[Intermediate – 106] What is Closed Loop Marketing and How Does it Work?

When it comes to marketing, everyone is on the hunt for the most effective strategies. One that many businesses and marketers are turning to is closed-loop marketing. Often referred to a CLM, it has proven to help better connect with consumers, build brand reputation, and drive sales.

What is closed loop marketing?

While marketing efforts of old rely on throwing information at the consumer and hoping it sticks, CLM is dependent upon customer data. In other words, closed-loop marketing seeks to understand the customer, and then uses that information to better market to them. In this way, customer behavior, sales, and marketing all interact together in a closed “loop.”

How does closed loop marketing work?

The closed loop marketing cycle looks something like this:

Closed loop marketing starts with the sales team. They analyze customer behavior and trends. Data gathered is focused on what drives customers’ purchasing decisions. After data is gathered, it’s then shared with the marketing team.

The marketing team uses the data to mold and create new marketing strategies based on consumer trends. For example, if a post about a company’s history on Facebook resulted in inspiring 20 percent of consumers who viewed the post to make a purchase on their eCommerce platform, then the marketing team will decide to publish similar content.

Planned marketing strategies are based solely on customer behavior and other relevant and valuable market trends.

After, they will assess the implementation, gather feedback, and analyze data about whether or not the marketing tactics were effective. If new data suggests that a marketing tactic wasn’t effective, the data can be used to make adjustments or modifications to the strategy.

Tools Needed to Implement a CLM Strategy

Because a CLM strategy is contingent on gathering accurate data, using tools and software when implementing a closed loop marketing strategy is important.

Tools and software that a business or marketer should consider investing in include:

Customer Relationship Management Software

Customer relationship management software can be key for a business attempting to introduce a CLM approach. Customer relationship management software can be used to oversee and store customer data, gain access to business information, provide customer support, sales force automation, and more.

Some highly recommended customer relationship management software options include SSalesforce, InfusionSoft, NetSuite CRM+, and Hatchbuck.

Marketing Management Software

In addition to managing data about your customers, you also need software to help put your marketing strategies in action. Tools that will help you achieve your goals by managing leads, handling social media marketing, providing analytics, helping with customer acquisition, email marketing, implementing user engagement strategies, and maximizing SEO (search engine optimization) and PPC (pay per click) effectiveness.

Marketo, HubSpot, and Vocus are three of the most frequently turned to marketing management software options.

Data Management Tools

Many customer relationship management software companies and marketing management software companies will provide you the raw data that you’re looking for to fine tune your marketing efforts. However, if data alone is what you need, some of the best analytics software systems out there include:

Google Analytics: The first great thing about Google Analytics is that it’s completely free. It’s currently used by more than 50 percent of the top 10,000 websites in the world. Google Analytics provides data about the visitors to your website and provides great data sheets to help you understand the statistics.

Crazy Egg: Crazy Egg is used by companies to build heat maps. A heat map generates data about your consumers (visitors to your site), tracking things like how customers scroll through a page, how they move their mouse, and what things they click on. Crazy Egg provides a free 30 day trial to new customers and a basic plan of $9 a month. All plans come with the following reports: heat maps, scroll maps, overlay maps, lists, and confetti.

Learn more about how to use a heat mapping to increase your content performance

The Benefits of Closed Loop Marketing

If you’re still relying on antiquated marketing efforts, making the switch to closed loop marketing can help to increase the number of conversions, build stronger relationships with your customers, and achieve a cohesive and effective connection between your sales team and your marketing department.

In one case study published by working planet, the implementation of a CLM strategy increased their client’s conversion rate by 36 percent, and decreased ad spend as a percentage of revenue by 34 percent.

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