The age-old question “What is my marketing worth to my business?” This question gets answered many ways. Some agencies might tell you it’s worth the number of clicks you received to a specific landing page. Others may say it was the number of engagements and total shares on a social media post. An email marketer might tell you it is the open rate of a campaign and associated click-through percentage. All of these answers are correct, but they are not necessarily useful to the business. All of the aforementioned metrics are excellent at explaining part of a story. They showcase pieces of performance drive value at the campaign level or interaction level. What they can not do is explain what the sum of all your marketing efforts is actually worth to the business.
It is important to note that not every marketer or agency can design or implement a closed-loop reporting system. This type of reporting system requires a team of data architects to implement correctly. More importantly, the marketer requires access to the following types of data:
A customer enters the marketing workflow in any number of ways. Purchasing an item online may place them in a re-engagement workflow to determine if they had a good experience with the product. A customer might start scheduling service, and then get distracted and walk away from their computer. In this scenario, the customer would be placed in an “abandoned appointment” campaign. Other customers may be due for regular maintenance and their vehicles’ teleservice system triggers their entry into a marketing campaign. The important element here is that we know who the customer is and why they were entered into a specific workflow scenario.
After the customer enters the marketing workflow, it is inevitable that they will eventually engage with marketing content. This marketing content most likely points them to a website or landing page designed to convert the customer. At this point in time: we know the unique ID of the customer and we know the marketing pieces they engaged with.
The appointment interaction is the lynchpin connection obscured marketing data to real-time transactional data. This is where the loop is closed. Remember the unique ID that was generated when the customer first entered the marketing workflow? This ID is now passed back into the system and used to “close the loop.” It connects the marketing source to the engagement interactions along the way, to the appointment interaction, and back to the original source.
If you are thinking, this is a lot of work just to connect two pieces of information, you’re right. However, once those pieces of information are connected, the benefits far outweigh the time investment. In fact, “closing the loop” on reporting can illuminate areas of your business where you are bleeding marketing dollars, need improvement, or be used to re-engage lost customers. Let’s discuss the main benefits, first.
In the recent past, it was rather difficult to connect a purchase to a marketing piece. Most of the data was structured in a way that allowed a marketer to loosely say “This TV ad results in 100 purchases.” One major benefit of closed-loop reporting is understanding customer-intent; in other words, (1) Who the Customer is, and (2) What drove the customer to make a purchase. Using a closed-loop reporting system in marketing is extremely valuable, because the lead or conversion can be 100% attributed to the result of a marketing campaign.
Another main benefit of closed-loop reporting is getting a highly accurate cost to acquire or reactivate customers. Let’s take a common scenario. You are running two campaigns. One campaign costs $500 and gets 500 clicks a month. The other campaign is a boosted social post. It only costs $5 but only gets 40 clicks. How do you gauge which campaign is more successful? Without a closed-loop reporting system, you really can’t. A closed-loop reporting system might tell you the campaign you are putting $500 behind only converts 2 new customers, whereas the boosted social post actually converted 20 new customers! The cost to acquire a customer in the highly trafficked campaign is $150 per customer vs $0.25 per customer. It becomes very clear where to redirect advertising budget when the “loop is closed.”
How many clicks does it take to convert a new customer? Some customers will convert after seeing an ad once or twice, others may engage with 15 different advertising pieces before converting. Remember, not all customers are tech savvy consumers living in Elon Musk’s future. Some customers still clip coupons and call their friends using a landline. Tech-novice consumers often require more marketing interactions to convert when compared to their tech-savvy counterparts. Using closed-loop reporting to understand marketing interactions means better segmenting customers by those that require more marketing to convert versus customers types that typically convert after only a few interactions.
Reach out and we’ll show you how. It’s easier than you think.