It’s no secret that analytics are the one of the most powerful tools we, as marketers, have access to today. Between tracking website traffic using Google Analytics to measuring the cost-per-click of your latest Facebook advertising campaign, companies have access to more information about their business and their customers than ever before. This is great news because not only does it mean that you can prove the effectiveness of your marketing, it also means that, given the right amount of analysis, you are able to uncover powerful insights about your customers and your sales process giving you more power than ever.
The sheer volume of metrics and analytics available allows us to track nearly everything our businesses do in a given time period but that can be somewhat overwhelming. After all, wouldn’t it be more beneficial to be able to connect all of your campaign and transaction data together so you can more easily determine which platforms and channels are delivering the most value and track your entire customer lifecycle from beginning to end? Good news! You can. It’s called closed-loop analytics. Let’s take a look at what this means, how you can implement it into your organization and how it will help you draw more educated correlations and insights about your business.
What are closed-loop analytics?Closed-loop analytics lends insight into the entire customer lifecycle – from the time they first interact with you, to the time they become a customer. When implementing closed-loop reporting, you are “closing the loop” between the data collected by marketing and the data collected by sales. Implementing a closed-loop reporting process allows markerters to make decisions on actions that occur further down the funnel than they are normally able to.
Why closed-loop analytics are importantHistorically marketers have dealt primarily with top-of-the-funnel lead generation tactics and analytics and salespeople have dealt with the lead-to-customer transition and metrics. With closed-loop analytics, marketers are able to evaluate how their efforts are performing through the entire business lifecycle from visitor all the way through customer. This allows marketers to draw insights and make decisions based on actions further down the funnel on what drives the greatest ROI for the business. This is great for marketers and for high-level executives, as marketers are able to make more informed decisions about how to spend their marketing budgets and high-level executives are able to more accurately measure the effectiveness of marketing in driving bottom-of-the-funnel conversions.
Closed-loop analytics help companies transform (and track) anonymous web visitors into leads who can then be converted into customers. It also allows us, as marketers, to see what channels and tactics are ultimately creating leads, conversions and sales.
Where to start with closed-loop reportingNow that you understand the benefits of closed-loop analytics, how do you implement them into your organization?
In practice, closed-loop analytics is comprised of comparing data between two or more analytics tools. As you probably know, marketers typically track their campaigns using an audience-tracking tool such as Google Analytics. Likewise, the sales team usually tracks their prospects and leads using a CRM platform. Closed-loop analytics require that the person measuring the metrics look at tracking platforms that both the marketing team and sales team rely on in order to get a full view of the customer lifecycle.
While there are some audience-tracking tools and CRMs that work together, since sales and marketing have historically been separate departments and functions within a company, many businesses are using softwares that don’t talk to each other. That’s ok! You can still implement closed-loop analytics and you don’t even have to upend the company processes by implementing all new software. Sure it’s going to take a little more effort on your part to analyze metrics in two different places, but it is possible. Let’s take a look at how you can use your existing process to implement closed-loop analytics:
A successful sale (at it’s most simple) usually has four stages:
- Visitors arrives at your website
- Visitor browses your website
- Visitor converts to a lead by filling out a form
- Lead becomes a customer
- Visitor arrives at your website As a marketer, you are probably already familiar with metrics that measure visitors arriving at your website but since each step of the process is a crucial component of closed-loop reporting, allow us to explain anyway.Even the most simple audience-tracking tools will track the source of a visitor when they land on your website. Whether your visitors are coming from organic results, PPC, social media, email marketing or any of your other marketing tactics, it’s important to understand where your visitors are coming from first and foremost.Here is a pretty basic sample report pulled from Google Analytics showing the sources of this website’s visitors. You’ll notice from this report that the majority of visits are direct (or there’s no known source) followed by organic search. Your results might indicate that you’re receiving more traffic from your social media profiles than your SEO results. Regardless of where your traffic is coming from, understanding your sources is the first step in determining what efforts are most effective in bringing in new customers.
- Visitor browses your website Once you have captured your website visitors, you can begin tracking additional information about them and how they navigate your website. Some valuable information that you’ll want to look at includes what pages they visit, in what order they visit those pages and how long they stay on each page. Ideally you would be able to track this information for each individual user, but if your audience-tracking software provides this information in aggregate (as Google Analytics does), that’s a good starting place too.Here is a sample of how Google Analytics provides page view information:
- Visitor converts to a lead by filling out a form
Most simple audience-tracking software does not, by design, show you which visitors on your site convert by filling out a form. Instead, these people will be converted to leads and sent to a salesperson by email and/or entered into the sales CRM. Most companies stop their marketing efforts here as the leads are turned over to salespeople for nurturing. When implementing closed-loop reporting, however, you want to continue your tracking through this stage and the next. The good news is that although simple audience-tracking software isn’t set up to track these conversions, there are a few options for you to capture and analyze information on visitors who become leads:
- Implement a software that tracks form conversions
- Customize your current software to track form conversions Many audience-tracking softwares will allow you to create a way to track conversions. For example, if you are using Google Analytics, you can set up a Goal to track conversions in addition to all of your other metrics.
- Track them in the sales CRM One way that many salespeople receive leads is through visitors on the website converting by filling out a form. When this happens, it’s likely that the salesperson will either get an email with information about that lead and manually enter it into the CRM, or it will be automatically entered into the CRM.
- Lead becomes a customer Traditionally, marketing’s job ends once the lead enters the CRM and sales picks it up from there. But with closed-loop analytics, marketing continues to track the lead through to becoming a customer (or to becoming a closed – lost deal) to determine which of their efforts result in leads that do buy and which result in leads that don’t buy. This is the step in which it starts to become complicated to determine which tactics lead to sales and which don’t without software that tracks actions of individual users.
Closed-loop marketing not only allows marketers to better understand their efforts, it also helps the entire company determine whether what they’re doing is effectively bringing in new customers or not, something that businesses are traditionally not great at understanding. In fact, according to the Content Marketing Institute, only 21 percent of B2B marketers are successful at tracking ROI. Shifting to closed-loop reporting is a huge step in solving that challenge. In addition to better understanding your customer metrics, closed-loop reporting also enables marketing and sales teams to work more closely together. This is sure to lead to more effective marketing and more informed salespeople.
Whether your company measures using closed-loop analytics or not, choosing the correct KPIs to measure is crucial to ensuring that your efforts are targeted towards your overall business goals. Not sure how to choose which KPIs to track? Check out our FREE The Beginner’s Guide to Choosing the Right Marketing KPIs for Your Business eBook today!