7 Benefits of Closed-Loop Reporting
In marketing, the meaning of closed-loop reporting is right in the name. It means to “close the loop” between data collected from marketing analytics software and customer relationship management (CRM) systems or sales teams. In closed-loop reporting, metrics from the top of the funnel down to the very bottom are tied together with a neat little bow to help you become a smarter marketer.
So how does it work? Marketing automation or analytics software provides one piece of the puzzle with data about how many leads you get from a specific channel, how you got those leads, and how you’ve engaged with them. While on the other hand, your sales team and CRM systems provide details on which strategies resulted in sales and the value of each sale.
By incorporating these two systems together, you can get precise feedback for each of your marketing campaigns. By adopting the basics of closed-loop reporting, businesses can enhance their understanding of what makes specific strategies successful and also what makes a prospect worth pursuing.
It’s a good start to know that a particular channel or strategy is generating leads, but it’s even better to know why it’s working. Ideally, you want to see the “big picture” and know exactly how prospects move through your sales funnel and what specific tactics increase the likelihood of conversion.
The Benefits of Closed-Loop Reporting
1. Focus on Your Best Channels and Prospects
Closed-loop reporting allows you to gain insights into how your audience interacts with your brand and its content. When you know what works and what doesn’t, you can narrow your focus to the best performing pieces of content, sales tactics, and landing pages.
This makes it possible to focus on the channel generating the highest quality leads and prioritize engaging those leads appropriately. By determining the communications that work best for your target audience, you can develop an optimized strategy that reduces your long-term Customer Acquisition Cost (CAC).
2. Present More Detailed Results to Your Boss and Clients
Closed-loop reporting lets you present comprehensive data to your boss or clients. How great is that? You can create charts and graphs to visually illustrate your ROI for every penny spent. You can also regularly track your data and determine the factors that contribute to every sale.
Claiming that your marketing strategy is generating leads and turning a profit can now be backed by data. Numbers from clear and accurate sources don’t lie.
3. Learn More About Your Buyer Persona and Target Audience
By gaining insight into your sales cycle, you can learn more about your customer’s behavior, needs, challenges, and triggers. It should come as no surprise to learn that the better you understand your audience’s motivators, the more effective your marketing efforts will be.
With closed-loop reporting, you can see the path that every user goes through until they make the actual purchase so you can better understand their buying journey and process. Differentiating your brand from the competition is all about knowing your customers better.
4. Sell Your Products and Services Faster and More Efficiently
Because you can see what’s working and what’s not, you can eliminate the parts of the process that don’t work. By seeing which channels are working best for your campaign, you can further eliminate testing processes that require time and resources, thereby shortening the time it takes to close the deal.
Don’t waste time sending your leads information that they don’t need. Send them the content that you know converts your leads into actual customers.
5. Allocate Your Marketing Budget More Effectively
With the ability to determine the effective channels driving revenue for your business, you can allocate more resources to areas that generate better ROI. Also, you can set realistic goals and expectations that enable you to determine the ceiling price for your marketing budget.
You don’t have to waste time, money, and effort on channels and strategies that don’t work.
6. Lower Your Customer Acquisition Cost
Since closed-loop reporting lets you shorten your sales cycle and eliminate the strategies performing poorly, costs are reduced. You have the information you need to maximize your budget and increase your revenue.
Do the math. Let’s say you allocated $1000 to Facebook advertising and $1000 to sending your sales team out to knock on doors. Your efforts on Facebook resulted in $500 (ROI=0.5) worth of sales and your sales team’s efforts resulted in $3000 (ROI=3) worth of sales. By eliminating Facebook Ads and focusing your $2000 budget purely on door-knocking, you can increase your overall return from $3500 to $6000 without increasing your spend.
7. Continuously Improve Your Marketing Strategy
User behavior changes through time in this ever-evolving market. That’s why it’s important to stay in touch with what users want. Nothing slips through the cracks by closing the loop between your marketing analytics data and your customer relationship management.
Closed-loop reporting allows for a continuous cycle of updates and improvement whenever you get new market information, so you never find yourself out of touch.
These benefits clearly outline why you need closed-loop reporting. Remember that closing the loop is all about getting more accurate data to help you understand your customers better. Also, note that you need to stay in touch with your customers to succeed in this increasingly competitive market, not necessarily with communications, but with your understanding of how they behave.
If you’re currently having difficulty attributing value to your sales and marketing channels, you’ll be amazed at what implementing a closed-loop reporting system can do to help.
The best way to “close the loop” is to align your sales and marketing teams.
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