Closed Loop Marketing: How it Works and Why You Need It

Closed loop marketing (CLM) is essential in growing revenue, but do you know why? The secret lies in a better relationship between sales and marketing teams.

Better cooperation and more efficient use of budgeting skills could be on the horizon with a CLM campaign. Read on to learn how!

Closed Loop Marketing

Have you ever visited a website that asked how you found them? That "who referred you" question is the basis of closed-loop marketing. Companies use that question to check up on their strongest (or weakest) marketing techniques.

They use the data gathered to make budget choices, create or change marketing products, or shape their website. It can also be used to increase cooperation and communication between sales and marketing teams.

Closed loop campaigns are a fancy term for closing the gaps in client information and retention. They take some work to set up but are fairly simple to run after that.

How Do Closed Loop Marketing Campaigns Work?

Every business is different and so are their CLM campaigns. Though differently structured, each has these four elements.

Step 1: Tracking Arrivals

As already discussed, closed-loop marketing campaigns need a tracking option. This can happen in one of two ways. Either the company asks the client to disclose their referral method, or it's tracked by cookies.

Cookies are small pieces of information sent from a computer to your company. They can track things like how long people stay on each page and, in this case, what brought them there.

The method you choose depends on how well you know your customers. Are they willing to share information with you? For example, a company that offers confidential services might avoid using cookies.

Instead, they could ensure the customer their data is confidential, before offering a referral form.

Step 2: Tracking Client Paths

Once you've identified where the clients are coming from, it's time to learn why they're staying. If you're trying to promote a specific product, do they exit after they view it? If so, you could offer related items on the product page.

Technology is so advanced, that you can track their clicks and their clicking order. The only thing that can track all this is cookies. Some sites are gaining their client's trust by announcing their cookie use.

This way, clients know what information is being tracked and why. This helps build trust with the brand and eventually creates loyal customers.

Step 3: Data Usage

Once you have the data from your website visitors, you need to decide what to do with it. We gave small examples above, but are going into more depth here.

Cater to Customers' Wants

Now that you know your clients' priorities (from click order and referral source) you can cater to them.

If the ad that brought their visit to your website was an informational post, use that technique more often.

Think about your prices. People love sales, but if you only get traffic when you advertise them, your prices may be too high. Think about reducing your prices to increase year-round site clicks.

Make Budget Choices

Like we discussed earlier, closed-loop marketing campaigns are great for budget efficiency. They let you know where your resources are being well-spent, over-spent, or needed.

The company can then increase or decrease spending to maximize their budget's impact.

For example, pretend Company A has a high social media referral, but low Google referral. After finding this out, they may shift their focus on Google Advertising while continually assessing the progress or lack thereof.

If they cater to a niche market, closed-loop marketing shows what that population prefers.

Unfortunately, you're limited by the customer's willingness to give. Sites that ask for too much information from new clients are less likely to get completed forms.

Step 4: Increase Client Engagement

If you know where your customers are spending their time on your website, you know where to add opportunities for engagement.

Live-chat bots are a popular online engagement technique right now. You can have them pop up on a certain page or set them to a specific amount of browsing time.

However, there's an important line between engaging and annoying your customers. Successful live-chat bots do not make the reader stop and exit the pop-up. They wait patiently in the corner and don't overwhelm the reader with notifications.

Recommended products or "products you've viewed" widgets are another way to use the customer data. Customers will appreciate that you track what they're interested in and it makes their shopping easier.

Why Should You Care about Closed Loop Systems?

If reading through what closed loop campaigns can do hasn't yet sold you on their worth, here are some more specific reasons why you should consider employing these campaigns.

1. You sell products online

CLM can help you sell more products. Once you have data on your consumers via their cookies or form answers, you can use it. The information provided to you can help you shape marketing ads, sales techniques, or even your future product lines.

In the marketing or sales world, there is no such thing as too much client information. The more you know about your current customers, the better you can target future ones.

2. You Manage a Sales or Marketing Team

Closed loops are a great tool for bringing sales and marketing teams onto the same page. With the precious data it provides, both teams can look at their impact on an individual sale.

Once you have enough data to locate trends, teams can work together to streamline the buyers' experience.

Be Courteous

Customers are bombarded by and asked for information every day. Your marketing campaign should have an obvious way for them to opt-out. Don't make your "how did you find us" forms mandatory.

They'll appreciate that you value their time and that you care enough to give them a choice.

Now that you're in the loop on closed loops, which benefit would bring the most value to your company? Let us know in the comments!