The Attribution Nightmare that Sabotages Your Revenue

I see so many B2B SaaS companies struggling with sales, because of revenue attribution and how it is used to set targets.

An insane amount of time is wasted on internal arguments about attribution. Managers and teams are fighting about both attribution models and the attribution of individual deals.

Marketing fights about their touchpoints and attribution windows.

SDRs argue over whether leads are counted as outbound or inbound.

Partner teams want partner attribution on any deal involving a partner

AEs wish to show that they are sourcing their own deals with no support

Even within marketing, there are arguments between events, paid, email, inbound teams.

It's insane.

Let's go through some of the outcomes:

Wasted Time

It is a waste of time because these arguments do not increase revenue. They are only about changing the labeling on the pool of leads/deals so that each team can claim credit. The pie isn't growing; it just gets sliced differently.

Then, time is wasted preparing presentations and conducting reviews for each team to argue why the revenue should be attributed to them.

Loss of Focus

The teams' focus shifts to achieving attribution, rather than growing revenue.

SDRs ignore good inbound leads because they have to show outbound attributed revenue.

Event teams avoid inviting prospects that will not reflect as event-attributed revenue

Marketing runs campaigns to get touchpoints that will secure their attribution windows

Partner teams don't support deals that won't get partner attribution

AEs play games like dropping existing opportunities and then quietly making new ones with different attribution

Resource Demands

Each team starts demanding resources based on their attribution goals. More headcount, more budget, more support.

Candidates for senior roles are selected based on how confidently they will commit to hitting targets based on the attribution model.

Next, those leaders insist that the goals are only valid if they have enough resources to meet the target, so they get more resources.

Then those resources spend time arguing about attribution on individual deals so they can show their contribution.

Trivialises the GTM Process

Deep down, everyone knows that a $50k or $100k or $500k deal doesn't come in just because someone clicked on a Google ad, or stopped at your event booth to ask a question, or answered an SDR cold call.

But you force everyone to keep arguing exactly that point, or risk missing targets and losing their incentive pay. So they stop thinking about how GTM works as a coordinated team effort.

Attribution discussions also take away from more important topics during reviews. When target achievement looks unlikely, all fingers start to point at the teams who are behind on their attribution counts of SQLs, pipeline $, or revenue. Instead of spending time discussing how to get SQLs to Won, we talk about why the SDRs haven't generated enough outbound leads....

Even if the AE is pushing all their committed deals to the next quarter, it's still the SDRs fault, or inbound's fault, or whoever doesn't have enough sourced deals by their team.

It's all crazy.

I'll admit, that when I started in B2B SaaS, the attribution game was fun. Everyone competing to get more pipeline tagged under their team.

In the era of growth-at-all-costs, it was also easy. Capital was waiting to be deployed. The teams that could argue that they needed more budget to reach ever-higher targets, got more budget.

There was a belief that for the company to grow fast, each of the teams had to be contributing independently to revenue. It worked ok for some companies. It didn't work for most.

It definitely doesn't work now. As SaaS sales have slumped, and deal cycles take longer, I see more and more time going in attribution arguments.

There are almost always 1 or 2 successful channels, not 5 or 6. But attribution targets want all 6 channels to be successful, rather than aiming to get the most revenue from the ones that already work.

Frankly, I've had enough of these discussions.

What is the way ahead?

Clearly, the current situation is not ideal. Approx 50% of SaaS companies are reporting that they are missing revenue targets, so the current setup also isn't helping to make more money.

It is a difficult change. So many mindsets and egos need to adjust. So many employees have variable pay linked to the current attribution model....

The key is looking at each team, and asking "What actions should this team take to help us hit our revenue goals?"

Here is a structure.

Total revenue and total pipeline are everyone's goals.

Each team has different actions that they can take to help the company reach that goal.

We want to direct the efforts of each team towards those activities.

Sales

Owns 100% of both revenue and pipeline targets. No difference between sales-sourced and other-sourced.

The only case I can think of where sales don't own 100% is if you have a reseller GTM motion that takes up some % of revenue without sales involvement.

SDRs

There are lots of options for SDR goals, primarily around setting meetings with new logos.

Booking meetings from inbound leads
Outbound prospecting - I think this works best when partnered with AEs
Multithreading pipeline - getting more meetings with other stakeholders for existing pipeline opportunities

The goals should be ICP meetings, or named account meetings.

You should track the number, types, and value of closed deals and open pipeline that have SDR-booked meetings with the account. Not necessarily with the lead that was converted.

Marketing

The question here is - what should marketing do to help close more revenue? The answer often is not 'get more leads'

Here are 5 areas to consider:

Helping sales to generate new business
Pipeline velocity and closure rates for existing pipeline
Customer marketing for retention and expansion
Partner engagement

Depending on your scale, Marketing can also carry different goals in different regions, or with different sales teams.

Region 1 has no brand awareness - marketing to run engagement campaigns and pass intent signals to sales
Region 2 has lots of pipeline that isn't closing - marketing to run pipeline velocity activities such as events for existing opportunities.
etc

A simple option is to create touchpoints with a set of named accounts. Make a list of accounts, make a list of activities that can contribute to sales, and execute and track those activities.

For example. We want prospect accounts to download case studies. Measure marketing on # of case study downloads from a set of accounts. Now marketing can argue that we don't have the right case studies for some segments. Instead of creating random case studies, we start creating case studies specifically for those segments. Marketing will also push for more interesting case studies, with more details that can create curiosity and downloads.

I would argue that this process - creating better case studies, for segments that lacked them, and driving download campaigns - is possibly much more effective than just saying "Generate more leads"

Customer Success

The best metric for CS teams is 'sticky product adoption'.

In your product, there are usage patterns that result in lower churn and more expansion. The CS team should drive the adoption of these patterns.

The second best metric is targeted relationship building. Make a list of important activities and track whether they happen.

Conducted QBR with the decision maker present
Took the user team out for lunch/dinner
CXO level meeting to present the road map
Convinced a CXO to speak at your event.
etc etc

Reporting

Reporting - whether ongoing or QBRs - has to move away from showing pipe and revenue broken up by attribution source.

Present the pipeline and revenue.
Present the metrics defined for each team
Discuss gaps in pipeline coverage
Discuss gaps in the team metrics
Discuss whether the metrics are contributing to the pipeline.
Discuss changes to activities needed.

Avoid slipping back into the 'everyone generates more leads' mindset!