Closed Loop Marketing

Explore the Strategy of Closed Loop Marketing

closed loop marketing

In business, knowledge is power. Collecting, analyzing, and leveraging the right information about your customers is often the difference between market leadership and failure. Successful companies rely on the purchasing behavior data they collect to outpace their competition with better advertising and marketing to attract new customers, and retain existing ones.

Closed loop marketing is a highly effective method of collecting and analyzing customer data from multiple channels and using the information to create targeted content for groups of customers (See also Targeted Marketing). It provides a continuous cycle of obtaining customer’s preferences and adjusting the marketing strategy to apply.

For example, when a customer visits a company’s website, their preferences and search history are logged in a database. Marketers can then adjust and tailor the marketing strategy for that customer based on that data. The more a customer returns to the website, the more information is gathered. This two-way marketing allows companies to increase the relevant information obtained, and continue to modify the marketing approach to each individual customer.

A company such as Barnes and Noble Booksellers, which has multiple sales and marketing channels, captures information from customers’ online and in-store purchase history to optimize marketing initiatives. Customers who have shown a preference for e-book downloads may be offered a special pre-release purchase opportunity for an e-book in their favorite category. At the same time, a customer who has made multiple in-store purchases may be sent a digital coupon toward their next in-store purchase.

Essential steps of Closed Loop Marketing

  1. Attract website traffic
  2. Track website traffic origins
  3. Monitor online consumer behaviors
  4. Trigger automated content delivery for specific targets
  5. Analyze results
  6. Continuously evaluate the sales funnel
  7. Calculate return on leads and investment

This data-driven approach to producing marketing materials enables the company to address a number of customer segments with messaging that drives sales and revenues among new and existing customers. With advanced online marketing technologies, much of the process can be automated, helping the company reach the widest audience possible more efficiently and cost-effectively.

Using customer relationship management (CRM) tools and content management systems (CMS), marketers refine and produce the most relevant content and offers to customers. As knowledge about the customer increases, the content becomes even more individualized for specific consumers across multiple marketing channels.

Combining the data collected across different platforms—mobile, Internet, kiosk, in-store, etc.—enables marketers to measure return on investment (ROI) for marketing programs across all channels, both online and offline, at a granular level. With the right tools, marketers can accurately measure everything from ad impressions and page views to leads, sales, and campaign revenue in infinitely greater detail for more effective marketing practices. (See also Interactive Marketing)

Who employs closed loop marketers?

Companies with multi-platform sales and marketing channels need highly skilled employees to execute closed loop marketing strategies (See also Multichannel Marketing). Employers may be local businesses or national and international companies with a global customer base.

Drip Marketing vs. Closed Loop Marketing

Drip marketing

  • Follows a pre-set, chronological schedule
  • Targeted audience must opt in
  • Primarily email based on a daily, weekly, or monthly calendar
  • Driven by automated systems
  • Limited continuous data analysis

Closed loop marketing

  • Involves multiple departments or sales channels
  • Includes many data sets from disparate audiences
  • Communications are based on previous customer actions or information
  • Ongoing data analysis after each marketing communication
  • Communications triggered by specific actions or data thresholds

Retailers, service providers, manufacturers, and direct sales organizations are examples of companies that may require the services of a seasoned, closed loop marketing professional.

For example, a local bank branch may need a marketer to help drive traffic for a checking account campaign. While many banks may rely solely on television and radio ads to attract new customers, a bank employing closed loop marketing strategies has more options.

Using compiled information about customer behaviors, a marketer can cross promote offers to its existing branches by producing mail pieces for customers receiving their monthly statements in the mail or high-quality emails for those who prefer email delivery (See also Email Marketing). Similarly, identifying how a prospective customer reached the bank’s website, which content they viewed, and their self-reported demographic information can help a marketer tailor an email message or flyer to the prospect’s needs and increase the likelihood of acquiring them.

What kinds of customers can be reached with closed loop marketing?

Closed loop marketing encompasses all marketing efforts directed toward consumers across a company’s sales channels and platforms. Today’s consumers have more options than ever to source, research, and purchase the goods and services they want. The advantage of closed loop marketing is that marketers can effectively monitor and analyze consumer behaviors regardless of where or how they purchase, and tailor offers to engage the widest audience at a very personal level.(See also Shotgun Marketing)

Using an array of online and offline analytical techniques, marketers can better understand their customers’ purchasing preferences and create higher impact marketing communications. For example, a car rental company may allow its customers to complete a rental online or at a kiosk in the airport. At both points of sale, the company collects information about its customers and compiles the data in backend databases for segmenting and analysis.

Data is analyzed to identify common traits among groups of consumers or to spot individual preferences. These segments become the basis for the company’s future email and online marketing communications, helping companies reach larger groups of prospective customers.

How is a closed loop marketing plan developed and deployed

An effective closed loop marketing plan begins with inbound traffic from a company’s website. A website is a company’s central hub for conducting its business and is the primary destination for customers reached by a company’s social media, email, and paid search campaigns(See also Web Marketing). Professionals use online marketing analysis tools to understand how visitors engage their content enabling them to allocate financial resources specifically to campaigns that produce results.

10 Best-in-class technologies

  1. Email marketing
  2. Web analytics
  3. Integrated web analytics/Email marketing
  4. Lead prioritization/scoring
  5. Marketing database
  6. Segmentation rules
  7. Web content management system
  8. Customer profiling tools
  9. Click stream analysis
  10. Customer analytics

(Source: Aberdeen Group: The CMO Strategic Agenda, March 2008)

A key factor in content optimization is the ability to effectively track how prospective customers found the website. An effective strategy for tracking traffic is to use unique URLs and links associated with specific marketing campaigns. Creating a tracking URL can be as simple as adding a parameter to the end of the company’s website URL. When visitors click on the tracking link, an online web analytics tool can automatically capture when, where, and through which platform a user entered the website. This information is vital to building accurate customer and group profiles that help marketers determine the best use of their resources.

After identifying where traffic originates, successful marketing campaigns also measure online customer behaviors. Monitoring and analyzing the clicks a customer makes online—called the customer pathway—provides valuable clues to the content and images that speak to their buying motivations (See also Post-Click Marketing). Understanding customer pathways can help companies minimize the number of abandonment points on their site. This creates more efficient pathways to guide customers toward and through the sales process faster. An easy, personalized, and relevant online sales experience is essential for improving conversion rates and driving new revenues.

Understanding online customer behaviors can also help companies develop special microsites and landing pages that specifically address different customer segments. Sending incoming traffic directly to a landing page can help marketers collect important customer data and, more importantly, separate qualified from not qualified leads.

The last step is attributing sales back to the leads generated either online or through direct sales efforts. This allows marketers to dedicate more time and effort to supporting campaigns that have proven to produce revenues. It’s a complicated process, but integrated CRM and CMS platforms can automate the majority of these tasks, helping save marketers a lot of time while improving overall performance.

What types of careers work with closed loop marketing?

Closed loop marketing includes a number of customer-facing marketing roles as well as behind-the-scenes analysis positions. Here are some of the most popular career choices:

Email Marketing Manager

What do they do?

Salaries of closed loop marketers

  • Email Marketing Manager:
    Median Salary: $63,000
    Top-earners: $90,000
  • Marketing/Strategy Analyst:
    Median Salary: $62,800
    Top-earners: $84, 400
  • Director of Marketing/Marketing Director:
    Median Salary: $131, 000
    Top-earners: $184,000

Source: Salary.com, PayScale.com and Glassdoor.com

Email marketing managers spearhead a company’s online customer acquisition efforts. They design and execute internal and external email strategies to complement outbound marketing efforts by moving prospects through the marketing funnel from website visitor to customer. In addition, the email marketing manager is responsible for adhering to CAN-SPAM regulations and leading the company’s online data analysis efforts.

Education and Experience

Email marketing managers are mid- to executive-level managers. At minimum, managers should possess a bachelor’s degree in technology, marketing, advertising, or other business-related degree from an accredited college or university. In addition, managers are expected to posses three to five years of direct email marketing experience with specific emphasis on design, content development, and personalization tactics for email campaigns.

Marketing/Strategy Analyst

What do they do?

Marketing and strategy analysts act as internal consultants to several areas of a business, including marketing, merchandising and website optimization teams. The position plays a key role in developing business strategies, consumer initiatives, and reporting that are essential to the company achieving revenue and profit growth.  Responsibilities often include site testing, data modeling, and forecasting. 

Education and Experience

Marketing and Strategy Analysts are expected to hold a bachelor’s degree in a business discipline from an accredited college or university. In addition to the degree, hiring companies will expect two or more years in equivalent experience, as well as well-developed skills in quantitative analysis and mathematical proficiency. Candidates must possess a high level of proficiency using data mining and analysis software, as well as standard office software such as Microsoft Excel and Microsoft Word. Direct experience with database marketing is often highly desired.

Director of Marketing

What do they do?

The Director of Marketing (also called Marketing Director) is responsible for the strategic direction and oversight of all brand strategy and messaging initiatives. Directors oversee the development and ongoing maintenance of the company’s website, the management of public relations, and thought leadership efforts. Commonly, the director of marketing also holds a support role in new client pitches and proposals.

Education and Experience

The director role is an executive leadership position that requires a bachelor’s degree in marketing, business management, or other business discipline. They should have seven to ten years of experience in a marketing environment. This role may also require specific experience with website architecture and design, email marketing campaign development and analysis, and substantial knowledge of branding and brand marketing principles.

How can a marketing school help you succeed in a company that uses closed loop marketing strategies?

Marketers need to be well-rounded professionals. To effectively contribute in a closed loop marketing environment, they need to understand basic consumer psychology and be well-versed in data analysis, content development, and writing.

Students in marketing degree programs complete an array of courses in business communications, consumer behavior, and advertising. In these courses, students learn best practices for developing high-impact sales content and copy proven to drive revenues.

In the Internet age, more companies than ever have a marketing or sales presence across multiple platforms, including online, mobile, and traditional brick and mortar stores. A marketing program helps students learn to evaluate data sets from each channel or platform and compile the information into a comprehensive overview of a campaign’s successes or shortcomings.

A marketing degree gives students the opportunity to get theoretical and practical experience in all areas of marketing. Students in marketing degree programs learn the fundamentals of consumer segmenting by demographic, psychographic, and other buyer attributes. In addition, they develop essential skills in market research and data analysis so they can clearly, quickly, and accurately interpret the data they collect in a corporate marketing environment. (See also Market Analyst)

Class materials challenge students to use the information they’ve collected to devise creative ways to deliver their sales messages to a target audience. For example, a marketing strategy course may include a section dedicated to A/B and multivariate testing. Using powerful online analytics tools, students can compare consumer responses to images, offers, and other content side-by-side in real time. By understanding how and why consumers respond to specific images or content, students can adapt their initial strategy to create a higher impact, more effective campaign, just as professional marketers do.

Students in marketing programs take the skills they learn with them into the workforce. Because marketing practices evolve rapidly, it’s important for a marketer to have the skills and knowledge to quickly adapt marketing plans to meet the demand and needs of the target audience. Unlike job candidates with specialized degrees or experience, students completing a marketing degree program emerge with employable, professional-level skills.

To learn more about how a marketing degree can help you succeed in closed loop marketing organizations, request information from schools offering marketing degrees.

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