A recent study from Marketing Charts reported 59% of businesses were seeking Digital Marketing staff specifically, more than any other in their marketing departments.
This doesn’t surprise me because, with the way the world of modern marketing is changing, there is no way you can continue to succeed as a business without adapting to your new surroundings and surrendering to the digital age.
However, in the past, it has been reported that a record number of CMOs lost their jobs due to failure to show business impact.
How are you meant to show how your impact on the business if you cannot attribute sales to your marketing efforts?
A colleague of mine kick-started her career at a local marketing agency and has told me how, in reality, agency work is not as glamorous as some make it out to be.
Agencies exist to serve clients, and the life of a digital agency employee is filled with demanding deadlines, difficult clients and ambitious projects. Juggling multiple jobs all day every day; if she wasn’t monitoring the technical SEO for a local carpet cleaning company, there was content for a motor dealership that needed to be produced.
A common struggle she mentioned throughout it all was when it came to measuring the success of each campaign, she was unable to prove that calls were being generated from her hard work. Plus, she didn’t know how many form completions actually went on to make a purchase.
Eventually, she joined Ruler Analytics in-house where she began to understand the opportunities that closed-loop marketing could bring.
And instantly, she fell in love! The problems she was facing before did not seem so daunting and job threatening with the help of Ruler’s simple, yet powerful reporting.
For those who don’t know Ruler Analytics, it’s a visitor level multi-touch marketing attribution tool that closes the loop between revenue and leads.
CEOs, business leaders and clients expect marketing to drive business growth and revenue. And provide evidence to back up results.
If you’re looking for a solution that proves marketing’s value, impact on the business, and the amount of revenue generated, then it’s time to look into closed-loop marketing.
So, what is closed-loop marketing?
First, let’s establish why closed-loop marketing is only becoming relevant now.
For many B2B companies, marketing and sales occur sequentially:
Marketing = generates awareness, interest, and leads.
Sales = takeover these leads, and manage the relationship until they close into a won deal or are deemed to be lost.
That’s when the customer’s life cycle will begin. The challenge facing many B2B businesses these days is the value of a customer will accumulate over several months or years, as subscriptions continue or relationships grow.
Traditional analytics solutions deal with each of these processes; marketing, sales and customer lifecycle, in isolation. In reality, they all feed into the same system.
As such, most B2B companies employ a cost per lead metric in order to measure the impact of their marketing. Usually, it’s the easiest and most indicative measure of success they can access.
But a lead doesn’t finish its journey with the company there.
Those leads are then processed by the sales team via a CRM, eventually becoming won customers or dead deals. And once they’re a customer, they can generate revenue for the business for months, or years, into the future.
The latter part of this process is completely overlooked by most analytics tools. It’s all part of the same journey, but because B2B deals hardly ever close on the website (like an e-commerce deal), it used to be impossible, or very difficult, to report on the whole journey.
Then along came a company called Salesforce and changed everything.
Salesforce introduced the world to software-as-a-service (SaaS), cloud-based applications no longer confined to a user’s desktop hard-drive but is accessible by any computer with an internet connection.
Since then, thousands, if not millions, of pieces of software have now adopted the Internet as their chosen operating system.
As the software exists on the internet, that means that it can easily receive and deliver packets of data. Initially, this meant software updates could be delivered in real-time (an innovation in its own right), but it also meant that these different pieces of software could deliver data to each other.
It’s in this innovation which closed-loop reporting has become possible.
Now, instead of analytics ending at the point the person becomes a lead, the data from your marketing, sales and revenue platforms can all be shared with each other.
Analytics no longer has to treat each of the stages as unique now that their data can be combined.
Instead of focussing on metrics that don’t measure true business value (clicks, conversions and leads), closed-loop analytics allows you to look deeper into the customer acquisition and revenue generation funnel. It gives you the answer to questions such as:
- How much revenue was generated from customers acquired through marketing campaign/channel/medium X, Y, Z?
- Do leads from paid search close at a higher rate than leads from paid social traffic?
- Are we actually acquiring customers or poor quality leads?
This information can drastically transform how you look at performance.
The image above illustrates three types of lead that would all be reported exactly the same in Google Analytics: as an increment of 1 in the Goal Conversions column next to their respective channel.
The truth is, these 3 people have a completely different amount of potential to offer to your business.
Because closed-loop analytics can tie revenue back to your marketing channel, you can investigate which channels are driving real business value.
This method of reporting unmasks the truths behind your return on advertising spend. It allows you to ditch vanity metrics such as clicks and replace them with actionable KPIs such as revenue and customer lifetime value (CLV).
Those that have implemented closed-loop reporting already will have clear access to their best-performing ads, campaigns and marketing channels. Below is the exact diagram we use to demonstrate the process of closed-loop marketing:
Closed-loop reporting gives you the ability to make more informed decisions
Let’s say you determine, using closed-loop revenue data, that Facebook sends the most conversions to your site. in comparison, the leads seem cheaper to your other channels, but further analysis reveals that the conversions hardly ever close into won customers.
On the other hand, search sends fewer conversions and they’re more expensive on a cost-per-conversion. However, those conversions close into won customers, who deliver lots of revenue, at a very high rate.
Knowing this, you can make more strategic decisions. Maybe you don’t have the budget or personnel to focus on both social and search. And the outcomes have revealed that it’s better to focus on search because that’s where you’re driving the most revenue.
Revenue data reduces marketing costs
Closed-loop marketing shows you which campaigns and channels drive the most revenue, according to the revenue attribution model you use.
It also shows you which drive the least revenue.
In other words, revenue data shows you which of your efforts are generating a return on your investment and which are simply wasting your budget, providing the information you need to cut spending on underperforming campaigns.
This blog helps you understand how multi-channel methods of attribution enable you to see the value over all your channels, which can ensure budgets are allocated more fairly.
Revenue data accelerate sales opportunities
One customer of Ruler recently mentioned how they noticed something interesting through their closed loop analysis: one specific customer sector had an average lifetime value that was higher than any other.
If they hadn’t been measuring revenue metrics, the trend would have likely gone unnoticed. But since they did, they were able to act on it.
The client shifted all of their efforts to focus on that sector, and their monthly recurring revenue started growing immediately.
Revenue data not only told them which campaigns and channels were best; it also showed which customers benefited the most from their product.
The result of that one insight: the customer doubled their 2016 revenue in the first half of 2017 alone.
Closed-loop marketing data improves the user experience
Without knowing which customers convert, it’s very difficult to form a complete picture of your customer buying journey. You can make educated guesses or interview a handful of customers, but there’s no guarantee that what you come up with reflects the actual journey your customers take.
One of the best things about consolidated marketing and sales data is that you can see every single interaction customers had with your brand—from their first anonymous visit to the day they signed the check.
What campaigns did they interact with? What pages did they visit on your site? Did they request a demo, sign up for your newsletter, or visit your contact page and call?
Of course, you can do that without revenue data too, but only for the journey from being an anonymous visitor to becoming a known lead.
With closed-loop marketing, you can isolate that information down to only those individuals who became your most valuable customers, find consistencies in the journeys they took, and map out a new journey that guides prospects through an ideal experience.
Closed-loop marketing leads to better sales and marketing alignment
Sometimes, marketing and sales teams have an us-versus-them mentality. When sales are suffering, marketing blames sales, asserting that sales teams don’t know how to close deals.
Sales take the opposite approach, insisting that they can’t close deals because marketing keeps sending them low-quality leads.
This dynamic isn’t good for anyone.
But with CLM, marketing and sales teams form a partnership. Sales benefits because marketing’s data feeds into sales’ CRM, letting sales reps see what products, services, and features prospects are interested in.
This lets them craft more targeted and personalised sales pitches.
Marketing teams see which of their initiatives generate the most conversions and can use that information to send sales more qualified leads.
This means more commissions for sales teams, proving the value of collaborating with marketing.
Marketers not only get a strategic partner in sales, but also the data they need to prove that all of their hard work has a positive impact on the company’s bottom line.
Revenue is marketing’s most important metric
Since we’ve discovered the benefits of closed-loop marketing – and the means of tracking it with our analytics tool – we’ve focused much less on the awareness metrics we used to rely on. Revenue data has given us everything we need to grow our business and make strategic marketing decisions.
But this is just our experience, so it’s limited. We’re curious to know what benefits and disadvantages other marketers have experienced when tracking—or trying to track—marketing-generated revenue.
So, closed-loop marketing: is it the right approach or just another time-consuming report to build?
Is it the metric that will boost CEOs’ opinions of the discipline? If you’re a lover of CLM, like me, and have achieved positive results from this process, I’d love to hear about it. CLM is a valuable method of reporting, and it’s time we make more marketers aware of it.