What is Closed-Loop Marketing: Strategy, Tools, Examples

Top companies use closed-loop marketing to generate more leads, conversions, and sales with limited resources. This relatively new business methodology has emerged thanks to modern data processing and analysis technologies. Let’s discuss it in more detail.

What is Closed-Loop Marketing

By definition, closed-loop marketing is a business promotion strategy that involves a continuous information exchange between a marketing team and a sales department. It may seem that this is the way any company works. But, in fact, in a traditional business model, the exchange of information between individual departments is sporadic and often limited to general indicators published in regular reports.

Closed-loop marketing means that both teams work together for a common result, creating an inextricable loop of tasks and responsibilities - hence the name. 

Marketers attract the attention of an interested audience and generate leads. They collect detailed information about a potential client:

• where a client came from;
• what products a client was interested in;
• What was a client’s behavior on the site;
• what communication channels they chose;
• how much money was spent on customer acquisition, etc.

With this data, the sales team can create the most effective tactics that will lead to conversion. At the same time, its employees also collect valuable information:

• which methods were effective;
• what products were included in the final check;
• what questions the client asked;
• how consumers assess the product;
• what else customers lack.

This set of data is returned to the marketing team, which can use it to create new advertising campaigns, refine target audience segmentation, and select top priorities of business activities.

Benefits of Closed-Loop Marketing

Well-established communications between marketers and salespeople bring many benefits to businesses. Let's talk about the main ones.

Improved financial results

Closed-loop marketing solutions allow all participants in the process to choose the most effective methods of work. Marketers clearly understand which segment of the target audience they should work with and what results they can expect, allowing them to plan their advertising campaigns properly. Salespeople make decisions based on data rather than intuition, turning more leads into customers. As a result, efficiency increases on both sides - marketing costs are reduced, and overall company revenues increase.

Better communication with customers

Through closed-loop marketing, the sales team gets to know consumers. Employees already know a user's demographic, socioeconomic, and behavioral characteristics when they receive a lead. They understand customers’ needs, requirements, and preferences. The information collected along the customer journey is returned to marketers, who can fill in the gaps in their understanding of the target audience. Forecasts, assumptions, and guesses are replaced with accurate data.

Increased loyalty

The information received from salespeople can be used to personalize advertising messages. According to Salesforce, 84% of consumers expect this from businesses and expect to be treated as individuals, not numbers in spreadsheets. And marketers' data allows them to clearly outline the problems and needs of potential customers in dialogues, shortening the conversion path. All this makes interacting with a brand more comfortable, improving attitudes toward the company and increasing the likelihood of repeated business.

Precise analytics

A significant advantage of closed-loop marketing benefits is the ability to analyze return on investment (ROI) in detail. Communication between departments makes it possible to understand how effective each campaign and each advertising activity was. Thanks to this, marketers can get better results from experiments and A/B analysis, spending less time searching for the best methods of promoting their business online.

Examples of Closed-Loop Marketing

There are many closed-loop marketing and advertising strategies. Let's look at the main ones and their benefits to businesses.

Identify the best communication channels

1. Marketers launch a multi-channel advertising campaign. 

2. Visitors enter the website from search engines, social networks, and partner sites. 

3. The sales team receives data from CRM, which allows them to build the most efficient conversion scheme. 

4. After a transaction is completed, it is possible to calculate the acquisition cost for each customer, the income resulting from cooperation with them and the profitability level.

5. Analysts conclude that advertising in partner networks is the most effective. Meanwhile, people who enter the website from social networks are generally unaware of the company's products. 

6. In subsequent advertising campaigns for partner networks, the emphasis should be on the unique sales advantages of the business, while social media campaigns should focus on brand awareness and PR.

With Claspo, you can show your widgets to visitors who navigate to your website from a specific channel (traffic source). That is, those who came from Facebook and those who came from Google may see different widgets.

What is the advantage? First, it helps you personalize your appeal and offer. The simplest example is a social media audience may see a widget that says: "Only for the Facebook community: Promo code for first purchase." Second, you can track the conversions of each widget and, based on this data, understand which audience from which channel responded best to your offer (if it is the same for all). Another critical point is that Claspo easily integrates with most CDPs and CRMs, so all essential data is quickly in the hands of your sales team.

Accurate forecast of the results of marketing activities

1. The marketing department launches a broad targeted advertising campaign aimed at different segments of the target audience. 
2. During the first stage, they determine each group's CTR. 
3. After visits to the site, you can draw conclusions about the bounce rate, engagement, and depth of study. 
4. Requests provide information on the cost of leads, and sales provide information on conversion rates and profitability. 
5. After the end of the closed-loop marketing campaign, analytics allows you to draw conclusions about the effectiveness of accessing each segment.
6. Subsequent campaigns will be more narrowly targeted, with an individual approach to each segment. 
7. With the aforementioned data, marketers will be able to forecast results, grounding the need to allocate certain budgets.

Once your advertising campaign brings visitors to your website, Claspo helps you convert as many of them as possible into leads and customers. Set up your widget to be displayed to those users who came from a specific ad campaign (social media targeting, contextual advertising, etc.). It can remind visitors about the key points of your ad (Looking for the best winter shoes?), describe your offer, and redirect them to the correct pages (for example, with your bestsellers or discounted products).

As a result, site visitors find what they came for from your advertising campaign faster, simplifying and shortening their purchase path. Besides, this decision can help to avoid a bounce rate growth, often caused when the site's content does not meet visitors' expectations. With the help of a widget highlighting the ad's main points, visitors immediately understand that they have come to the right place and can get what they need.

Reduce time and money spent on lead conversion

1. The marketing department launches an advertising campaign to increase awareness of the brand and its products. 
2. On the website, visitors take a short survey to identify their pain points. 
3. The sales department collects more detailed information and assesses the attitude towards the company. 
4. The data obtained in this closed-loop marketing example is used to build individual customer journeys and sales funnels for each segment.
5. With each subsequent iteration, efficiency is improved through high-quality analytics and data-driven decisions.

Run short surveys on your website with Claspo widgets. In our library, you can find ready-made templates for this purpose and easily customize them to your needs in an intuitive editor.

The responses of all respondents collected through our widgets can be sent directly to your ESP, CRM, or CDP to segment the audience further and build personalized communications based on their responses.

This is an excellent example of closed-loop marketing: the marketing team collects data through widgets, and this data is passed on to the sales team, who contact potential customers and tell them how your brand can heal their pain points (identified through website surveys). As a result, the time and cost to convert leads are greatly reduced.

Tools Needed for Closed-Loop Marketing

Although the idea of continuous data exchange between different divisions of a company has always existed, only recently it has been put into practice. This became possible thanks to the emergence of closed-loop marketing software. Let's talk about its main components.

1. CRM

The customer relationship management system is a central part of the software package. It collects, accumulates, and allows you to use detailed information about each customer who interacts with the company in one way or another. It helps you segment your target audience, choose the best sales tactics, run effective promotions with discounts and non-price bonuses, and retain customers who want to stop using the company's services.

2. Programs for launching advertising campaigns

These can be contextual advertising platforms, email marketing services, hyper-personalization applications, and other closed-loop marketing tools. A great example is Claspo. By choosing us, you can create widgets for various marketing purposes (including advertising and promotion) without programming skills and understanding design principles. Because Claspo integrates with various ESPs, CRMs, and CDPs, our widgets can fit efficiently into your omnichannel strategy. With built-in analytics and Claspo's ability to send data to Google Analytics, your marketing team and sales department can gain valuable insights into both campaign performance and your audience.

3. Data processing systems

Analytics is the key to success in closed-loop marketing. To make data-driven decisions, you need to automate the process of collecting information, searching for patterns and regularities, and drawing conclusions. One of the best solutions in this area is the tandem of Google Analytics 4 and BigQuery.

How Does Closed-Loop Marketing Work: 4 steps

The general scheme is quite simple: marketers and salespeople exchange information, mutually supporting efforts to expand the customer base and increase revenue. But to understand how a closed-loop marketing system works, you need to see it in detail, identifying each stage.

1. Attracting and identifying users

The first step is to create a website and fill its pages with high-quality content. It is crucial to ensure that your marketing strategy is effective by conducting an independent audit and testing to adjust certain decisions. 

When attracting visitors through SEO, PPC, affiliate programs, newsletters, social media posts, and other ways, you need to collect detailed information about them. A universal solution in this field is the free Google Analytics 4 service, which supports both browser cookies and server-side tags. You can also use more expensive and effective applications like Moz, Serpstat, Ahrefs, or SE Ranking.

2. Segmentation

The next stage of the closed-loop marketing process steps is to study the key characteristics of potential customers. These parameters are used to segment the target audience. They can be divided into groups based on socioeconomic, demographic, or even psycho-emotional factors.

The main purpose of segmentation is to predict the behavior of website visitors. When a new customer visits your website, you can compare their characteristics with the standards in the database, select the appropriate group, and model further interaction. This is a prerequisite for personalizing the customer journey.

3. Analysis

Analysis is the most important part of a closed-loop marketing strategy. Working in highly competitive markets, you can never dwell on what you have achieved. You need to constantly optimize methods to improve your position and adapt to new conditions. 

Analytics should be continuous. Every user interaction with the business should be recorded automatically and added to the database. This will be enough to improve the accuracy of forecasting in static models. 

But the perfect solution in today's environment will be the use of artificial intelligence and Big Data technologies. They can find new patterns and constantly adjust mathematical models. Thanks to this, businesses manage not only to move with the flow but also to stay ahead of customers.

4. Adapting marketing campaigns

Collecting, processing, and analyzing data has a very simple goal: making the right management decisions. Taking into account the findings of analytics systems, you can narrow the target audience of advertising campaigns, create more effective appeals, and calculate balanced discount percentages. 

With Claspo, you can not only analyze your widgets' performance but also conduct A/B testing to identify the campaigns that resonate best with your audience and adjust your strategy based on this data. All these measures are aimed at increasing revenue and improving profitability.

By launching new campaigns based on the results of previous activity analysis, the business closes the loop. The next iteration begins, offering new input data. Usually, it confirms the hypotheses formed earlier and refines the information, although sometimes companies have to be prepared to face unforeseen events.