By Katy Katz
Of all of the things that were taught during my undergraduate business program, there was one concept that was repeated ad nauseam: The No. 1 goal of a corporation is to make a profit for shareholders. Class after class, we learned that this goal trumps everything else.
Companies now boast proudly to the public about more millennial-approved visions. Google touts its mission of “do no evil,” and Southwest Airlines’ primary objective is to deliver “a feeling of warmth and friendliness.”
These are a far cry from the cold, bottom-line-obsessed companies they used to teach about in business school.
But no matter what a company, boss, or client decides their true mission is, at the end of the day, they all still need to make a buck. The clearest way to align marketing efforts to that goal is through closed-loop marketing and reporting.
In this article, I dive into the purpose of closed-loop marketing and explain which metrics you should report if you want to boost your marketing ROI.
What Exactly Is Closed-Loop Marketing?
Closed-loop marketing uses data to track your customers’ entire buyer lifecycles—”closing the loop” between sales, marketing, and customer service efforts. By tracking metrics, you can follow and record your visitors’ behavior across the entire Buyer’s Journey. With closed-loop reporting, you’ll have the hard figures to tie specific results back to your marketing initiatives, get a better understanding of what’s working, and use data to fuel your future marketing strategies.
Closed-loop marketing metrics fit beautifully into modern inbound marketing plans because website data is clean. You drop a cookie on a visitor, follow them around on their journey, and get a pretty picture of the process of becoming a customer. Sure, there are catches. But, for the most part, closed-loop reporting provides clear, measurable results to report back to your boss or client.
How Does Closed-Loop Reporting Work?
The magic ingredient of closed-loop reporting is the tracking code. Tracking codes, such as UTM parameters, are added to the end of your URL to identify the visitor’s source of origin. You end up with a URL that looks similar to the example below (I’ve bolded the UTM code in the URL):
That little string of characters on the end of the URL allows you to track your visitors throughout their journey with Google Analytics or the marketing software of your choice.
HubSpot put out a great visual on exactly how this works in four steps:
Source: HubSpot, How Closed-Loop Marketing Works
Following these four steps will give you better metrics for reporting and great insight into your target audience. Here are the steps in more detail:
1. Identify a visitor’s original source at the point they land on your website. This will show you whether they came in through social media, email, another website, or any of the many other digital gateways.
2. Track what the visitor does once they arrive. Tracking parameters allows you to play close attention to what visitors are actually doing on your site and the process they follow to get from A to Z. Pay close attention to this part for future optimizations.
3. Grab that visitor’s information when they fill out a form. Now you have a lead and can start monetizing your efforts.
4. Ding—customer! Close the loop and attribute the purchase back to that original source.
This post was originally published in February 2017 and has been updated since.