Closed-loop reporting is an effective method where marketers can have insights into their marketing efforts whether those are influential to revenue or not. It is always good to have a comprehensive dashboard for a marketer to monitor the health of his/her marketing initiatives.
The closed-loop reporting is an integral part of marketing as it has a direct impact on the revenue. As per the Content Marketing Institute, only 21% of B2B marketers have received a good result by tracking their ROI. The closed-loop reporting is an effective weapon to resolve this challenge.
What is closed-loop reporting?
Closed-loop reporting or “closing the loop” simply refers to the to and fro flow of information between marketing and sales teams. The marketing team passes MQLs to its sales team and the sales team come back with information about those leads (in order to gain better insights) – thus closing the loop/
This helps to know where the leads are coming from, what is their status, etc. This is a marketing automation system that automates customer data integration, customer segmentation and campaign management.
The closed-loop approach is a challenge to traditional methods of measuring the paid marketing effectiveness. The traditional way of measuring the marketing efforts provides minimum result whereas closed-loop reporting provides multiple insights with real-time reports to decide if the current marketing effort is working or not.
How does closed-loop reporting work?
The closed-loop reporting consists of three major components such as:
- Ad Campaigns
- Conversion Data
- Return on Investment (ROI)
When you run paid marketing campaigns, the closed-loop reporting starts from there. For example, you are running a campaign on Facebook, Google Ads, LinkedIn or any other network. The first feature of the closed-loop approach is to consolidate all the cross-network data and place it in one place.
The conversion data can be collected from different places like CRM, different marketing tools, social media, etc. A marketer needs proper conversion data and the source of data to determine if the current paid marketing is working or not. The closed-loop approach collects all the data and presents it in one place to the marketers. The derived data is exclusively for conversion not for clicks.
Return on Investment (ROI)
The report on an ad campaign and the conversion data and the link between these two factors close the loop by displaying the effectiveness of the ad campaign. These two components are interdependent for the return on investment (ROI). Also, this report enables you to make decisions to run or pause paid marketing campaigns.
How to Implement Closed-loop Reporting?
As the closed-loop reporting has become an important part of every business, it is essential to implement in all business model. Especially, if your business is depended upon the marketing and lead generation, then implementing the closed-loop reporting is definite. Here are a few steps to implement it.
- First-touch attribution model
- Analyze the report for Successful plan
- Know your audience
- Set your goals
- Make a wise decision on your marketing budget
First-touch attribution model
The first-touch attribution model is a term every marketer should understand and implement in their business. Through this model, a marketer can know the source of the lead generation and the initial source should be focused on and monitored. Again only lead generation doesn’t matter, s/he should observe the source of quality lead and emphasize the same channel accordingly.
Analyze the report for Successful plan
As a marketer, you should observe the report closely and plan accordingly. For example, your report says the direct traffic has more prospects and they are in the sales funnel for the next move. The next channels are referrals and email marketing. As a marketer, you should focus on the channel that has less traction to improve. You can continue the highest traffic gained channel but should focus on the channel that has less traction and plan accordingly.
Know your audience
Understanding your audience is a key point of every business. With the closed-loop reporting, you will have a plethora of opportunities to understand your audience. Instead of looking at the buyer persona or doing account-based research, you can take the help of this report to know the prospects’ history.
Through the closed-loop report, you can get all the information about a lead by his/her behavior like what kind of content s/he is going through or what type of white paper s/he is downloading. His/her every activity will let you know his/her pain point and the urgency of getting a solution. Knowing your audience is the major step to target them. In one report you will find multiple factors to determine your target audience.
Set your goals
Every business should have a goal but the goal should be real-time. The closed-loop report provides the source to determine the real-time goal. The data regarding the conversion rate of visitors to leads, the prospects to the customers and leads to the customers provides the clear idea of maximum conversions. Based on this report you can set your goal.
Make a wise decision on your marketing budget
The closed-loop report helps marketers to spend wisely on marketing. The insight of all the marketing efforts provides efficient and inefficient channels of getting potential customers. Based on this report you can set your goal and spend the amount in marketing or paid campaign to achieve the goal.
For example, a start-up has a limited budget for marketing. If it spends on marketing randomly without knowing the probable result, it is a waste of money. But the closed-loop report helps to spend on marketing wisely by choosing the prominent channel that produces more potential leads.
Benefits of closed-loop reporting
Days are gone when marketers experiment a lot and fail again and again. In that case, there is multiple explanations marketers craft to present in front of the investors. But when this closed-loop reporting has been introduced in the market, no more marketers have to craft explanations. They have real-time reports in their hand to show the investors.
There are several benefits of adopting closed-loop reporting in your business:
- Know best-performing networks and campaigns.
- Track customer journey metrics from the initial touch to the purchase.
- Allocate marketing budget in the most effective way.
- Uncover trends and data to set better goals.
- Maximize the return on investment and justify ad spend to senior management and clients.
As mentioned above, it helps you find the best channel or network to get the potential leads. You will get the data ranging from gained traffic to conversion rate along with the individual leads’ activity.
The behavior data of each lead will help you to track his/her entire journey starting from the first touch to the purchase stage. Based on the moves of the prospects down to the sales funnel, you can determine the percentage of the conversion. Once you have a conversion rate idea, you can allocate the marketing budget to the same channel or network.
Apart from these, this report provides a better idea of trends in the market and based on the trends, you can set your goal. Of course, knowing the trends is not the only factor to set your goal. There are several factors and every factor can be drawn from the report.
Last but not least, the closed-loop report provides in and out data of all necessary needs. Once you have all the information, you have a strong weapon to defend. By showing the valid and real-time data, you can ask for more budget to invest.
Based on ROI and the expected results from the investors, your goal should be aligned. The closed-loop report helps by providing each insight to achieve your goal.
The closed-loop report commences allocating all the necessary and cross-network data into one place. The role of a marketer starts from there. A marketer observes each and every data closely to determine the potential customer, the conversion rate of last year from the channel, predict the next year’s conversion.
The closed-loop reporting provides a marketer with the ability to visualize, analyze, report and optimize the performance. It is not only important but an essential part of a business to set the goal, increase the investment, allocate the budget for the marketing, etc.
These days, the closed-loop reporting is trending and it has multiple benefits than the traditional way of measuring the metrics. The best part is the forecasting system based on this data is accurate compared to other ways to forecast the sales. Paid marketing has become easy and the marketers are confident to spend money as this report has guarantee conversions.