I'm going to take a guess.
You’ve landed on this article about closed-loop marketing because your boss, client or board has asked you how many real sales you’ve generated, and not how many goals or conversions?
You’ve spent time scouring the internet to learn how to connect revenue back to your marketing activities.
If so, you’ve probably come across this infamous quote by John Wanamaker at some point:
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
It’s been a century since John Wanamaker proclaimed these words and they’ve never been more relatable.
It was reported that a record number of CMOs lost their jobs as they were unable to show business impact and justify their marketing budgets.
Despite having access to the tools that can potentially close the loop between leads and revenue, businesses are still measuring the success of their marketing based on the number of goals in Google Analytics.
As a result, they have a gap in their insight that’s not only stopping them from improving results, but is leading them down a rabbit hole when it comes to measuring the ROI of their marketing.
I've actually seen this happen first-hand.
Before joining Ruler Analytics, I worked at an events company.
I ran paid campaigns through Facebook and Instagram. As well as this, we also had a strong organic social presence and a successful blog.
We were generating ticket sales, although I couldn’t tell my manager exactly how.
As a budding Digital Marketer, I was taught to use the industry standard of Google Analytics.
Here I could see goal conversions, but this didn’t help me prioritize ad spend to optimize successful channels. I could not truly measure the impact of my marketing effort on ticket sales which, in the end, was very frustrating.
I had not been in the industry long when I had already faced a struggle that was all too common in the digital marketing world.
Since starting here I have heard my peer’s stories which are very similar to mine, but seeing this tool as the solution, the problem suddenly seems much less daunting.
For those of you that don’t know Ruler Analytics, it’s a visitor level multi-touch marketing attribution tool that helps bridge the gap between marketing generated leads and closed-revenue.
Anyway, let’s dive into closed-loop marketing and find out how you can finally prove marketing’s value and the amount of revenue it generates.
So, what is closed-loop marketing?
Closed-loop marketing is an approach to marketing measurement, which allows you to focus on what actually matters to your business: revenue.
The old way of marketing measurement relies solely on tracking goals and conversions, which, in reality, does not offer a reliable measurement process.
Different traffic sources, keywords and ads will produce different revenue per lead, however, Google Analytics will simply class it as a ‘goal’. External analytics tools will take this into account and value them respectively.
Google Analytics does a great job of tracking for ecommerce businesses where a goal can clearly equal a purchase, however, for more complex B2B lead generation businesses, the industry standard is outdated and doesn’t offer accurate data.
Closed-loop marketing provides a more detailed and in depth picture of your marketing spend and return on investment as a whole. Tools such as Ruler Analytics, based on the closed-loop framework, which tracks all visitor engagement, will solve this issue with the insight available.
The steps to closed loop marketing
To show you how Closed Loop Marketing works, we’re going to break the process down into four steps:
1. Visitor arrives on the website and a cookie is set
This is the beginning of the closed-loop journey; the lead will progress through the sales and marketing funnels and the cookie will track all of their activity. The cookie collecting this data will allow you to attribute the visit back to the correct channel that generated it. To successfully close the loop, make your website a hub for all of your marketing activities. Lead all links from organic search, social media, email marketing referral links, paid search and even offline campaigns back to your website. This way you can place a cookie on each visitor and track all of their marketing activity. Accurately track this activity with UTM’s placed on each link so you can see the source in your reports.
2. Visitor returns and their actions are tracked with cookies
As traffic starts filtering into your site, you can identify where it is coming from and monitor their behavior. You can build ideal customer journeys based on the data you are collecting to optimize a visitor-to-lead conversion later down the road. This can be the most complex part of the closed-loop marketing method as you need to connect the visitor session data to their lead information once they convert via form, phone call or offline. Without doing this, you are left with two sets of data - anonymous visitor data and lead information - that don’t connect leads back to their source.
Tools like Ruler Analytics help automate this process. Ruler’s closed loop framework is an approach to marketing measurement that instead of relying on existing metrics available in reporting tools such as Goals and Conversions, focuses on what matters to the business: revenue.
3. Visitor converts into lead via lead capture form fill, phone call or live chat
Now, all incoming traffic needs to be encouraged to convert on your website in order to become a lead. You can make this more appealing for website visitors by leading them to informative landing pages that offer more opportunities for them to convert, for example, asking the user to enter their name and email address to download an online brochure that will introduce them to your business. It’s best practice to direct website visitors to a landing page containing a lead-capture form which will grow your database of lead information and can feed into your CRM system.
4. Visitor = Lead and source is credited
Visitors have now converted to leads who will then, hopefully, convert into actual customers. Now, it’s time for you to use the closed-loop marketing method to understand and identify which marketing channels contributed the most leads and fine-tune the process to bring in even more. By using external reporting tools such as Ruler, or streamlining this process with internal methods, you will clearly be able to see which journey converted visitors took and optimize for success.
The benefits of closed-loop marketing
By adopting the closed-loop marketing method, there are four main benefits:
1. Achieve a cohesive and effective connection between your sales team and your marketing department
With the closed-loop framework in place, both your sales and marketing team are working towards the same goal, which opens a clear channel of communication and a mutual understanding. Both teams are working to generate more leads and further nurture them into clients. As opposed to having separate sales and marketing funnels, the two are connected and prospects pass through the marketing funnel, become a lead then enter the sales funnels and convert into a customer.
2. More effective lead management
The closed-loop framework allows you to effectively manage new leads. With the closed-loop framework in place, all of the necessary data that is needed to qualify a lead is readily available, meaning you can make the right lead decisions for your business.
3. Focus your marketing budget on what works
The closed-loop framework gives you a clear, granular view of your marketing data, this allows you to look deeper into what is actually driving revenue. Once you are able to analyze your marketing efforts for success and optimize for revenue, your business will see a dramatic impact and a rise in return on investment.
4. Show your impact
Remember at the beginning when we mentioned the age old struggle of showing the impact the marketing team has on the bottom line? Well, closed-loop marketing will not only help with that but you can also show how your individual work resulted in leads being generated without the sales team stealing the credit. If you created a successful Facebook ad that got users engaging, going through the closed-loop process and coming out the other end a customer, you can definitively prove their journey started because of your ad.
So, closed-loop marketing: is it the right approach or just another time-consuming report to build?
Is it the metric that will boost CEOs’ opinions of the discipline? If you’re a lover of CLM, like me, and have achieved positive results from this process then I’d love to hear about it in the comments below. CLM is a valuable method of reporting, and it’s time we make more marketers aware of it.