad
  7. Our Facebook page
  8. Google Ad
  9. Google Shopping
  10. Amazon

 Responses 1-4 vary by only a few percentage points, but in total all 4 make up 80% of responses, so you can see the weight of these marketing option. Responses 5-10 vary quite a bit, but as a whole they only make up 20% of total responses.

 Influencer is up there, but how do we know who they are or how to give them their attributed portion of the sale?

 There’s a well know sales attribution tracking type out there and that’s “Affiliate Marketing” with hundreds of software and programs out there to choose from. We use one that integrates well with our store. We’ve had it for at least 5 years now, it does its job, and works well for people that understand how to use it.

 You sign up, it gives you a custom tracking url, if you get people from your audience to make sales through your custom tracking url on our site you get a portion of the sale.

 The drawback we’ve found using it is that it isn’t friendly to people that don’t have a place to use the custom tracking url. A lot of skateboarders and BMXers only have 1 or 2 easily accessible url locations for their audiences, that’s an Instagram profile url or if they meet Instagram requirements they can use a url in a story “swipe up”. This is why you see discount codes of promoters names or handles being used all over social media. This allows you to be able to verbally tell someone the code, then the only tracking needed to give attribution is to simply see how many sales are associated with that specific code by simply doing a “discount code use” search.

 Whenever we post on our own social media and there’s a place to plug in a link associated with the media we published ( post url) we also put a tracking link (google campaign created) for the person in the post. This also allows us to attribute the sale to that person even though we’re publishing to our own audience. They still provided a piece of content for us to use (with their permission of course), along with us providing them free product.

 We came to this happy medium after coming across conversations of aggregate social media account growing really big on the back of curated content they did not create, with the value in the transaction for the creator being exposure (which can be great), then the aggregate account also can become an “influencer-account” for monetary transactions. This can be looked at from many different perspectives and intentions, but is a big part of this topic.

 We do our best to create discount codes for everyone that reps us and promotes us online. Often they don’t have a blog or location to plug in an affiliate link so through coupon codes we can track the sales that have used the coupon code associated with their name. We will set up different codes for one person to leave room for memory error for the customer ordering using the code.

 Our codes will be made easiest to remember from a spoken conversation, LASTNAME15, FIRSTNAME15, FIRSTNAMELASTNAME15, or SOCIALMEDIAHANDLE15.

 We also give tracking links (google campaign created) for when they do have the location to use a url that easily accessible for their audience.

 Here’s how we set up our percentages around these sales attribution discount codes and tracking links apart from our actual affiliate marketing program...

  • We now pay the person promoting us 15% of the total transaction, the person (customer) using their code gets a 15% discount (equivalent to being a single product subscriber with us, this gives equal opportunity to the promoter) off their order, both together take 30% from our total transaction amount.

 To limit complexity with managing dozens of promoters we wait until their accumulated share of sales attributed to them goes above $100 before we payout.

 Here’s a rough example of what a single transaction breakdown with this discount code/tracking link sales attribution applied then looks like…

  • Website Product Total: $100.00
  • Customer Discount from Influencer Attribution (15% off customers order): $15.00
  • Influencer Attribution Share (15% paid to them): $12.75
  • Sales Total w/ Customer Discount Applied: $85.00
  • Transaction Fee: $2.50
  • Customer Shipping Cost: $0.00
  • Our Shipping Cost: $12.00 (usps priority- weight/dimensions for a $100 order item combination total)
  • Our Product Cost: $30.00
  • Customer Tax Fee: $0.00
  • Our Tax Fee - (state and fed - estimate w/ expense write-off’s applied): $7.00
  • Remainder for Business Operations (insurance, rent, employee pay, product development/growth, advertising, software bills, gas, donations, etc…): $20.75

 At 100 orders that leaves us $2,075 for business operations (insurance, rent, employee pay, product development/growth, advertising, software bills, gas, donations, etc…) and the person promoting us (team/influencer/etc.) $1,275.

 With that rough transaction breakdown example above, the source of the $2,075 number is the margin used to operate our business. Matching that example with reality it has to be at a scale of at least 1,000 orders for it to be large enough for us to consider the skate world model of a small team being paid monthly salaries, sales attribution applied or not. That minimum 1,000 order scale in the example barely covers market rate salaries for the job positions required to operate this business. Getting too, or above that “1,000 order scale” as quickly as possible is the main goal of an investor backed business. The money being put up from elsewhere funnels into the “business” making its purpose first and foremost to become a customer acquisition tool at all cost for the investor.

 Back to health products being fundamentally different than skateboards, bootstrapping in mind, it first makes more sense to support a larger number of promoters getting shares of their attributed transactions vs doing the small salaried team model.

 We hope this gives you some insight, clarity, and transparency on how we look at doing our part to provide for the people that help promote us as a bootstrapped business trying to grow and bring awareness to the importance of nutrition in ones life. We want this to be out there for people to know we’re thinking through these things as best we can, these things that don’t have rules behind them while operating a business.

 So before your next purchase if you feel the want to help out someone that promotes us and you want a 15% discount as well, ask them for their discount code to use at checkout in the “order summary” section at the top of the page immediately after proceeding from the cart page.

We appreciate your time here!

(Discount code of any type can’t be applied on top of already discount subscription selected products.)