What Is Closed-Loop Marketing (CLM)?

Simply put, closed-loop marketing (CLM) gives marketers visibility to see the marketing efforts that lead to sales. A related concept is "attribution." It helps marketing teams measure which marketing campaigns are most successful, and why. When the sales team communicates its results to the marketing team, and marketing then tests new ideas to improve its marketing campaigns, generating better leads to share with sales, the "closed-loop" system generates a virtuous cycle.

closed loop marketing diagram

Why Close the Loop?

The goal is to eliminate guesswork and show return on investment (ROI) from marketing campaigns and their role in the sales process. You want to be able to justify (or cut back on) marketing costs for social media, inbound marketing, email campaigns, content marketing, marketing automation, and other marketing initiatives. Having the proper marketing data also has major impacts on marketing strategy – what you can't measure you can't successfully improve or optimize in a strategic way. The best optimization happens when you have proper data and closed-loop reporting in place. 

The fewer questions the marketing department has, the less they have to guess how to improve their marketing channels, lead generation, and customer acquisition efforts. For example, let’s say B’s Countertops is running a marketing campaign. There are numerous questions to answer before B can say “we’re performing the best we possibly can on this campaign.” The team needs to understand the ideal persona for new customers, for example. One way the team at B’s Countertops can learn about the market is through market research. Another is by communicating with sales to find out what kind of consumers are most likely to make a purchase. B needs to establish that line of communication between sales and marketing to close the loop.

Closed-Loop Marketing Works!

The benefits of closed-loop marketing include:

  • Eliminates Guesswork
  • Increases ROI by Decreasing Cost per Lead
  • Increases CLV (Customer Lifetime Value)
  • Helps the Team Perform 

On the other end of the spectrum, “open-loop” businesses are full of employees who don’t have the information they need and find it difficult to get results. The more fractured the loop is, the less effective the marketing is likely to be.

Identifying Weaknesses in the Sales Funnel

HubSpot gives businesses much of the information needed to answer questions for the whole marketing team. It’s particularly useful for making marketing-data-backed decisions about marketing funnels and webpages as they apply to the buyer’s journey. 

The three stages of the buyer’s journey are as follows:

  1. Awareness Stage: The prospect has a problem or need. He may not know what the problem is yet, but is attempting to understand it.
  2. Consideration Stage: The prospect has given a name to a problem or need and is searching for solutions to it.
  3. Decision Stage: The prospect has an idea of how to tackle the problem and is considering different products or services with which to do it. This can be a long process, as there may be many viable options.

Campaigns shouldn’t always aim for direct conversions. Sometimes it’s best to start with awareness. Marketers should communicate with consumers according to the consumer’s stage in the buyer’s journey. 

Let’s consider B’s Countertops again. Say Ryan doesn’t like the countertop in his new home. He doesn’t yet know what kind of countertop he wants or even what kinds are available, however. That means he’s probably around the beginning of the second stage. Ryan isn’t ready to go ahead and buy a product and might not respond well to communication that attempts to close the deal right away. Information about the kinds of countertops that are available might help him, though. An impressively written page explaining his options will inform him and give him a positive opinion of B’s, increasing the chances that he will choose B’s in the end. 

Analytics tools like Google Analytics and HubSpot’s Website Analytics can help B’s marketing team figure out how well pages are doing in terms of pushing visitors to the next stage in the buyer’s journey and ultimately, through to the sale. 

Here’s a HubSpot Analytics table showing how many contact form submissions and new contacts resulted from views (visits or sessions) of particular web pages.

HubSpot Analytics table showing how many contact form submissions and new contacts resulted from views (visits or sessions) of particular web pages

 

This can be filtered to show landing pages, blog posts, or other types of content. When submissions or new contacts aren’t the goal, the bounce rate is a strong indicator of how well the content is working. HubSpot can be configured to track button clicks and other actions, as well. The idea is to continuously improve the results, and that’s easier when the loop is closed.

A marketer can break his pages down by stages of the buyer’s journey, or he can create a custom report to show the rate of transfer from each stage of the funnel to the next. It’s even possible to see an individual’s specific actions along the way. Here’s an excerpt from a customer’s history showing how he submitted a form and became a lead after viewing a page. Notice the timestamps in the upper-right corner of each entry.

An excerpt from a customer’s history showing how he submitted a form and became a lead after viewing a page

There are similar features in Google Analytics and other applications. Not all are as simple to set up as HubSpot, however.

A/B Testing in CMS Hub

When a funnel weakness is identified, it can be difficult to find a good way to strengthen it. Often, marketers turn to A/B testing, which means testing one variation of a page versus another and comparing the data. Tools like Optimizely, Google Optimize, and HubSpot's CMS Hub simplify the process. A/B testing is a common CRO practice.

In HubSpot, navigate to Marketing>Website>Landing Pages. You can click on the Website pages tab to view those, as well. Then find the page to be tested against a new variant and hover over it. Click either More or Actions, and then click either Run a Test or Create A/B Variant.

An excerpt of a Landing Page where you can click either More or Actions, and then click either Run a Test or Create A/B Variant.
Source: HubSpot


Both versions of the page will then be displayed to visitors according to the “distribution” of them, which can be adjusted. Typically, 50% of visitors will be sent to one page while the other 50% will see the other page.

Image showing both versions of the page will then be displayed to visitors according to the “distribution” of them, which can be adjusted
Source: enrollmentbuilders.com

 

Select a “winning metric” by which HubSpot can judge the winner of the test, and set the duration of the test before going live. The results page looks something like this for an email test (yes, CMS Hub has different “winning metrics” for different types of content).
 

Image showing an A/B test overview, which focuses on "Open Rate"
Source: enrollmentbuilders.com

For an email test such as the one above, the tester chose to focus on the open rate. For a landing page test, he might pay attention to other customer data such as bounce rate, conversion rate, or other metrics. Keep in mind that the more visits that are logged, the stronger the data is. It’s usually not a good idea to base a decision on just a few visits. The example test above logged over 6,000 visits per page, which provides a strong indication of the variant that works best even though it only won by 0.9%. Sometimes the difference will be much greater.

Feedback received from the sales team (in closed-loop marketing fashion) can help marketing decide on new content to test. For example, what if sales has found that 75% of the latest 2,000 leads are interested in getting quotes for marble countertops, the most expensive material B’s Countertops offers? Giving that insight to marketing would be helpful. Marketing could test a landing page with a subheadline saying “Ask About Our Marble Specialists” versus a page that doesn’t include a subheadline to find out which one generates conversions best.

Addressing the Right Person with Dynamic Content

Let’s take the feedback example above to the next level. What if B’s Countertops has a list of subscribers who have expressed interest in a particular kind of countertop material. The material they’re interested in has been tagged on each of their profiles, so there are different list segments for each material. B’s dynamically inserts different text into sections of a page or email content depending on which segment is viewing it. Each segment sees different text, in other words. For leads interested in granite, a page might say “Thanks for expressing interest in our premium granite products” while for those who are interested in polished concrete, the page could say “You’ve chosen well. Polished concrete is trendy and cost-effective.”

In HubSpot, dynamic content can be designated for values in six categories:

  • Country
  • Device Type
  • Referral Source
  • Preferred Language
  • Contact List Membership
  • Contact Lifecycle Stage (subscriber, lead, qualified lead, etc.)

Here’s how this “segmentation” happens:

Values like country, device type, and referral source are automatically tagged to each visitor in most cases, thanks to cookies. HubSpot and other analytics tools use a tracking code that is published in the website code to do this. The process of installing the code is fairly simple for most websites.

The other values – language, contact list membership, and contact lifecycle stage – are tagged when site visitors go through touchpoints that qualify them. Usually, visitors become leads (a stage in the contact lifecycle) after filling out contact forms. For example, they may select a language such as Spanish, which segments them as Spanish-language speakers. They may sign up for a webinar about eco-friendly construction materials (another “B’s Countertops” example), which could segment them into an eco-conscious segment.

Sometimes leads aren’t automatically segmented, however. For example, leads from spontaneous word-of-mouth communication can’t be given a referral source automatically. Sales teams can ask leads how they found out about the company or product when the source isn’t available so that marketing doesn’t have to use generic copy for a group of leads that might be diverse in many ways. Closed-loop marketing is all about sharing this kind of helpful information. The result is that marketers know what paths are commonly taken by users in each segment from first contact to first purchase and beyond.

Solving Customers’ Problems & Getting Feedback

Over the years, the line between service and marketing has blurred. Educating customers, solving their problems, and promoting products or services to them can (and often do) occur simultaneously. So why not include the service and support departments in the loop? They might have the most intimate, most “natural” relationship with the customer out of everyone in the organization, after all. Just as sales should provide insights to marketing and other departments, so should service.

Satisfying customers starts with solving their problems. Businesses that do that well have a head start on maximizing customer lifetime value. It’s important, then, to have a good ticketing system in place. HubSpot delivers that with Service Hub, but it also takes it a step further so that delighted customers can be leveraged and turned into promoters. 

There are different ways to do that. Positive reviews can be displayed on webpages to increase conversion rates and enhance the SEO value of the content. Businesses can offer cash to happy customers that refer their friends. They can offer discounts to upsell or cross-sell current customers who are more likely to sign up because they’re satisfied. There are many creative ways to leverage customer satisfaction, but make sure to start by maximizing it.

An image of the basic representation of the lifecycle process
A basic representation of the lifecycle process.
Source: HubSpot

 

What Solutions Compare to HubSpot?

HubSpot does a lot. It’s a customer relationship management platform (CRM), a content management system (CMS), an analytics tool, a chat app, a ticketing app, and an e-commerce management tool. A key benefit of HubSpot is that all of this is available as a package. It’s all there once the marketer has signed up. Signing up is probably the most difficult part of getting started with HubSpot due to the choices available. A business can subscribe to the CRM, Marketing Hub, Sales Hub, and Service Hub separately or opt for a bundle that includes all of them. As with any set of products, the individual apps seem overpriced compared to the suite.