Closed-Loop Marketing: Demonstrating the ROI of Content & Optimizing Marketing Initiatives
Inbound marketing refers to a series of marketing activities designed to draw in visitors. In contrast, outbound marketing (which includes traditional forms of advertising) requires marketers to reach out and capture the attention of prospects. With more and more consumers relying on high-quality content—such as blog posts, videos, podcasts, eBooks, and whitepapers—to inform their purchase decisions, inbound marketing is rapidly gaining traction among marketers.
While various forms of content marketing are used to attract leads and prospects, many B2B (business-to-business) and B2C (business-to-consumer) marketers are experiencing difficulty tracking the ROI of their content marketing programs.
In fact, according to the latest annual report by the Content Marketing Institute (@CMIContent) and MarketingProfs (@MarketingProfs), entitled B2B Content Marketing 2015: Benchmarks, Budgets, and Trends—North America, only 21% of B2B marketers say they are successful at tracking the ROI of their organizations’ content marketing programs.
B2C marketers fair no better; according to the Content Marketing Institute’s and MarketingProfs’ latest report, entitled B2C Content Marketing 2015: Benchmarks, Budgets, and Trends—North America, only 23% of B2C marketers say they are successful at tracking the ROI of their organizations’ content marketing programs. In fact, a plurality of B2B and B2C marketers want more information about achieving, measuring, tracking, and demonstrating the ROI of their content marketing programs and other marketing initiatives.
Marketers Possess the Technology to “Close the Loop” Between Marketing and Revenue
Closed-loop marketing is a form of marketing that relies on data and insights from closed-loop reporting. Following this model, the marketing and sales departments work closely together to collect, analyze, leverage, and share the right information with each other. Closed-loop marketing is designed to identify, attract, and convert the best leads into customers.
‘“Closing the loop” just means that sales teams report to Marketing about what happened to the leads that they received, which helps Marketing [understand] their best and worst lead sources,’ states Pamela Vaughan (@pamelump) of HubSpot (@HubSpot).
Effective inbound marketing requires marketers to tie every single lead, customer, and dollar amount back to the marketing initiatives that triggered them. In other words, closed-loop marketing helps marketers measure, track, and demonstrate the ROI derived from their marketing initiatives.
The Four Stages of Closed-Loop Marketing
There are four stages to the closed-loop marketing cycle. [See Figure 1]
In the first stage, the visitor arrives on the site and a cookie is set on the visitor’s referral source. In the second stage, the visitor browses the site, and the cookie tracks the visitor’s actions. In the third stage, the visitor converts into a lead by completing and submitting a lead capture form. In the fourth stage, the lead becomes a customer and the original referral source is attributed.
Let’s examine all four stages of the closed-loop marketing cycle in detail.
Stage 1: Visitor Arrives on the Site
The website is the entry point of the closed-loop system, with the cookie set on the site visitor and his/her referral source (such as email marketing campaigns, social media marketing campaigns, search terms that led them to the site, etc.). As the lead progresses through the sales and marketing stages, the cookie enables the marketer to attribute the lead back to the proper channel (i.e. their original referral source).
Tracking referral sources requires marketers to invest in the proper marketing analytics software. Examining this data not only enables marketers to identify trends and compare channels, but also helps them identify and optimize valuable sources of traffic, and correct underperforming channels.
“The easiest way to close the loop is to make your website the central hub for all your marketing activities. Organic search, social media marketing, email marketing, referral links, paid search, and even offline campaigns should get filtered to your website. Once someone visits your website, you’ll be able to put a cookie on them and start tracking their activity,” states Vaughan.
Stage 2: Visitor Browses the Site
Aside from tracking and identifying sources of traffic, marketers need to track the behavior of their visitors. By examining visitors’ page views and the trajectory of their actions, marketers can use this gathered data to optimize for faster visitor-to-lead, or even visitor-to-customer, conversions.
To maintain a closed-loop system, marketers need to connect visitors’ sessions with their lead information once they convert on a form. Without this connection, marketers are left with two separate databases—one that contains anonymous visitor history and another that contains lead information. Maintaining closed-loop reporting requires the right marketing analytics platform which not only tracks visitors’ activities, but also provides some actionable next steps.
Stage 3: Visitor Converts into a Lead
In order to monetize acquired traffic and send qualified leads to the sales department, marketers need to convert visitors into leads. This could be done by sending incoming traffic to landing pages, where information exchange is possible.
“More than just knowing where your visitors are coming from, you’ll also need to know who they are,” states Vaughan. Obtaining contact information helps close the loop, and helps marketing and sales better associate closed customers with their referral sources. The landing page should contain a submission form with requests for contact information that the visitor is required to fill out: name, email address, contact number, etc.
“As a best practice, you should be sending most of your traffic to landing pages and forms so you can grow your leads database,” states Vaughan. Check out this article for more information on how to build effective landing pages.
Stage 4: Lead Becomes a Customer
Closed-loop marketing is designed to help marketers identify the activities and marketing channels that brought in the most and least sales. Closed-loop marketing also helps marketers optimize underperforming activities and marketing channels.
To help marketers in this process, they need to examine all the leads the sales department has closed and attribute them back to the original marketing initiative. If all four stages in the closed-loop process are well-established, attribution should be a straightforward process. Most medium-sized businesses can achieve this goal through the use of their customer relationship management (CRM) system, while smaller businesses can achieve this goal with a simple spreadsheet.
Conclusion: Closed-Loop Marketing Boosts Conversions
In order to map out their marketing activities to sales, marketers need to connect their marketing software to their CRM software. In order to get the two systems to communicate, you need to set up an application programming interface (API). When a sales representative closes a deal, he/she can mark the sale as “won” in the CRM software, which then triggers an update in the marketing software.
This enables the marketer to trace backwards and identify the new customer’s path to purchase. What channel brought the new customer to the site? What subsequent pages did the customer view? At which point did the person convert into a lead, then a customer?
Aside from boosting conversions and helping marketers identify conversion assists (which are web pages that visitors view before converting into leads and customers), closed-loop marketing also makes it easier for marketers to establish the ROI of their marketing activities, and helps align sales’ and marketing’s workflow processes.
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