Closed Loop Marketing: What Is It And How Does It Work?

Closed Loop Marketing: What Is It And How Does It Work?

Are you struggling to determine the impact of your marketing activities on your sales?

Chances are you might be drowning a lot of money on unproductive stuff! In fact, marketers estimate that they are wasting 26% of their budgets on futile activities.

In this situation, getting rid of unproductive activities and focusing on the ones that give you results seems to be the only way to get the competitive edge! 

But the question is – How do you find which activities are productive and which are not?

The answer is ‘Closed Loop Marketing’!

Closed loop marketing is a continuous cycle of research, performance analysis, and strategic improvement. It guides the marketing strategy formulation, implementation, and optimization with the help of data analytics. And this ultimately boosts your marketing ROI.

If you want to use closed loop marketing to make a data-driven marketing plan for your business, you are at the right place! This blog chiefly covers everything about closed loop marketing, its importance, and how to implement it. Let’s begin!

What is Closed Loop Marketing?

Closed loop marketing is a modern, data-driven marketing strategy. It involves gathering and analyzing information about customers and the impact of the marketing efforts on them. 

This approach basically involves in-depth analysis to determine how your marketing activities impact the final sales outcome. And the results help to optimize all the marketing activities to increase the marketing ROI.

Its working is quite straightforward- The sales and marketing teams cooperate to implement closed loop marketing and both teams work together to gather and interpret information about customers and their conversions. Next, they apply the inferences to create targeted content and improve the marketing campaign. Their common goal is to achieve high sales and marketing returns with the help of data analytics.

The metrics to consider include lead generation, landing page conversions, sales revenue, email conversions, net marketing ROI, and much more!

Why Do You Need It?

In the competitive business world, only the most well-informed and updated businesses can succeed. And the good news is that you can easily enter this league! You basically need an information-powered marketing system that analyzes the latest customer and performance statistics to optimize your marketing efforts.

This is where closed loop marketing can make all the difference! The closed-loop approach provides a systematic method to gather, analyze, and implement information and this helps to make regular strategic improvements. What’s more? You can automate closed loop marketing at low costs with the right tools.

But what’s wrong with traditional methods, you may ask?

Traditionally, businesses consider sales and marketing as two separate functions. Basically, the sales and marketing teams rarely interacted and it was not possible to trace the sales back to the marketing efforts that brought them.

The result? Nobody knows what’s working and what’s not! And this was sustainable in the past as no one had the power to record and interpret large volumes of data! However, the arrival of powerful and affordable data analysis software has brought in changes.

The old approach is no longer sustainable in the business world of cut-throat competition where there is calculation based on real-time data. And this is chiefly where closed loop marketing provides the perfect solution! Let’s look at the benefits of closed loop marketing to get a better understanding of its usefulness.

Benefits of Closed Loop Marketing

Closed loop marketing is becoming vital to the success of businesses due to the major competitive benefits it offers-

  • It helps you identify the best marketing approach. And this enables you to focus resources on the most successful techniques.
  • It reduces your cost per lead by raising the cost efficiency of the marketing process. And this means you have to spend less to acquire new leads than earlier.
  • It raises your conversion rate by optimizing your targeting process. This helps you reach the most relevant audience, thereby maximizing conversions. 
  • It helps to improve cooperation and make more accurate ROI predictions by integrating the marketing and sales team.
  • It helps you focus your resources on effective strategies. As a result, it eliminates wastage of funds and increases the returns on your marketing expenditure.
  • It shortens the sales cycle by streamlining your marketing efforts, so you can turn prospects into customers faster.
  • It helps you update your marketing techniques to match the varying tastes of prospective and existing customers. And this helps you provide a much better experience to them.

Let’s consider an example-

A company selling poetry books advertises on social media and gets many clicks and website visitors. And this is seemingly a success for the marketing team. 

However, the sales team’s metrics show low sales.

The closed-loop sales and marketing system provides feedback by combining the metrics of both teams. This shows that visitors lose interest after visiting the website.

As a result, the marketing team checks its website content. And it finds that the landing page and product pages do not have attractive images and clear product previews. 

They add or change the required images, and sales go up!

What Problem Does Closed Loop Marketing Solve?

What Problem Does Closed Loop Marketing Solve?

Your marketing team basically knows which online marketing efforts got people to visit the website and what the visitors were like. Meanwhile, your sales team determines the number of conversions (visitors becoming buyers) and the respective revenue generated.

But you must connect the two metrics to find the revenue achieved from each marketing effort.

And this is where closed loop marketing comes into play. It basically provides an integrated data analysis and interpretation system that solves these key issues- 

  • Problems identifying the marketing techniques and channels that are working best and the ones causing losses.
  • Lack of cooperation and communication between the marketing and sales team.
  • Wastage of time and money in the marketing process.
  • Problems with the analytical evaluation of existing strategies.
  • Confusion while implementing new strategies.
  • High cost per lead and low marketing returns on investment.
  • Prolonged and inefficient sales cycle causing high lead loss and slow sales.
  • An outdated marketing approach that causes poor targeting, low engagement, and unsatisfactory customer experience.

Let’s take an example to understand things better-

Email marketing managers of a company face the problem of low email open rates and cannot improve it despite constant efforts. 

The closed-loop analytics system soon analyzes the results obtained from all techniques. 

The analysis shows that social media posts are way more effective at getting website traffic and final conversions. 

Hence, email marketing managers shift the focus to social media marketing management. They invest further in social media marketing instead of email marketing. And you get better conversions at the same cost!

So far, we can say that closed loop marketing is the ideal solution for your marketing efficiency issues. It’s now time to cover the working, application, and implementation, so you can make the most of it!

How Does Closed Loop Marketing Work?

During closed loop marketing, the marketers create stage-wise data reports for all marketing activities. At the same time, the sales team works with the marketing team to combine the reports to the final conversions and sales. 

This exercise helps to generate suggestions for improving your marketing strategy by specifying the final revenue earned by each marketing effort. As a result, both teams implement these suggestions cooperatively.

This process creates a continuous or closed loop of feedback and improvement with the following typical stages-

Traffic generation

The marketing team plans and performs various activities to bring traffic to your site. These include diverse techniques, a few of which are the following-

  • PPC advertising
  • Content marketing
  • SEO optimization
  • Email campaigns
  • Social media marketing

On the whole, marketers often use software and services to optimize or automate these marketing strategies.

Visitors arrive at your website

Internet users click your ads, website links, or listings in the search engines to arrive at your website. This is basically directly related to the first step, which ensures maximum visitors or traffic to your website’s landing pages.

Visitors become leads

Some website visitors may provide their details through forms, thus showing their interest and becoming leads for your business.

Leads go to your CRM

The entered information goes to your CRM system’s database. After that, your sales team will now pursue these leads using their key data.

Leads become customers

Your sales team follows up with leads, and some of them may make purchases. The team records the purchases and relevant details in such cases and adds them to the sales.

Gathering and analysis of statistics

Your marketing team defines the first 3 steps, and the marketers record all statistics generated during them. Meanwhile, the sales team usually records the activities in steps 4 and 5. The next step involves combining and analyzing information collected by both teams to find the scope for improvement.

Implementation of improvements

You can now implement the insights obtained by the analysis to make optimizations. Some examples of the resulting improvements or corrections are the following-

  • Making marketing content more personalized based on updated customer behavior.
  • Changing the theme of content used in content marketing.
  • Increasing investment in ads on a particular ad network that performed well.
  • Minimizing investment in marketing techniques that are bringing low conversions.
  • Redesigning the landing page to make it more compelling given a low conversion rate.

Notably, this process also reflects the sales funnel stages of Brand awareness, Interest, Desire, and Action in vertical order. 

Here, your marketing team brings data from the top and middle of the funnel. And your sales team brings the data from the bottom of the funnel. 

You can connect all the data across the funnel to find which techniques led to the greatest conversions and final sales, also this step points out unproductive activities.

What Kinds Of Customers Can You Reach With Closed Loop Marketing?

Several organizations apply closed loop marketing to optimize their marketing, regardless of their offerings. And this is because the process applies perfectly to any product or service. 

The closed-loop is basically a versatile data collection, analysis, and optimization model that helps you tailor your marketing to impress every kind of customer!

So, you can apply to tactic efficiently reach all kinds of customers.

Things You Must Know Before Starting With Closed Loop Marketing

Closed loop marketing is a relatively modern concept. Overall, most organizations find it challenging to combine sales and marketing into a fully data-based marketing model. 

But you can avoid the common issues by taking these steps-

  • Keep your company’s marketing team, sales team, and especially leadership involved and you must ensure that all involved parties are on board while planning a closed-loop analytics system.
  • Foster a culture of using data for all marketing decisions. All employees must be ready to collect, share, and analyze data regularly before closing the loop.
  • Encourage collaboration between your sales and marketing teams through meetings and joint tasks. Moreover, this step is crucial as both teams must work together to judge the impact of marketing activities on final sales.
  • Set up the appropriate tools for automating and optimizing the loop. The right tools will basically help make your marketing loop more cost-efficient and quick. 
  • Verify that your basic sales process is running smoothly. Issues with the sales process will lead to unreliable results from closed-loop analytics.
  • Ensure that the required analytical tools and data collection systems are set up at the right positions in the lead generation, nurturing, and conversion phases.
  • Ensure that all prerequisites for your marketing campaign are complete. Overall, some key aspects to ensure are primary market research, audience analysis, value proposition, etc.

The 5 Steps of Closed Loop Marketing

Basically, the above tips will prepare your organization to adopt the closed-loop sales and marketing model. Next, it’s time to move on to its 5-step implementation process. The main steps involved in implementing closed loop marketing are the following- 

the-5-steps-of-closed-loop-marketing-salesblink

1. Attract and Identify your site users

Ensure that your website includes high-quality content and is SEO optimized. Then, you must go for content marketing and advertising to boost website traffic and for this purpose, you may use various marketing methods such as-

  • Blogs
  • Pre-roll ads
  • Social media marketing
  • Video marketing
  • Email marketing
  • Pay-per-click ads 

Moreover, you may automate or optimize the involved marketing techniques using marketing and sales outreach tools. Some popular tools for this purpose are SalesBlink, Mailchimp, Google Adsense, Hubspot, etc.

Next, you must identify and understand the website visitors by applying website analytics tools. Some tools for this purpose are Google Analytics, Moz, and Bitly. 

You must chiefly focus on finding and recording key insights about your visitors. Overall, this analysis will tell you your key sources of traffic, best marketing method, most popular pages, and best performing content.

2. Explore your visitors’ interests and behavior

Once you create a list of visitors and their key metrics, you must divide them into groups based on their interests and behavior on the site. This grouping will help you identify the leads you must pursue further.

Usually, some visitors will turn into your leads through their directive initiatives. These chiefly include filling out your website form, adding products to the cart, contacting you, subscribing to your newsletter, or matching any other criteria you set.

3. Create your customer database

Next, you must list the leads’ key details and store them in a CRM system database for future reference.

This data bank will allow you to personalize your customer services and marketing campaigns. And this, as a result, will generate trust, brand loyalty, and ultimately more sales. 

4. Record the sales and maintain customer relationships 

Next, you must record the purchases made by each lead along with their key details and update the sales amount. Also, use this record along with the database to maintain strong relationships with the existing customers. This will help to ensure their loyalty to your brand and keep track of the results. 

This step chiefly requires collaboration between marketing, sales, and customer support teams.

5. Continuously evaluate the results and make improvements

You must evaluate the results of your marketing campaign to find room for improvement. For this, you basically need to keep integrating and analyzing the sales and marketing departments’ records to trace every marketing effort’s effect on the final sales. 

This analysis provides critical suggestions for improving your future marketing and sales process. Hence, this is the crucial step that closes the loop of your marketing strategy. And you must implement it with the best marketing analytics software within your budget.

The Tools Required for Closed Loop Marketing

The major classes and types of tools that will help you maximize your loop’s speed, cost-efficiency, and conversion rates are the following-

  • Social media marketing tools
  • Content management systems
  • Search engine optimization tools
  • YouTube marketing tools
  • Ad campaign management tools
  • Lead management tools
  • Database management software
  • PPC Ad network platforms
  • Sales and customer service software
  • Customer Relationship Management tools
  • Database management software
  • Accounting software
  • Spreadsheet software
  • Social media management tools
  • Email automation tools
  • Messaging automation tools
  • Analytics tools
  • Website analytics tools
  • Marketing analytics software
  • SEO analytics tools
  • Social media analysis tools
  • Ad campaign metrics tools
  • Database management software
  • Website cookies
  • Web forms

Get Ready To Amplify Marketing Returns With The Closed-Loop Approach

As you saw, closed loop marketing integrates the marketing and sales functions seamlessly to raise your organizational productivity. 

It involves gathering, analyzing and interpreting the combined data to get key insights about the effectiveness of every marketing effort. Also this information allows you to boost your marketing efficiency, thus amplifying your marketing ROI.

In this manner, the closed loop marketing method acts as your trusted guide in the uncertain world of business. It basically gives you a significant competitive edge by helping you optimize your marketing strategy easily and affordably.

So, it’s time for you to apply closed loop marketing with the right closed-loop analytics tools to take your marketing campaign to the next level!

FAQs

1. What is the closed loop marketing process?

The closed-loop marketing process involves involves gathering and analyzing customer information and what the impact of marketing efforts on them is. It chiefly helps increase ROI.

2. What is closed loop attribution?

Closed loop attribution basically involves understanding how your business is growing by the investment you make in paid marketing channels. It gives a complete view of the result of your marketing expenditure.

3. How does closed loop marketing work?

Here’s basically how closed loop marketing works:
-Traffic generation
-Visitors arrive at the website
-Visitors become lead
-Leads go to CRM
-Leads become customers
-Gathering and analysis of statistics
-Implementation of improvements



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