In many organizations, the marketing and sales teams are two separate entities. There might be some crossover, but there can be little insight into how marketing activities drive conversions.
Closed-loop marketing seeks to solve this problem by combining marketing and sales data for a 360-degree view of the customer journey. It’s especially important for knowing where social media fits in, how it contributes to ROI, and what you can do to improve it.
With more than 5 billion active user identities around the world (and counting), your business needs social media—and you need to know that it’s worth the investment. So, let’s take a look at how closed-loop marketing can help.
Image from Forbes Advisor
What is closed-loop marketing?
Closed-loop marketing (CLM) is a marketing strategy that sees the marketing and sales teams work together, gathering data from the entire customer journey. Both teams analyze the data and use the insights to optimize future campaigns and improve return on investment (ROI).
This methodology is called “closed-loop” because it involves a continuous cycle of tracking, analysis, feedback, and improvement. It connects data from all customer touchpoints as well as removing the disconnect between marketing and sales.
How does it work?
The marketing and sales teams carry out their usual activities, from creating promotional materials to implementing inbound marketing strategies and nurturing leads toward conversion. The difference is that they share information about their strategies and the results, so that both teams can see how the activities impact the outcome.
Marketers create data reports for all activities, while the sales team provides data on final conversions and sales. By working together, the teams can link success and revenue to specific marketing efforts, and figure out which ones are most effective for ROI.
CLM involves tracking how prospects found your brand online and which marketing materials encouraged them to take certain actions. Marketing and sales teams typically use customer intelligence systems to help collect relevant data.
What are the stages of closed-loop marketing?
There are a number of distinct stages in this methodology. For this article, we’ll focus on how it works for social media marketing.
Traffic generation
The loop begins with traffic-generation activities. As well as engaging visuals and articles, you’ll focus on posts that encourage interaction—from likes and shares to polls, quizzes, contests, and user-generated content. You’ll link to your socials from your other online content, and vice-versa.
Identification and Tracking
Now you need to see who’s browsing your social networks and how they got there. Did they click through from a paid ad, or an affiliate link? Did they arrive via Google? By tracking where your visitors came from, you can see which marketing tactics are driving traffic. For instance, which social platform attracts the most people to your main website?
As visitors browse and interact with your content, you’ll track their behavior. That way, you can see which sections hold their interest. What type of content eventually leads to the most conversions and sales? Following their actions through social media and beyond shows you a picture of the customer journey.
Image from Hubspot’s ‘The State of Marketing Report 2024’
Lead capture and nurture
Lead capture is all about incentivizing people to give you their contact information, often in exchange for receiving an email newsletter or gaining access to VIP promotions. When someone fills out a sign-up form, the details appear in your CRM system. The sales team can then reach out with relevant content and personalized interactions—not forgetting to track everything they do.
Conversion
After the sales team follows up with prospects, some of them will convert and become paying customers. It’s important to record all purchases and personal details so that you can combine them with marketing data and attribute conversions to the right channels and campaigns. Don’t forget to take feedback from new customers as well as existing ones.
Analysis and adjustment
What led your social media visitors to become customers? Close the loop by combining data from both teams and analyzing the whole journey. This will inform and guide your future efforts. With deep insights into your audience, you’ll know the right time to use strategies such as account based marketing tools or targeted email campaigns.
Benefits of closed-loop marketing for ROI
Closed-loop marketing provides a framework for collecting and analyzing information, and making data-driven decisions to boost engagement and ROI. It helps you to:
Align sales and marketing teams
Closed-loop reporting encourages your sales and marketing teams to work together, sharing data and insights and using each other’s expertise. With joint input, they can connect the dots and identify the revenue achieved from each marketing tactic or channel.
Boost efficiency
The closed-loop technique is a key factor in driving efficiency in sales and marketing. Once the two teams are communicating and collaborating effectively, you can shorten the sales cycle and minimize the time it takes for leads to become paying customers. Greater efficiency also helps you to reduce your cost per lead.
Image from Hubspot
Reduce costs
Apart from minimizing cost per lead, closed-loop marketing brings costs down by focusing your resources on strategies that generate the best ROI. By identifying the most successful campaigns, channels, and customer segments, you won’t be wasting time and money on poor-quality leads or efforts that don’t boost conversions.
Improve customer experiences
Through in-depth analysis of the path toward conversion, you can see which marketing materials and techniques are most appealing to different groups. When the sales and marketing teams share behavioral data and customer feedback, they’ll have more awareness of customer preferences—and use this to deliver a better experience.
Refine your strategies
Since closed-loop marketing is all about gathering and analyzing data, it gives you the opportunity for continuous optimization of your strategies. You can also experiment with new tactics or channels before fully committing. Want to know if generative AI chatbots are right for your business? Try them out and listen to the feedback!
Specific benefits for social media ROI
Closed-loop marketing shows you which social media platforms are most effective for engaging visitors and converting them. If you’re using paid ads on social media, you can look at financial data and determine which platforms represent the best ROI.
You’ll be able to see which types of content work best on which channels, and the optimum times to post them. The data-gathering process helps you to gain valuable insights into potential customers, which you can use to personalize nurture activities, and attract more people with future campaigns.
The past few years have seen a rise in social shopping (where users can make purchases without leaving the social platform), with revenues forecast to exceed one trillion dollars in 2028. Closed-loop marketing ensures that sales are properly attributed to shoppable posts and that you can take full advantage of this growing opportunity.
Image from Statista
Metrics to consider
Between the marketing and sales teams, there will be plenty of relevant metrics to help you evaluate the success of campaigns, channels, and strategies. The trick is to think about which ones are most useful to your business and its objectives. Look for trends and patterns in customer behavior, and always focus on how you’ll use the insights to optimize marketing efforts.
For social media specifically, you’ll want to measure things like reach and impressions, follower growth rate, interactions (likes, reactions, comments, and shares), and the click-through rate from any paid ads. In more general terms, closed-loop marketing metrics include:
- Net marketing ROI
- Sales revenue
- Conversion rates
- Customer acquisition cost (CAC)
- Cost per lead (CPL)
- Customer retention rates
- Customer lifetime value (CLV)
It’s helpful to measure the totals as well as looking at the metrics per channel or campaign.
How to implement closed-loop marketing
Now let’s explore how to put a closed-loop marketing plan into practice, with a focus on social media.
Align your teams
The first step is to make sure your marketing and sales teams are fully on board with the methodology. Everyone must be committed to breaking down traditional silos between the teams, whether they’re preparing sales decks or launching new marketing campaigns. Facilitate regular meetings and provide the right tools for communication and collaboration. A seamless flow of relevant data is essential.
Track and engage
Now you can start tracking customer interactions. Monitor visitors using social media management tools, which track mentions, direct messages, and comments. You’ll then be able to unlock insights into sentiment and preferences, and engage with them accordingly.
By tracking all interactions with prospects and customers—not just on socials—you can get context for social media behaviors.
Image from ‘Digital 2024 Global Overview Report’
Centralize the data
Use a CRM system to centralize all data and create a database for future reference. Not just contact details, but sales records and any other insights you gain along the way.
With easy access to this data, the sales team can pick up warm leads, and marketers can segment visitors to create more targeted campaigns. Personalization also helps you maintain strong relationships with existing customers.
Extract insights
With the data at hand, you can spot patterns in customer behavior—and understand which marketing efforts are most successful. It’s important to focus on actionable insights that directly point to areas for improvement. As well as analyzing social media and website visits, you can derive extra insights from support interactions via omnichannel contact center software.
Collect feedback
As we mentioned earlier, customer feedback is a big part of closed-loop marketing. Surveys and polls especially led themselves to social media, but you can also use traditional CSAT surveys, as well as looking at product and service reviews. Use this feedback continuously to inform your messaging, social media marketing strategies and sales techniques.
Closed-loop marketing best practices
So now you know how to get started with closed-loop marketing, but how do you really excel? Let’s take a look at a few best practices to bear in mind.
Use the right tools
Don’t just rely on your staff – support them with the right technology. Tools like CRM systems and analytic suites are invaluable for capturing and interpreting data across all touchpoints. Meanwhile, you can use marketing automation tools to track visitor behavior and schedule social posts at optimum times. Top it all off with robust communication software to keep the teams connected.
Make sure to invest in tools that integrate with each other, and maximize the efficiency of your tech stack with technology portfolio management. Keep an eye on the future by considering AI-driven analytics and predictive modeling.
Standardize collection and analysis
If cooperation between sales and marketing is going to work smoothly, everyone needs to be singing from the same song sheet. It’s important to be consistent in your tracking and analysis processes, and to provide a standardized system for collecting data and sales and attributing them to the correct marketing source.
Free to use image from Pexels
Optimize the sales process
Before you get started with closed-loop marketing, it’s definitely worth making sure that your basic sales processes are working properly. If there are any gaps or bottlenecks, you’re not going to see the right results from your analysis.
Experiment on social media
Use the data from closed-loop marketing to help you test out new strategies. If you’re thinking of trying out a new social media channel such as Twitch or TikTok, look at the preferences of your target audience to gauge the likely level of interest. The tracking systems you’ve put in place will also make it easier to run A/B testing to see which version of a post gets more traction.
Use lead scoring
Lead scoring is a tried-and true way of qualifying your leads, with each lead assigned points for various actions or behaviors. Marketers can do this before sharing the results with sales reps—saving them from wasting time on following up with unlikely prospects.
Prioritize CX
The most important tip for closed-loop marketing is to remember that the customer (or potential customer) should be at the heart of all your efforts. As you use the data to develop improved strategies, don’t just think about the ROI. Happy customers become loyal customers, and they’ll also recommend you to others.
Use closed-loop marketing to elevate social media ROI
By fostering close collaboration between marketing and sales, closed-loop marketing makes it easier to see which of your social media strategies are paying off. It drives informed decision-making and resource allocation, and encourages continuous improvement through actionable insights.
Collecting and analyzing data gives you an accurate view of what prospects and customers want and need, so that you can adjust your social media content and channel mix. When your social media strategies are on point, you’ll see a higher ROI—which contributes to overall company success.
