What is Closed-Loop Marketing, Why is it Important and How to Get Started

Katie Holmes
Date Posted:
9th July 2021

Closed-loop marketing allows sales and marketing teams to collaborate on conversion and revenue data to determine which specific marketing activities are most effective in driving sales. For this article, we take a closer look at how closed-loop marketing works and show you how to successfully connect data from your marketing tools and CRM platform.

The following process is how most businesses expect marketing and sales teams to function:

1. Marketing to generate as many leads as possible

2. Leads to be passed onto sales to create opportunities that eventually turn into revenue

As simple as this may seem, this practice is outdated and can lead to friction between teams.

You’ll often find sales pointing the finger at marketing for sending mediocre leads that take up all their time. Marketing, however, will question whether sales are working hard enough to convert leads into sales.

If this all sounds familiar, you’re not alone. According to a study, only 17% of companies are believed to have completely aligned departments.

To make matters worse, misalignment of sales and marketing is costing companies an average of 10% of revenue per year. So, that’s a whopping 83% of companies missing out on significant growth.

So, what’s the solution?

One of the most effective ways to align the sales and marketing teams is by tying the marketing pipeline to sales goals.

And this is where closed-loop marketing steps up to the plate.

For this article, we’ll discuss:


What is closed-loop marketing?

💡 Pro tip: For a more in-depth explanation, we recommend that you download our comprehensive guide on closed-loop marketing.

Put simply, closed-loop marketing allows you to pinpoint the lead generation techniques that drive the most (and the least) revenue.

It is the process that connects your conversion and revenue data to calculate the exact return on investment of your campaigns and channels.

“Closing the loop” refers to connecting marketing with sales so that revenue is definitively and automatically matched to marketing activity to measure and optimise for better results.


Why is closed-loop marketing important?

For this section, we’re going to use an example to demonstrate just how essential closed-loop marketing is.

This is Ella, Head of Marketing at Blue Inc. Ella and her marketing team use Google Analytics to track traffic, form completions and referrals.

closed loop marketing - ella head of marketing - www.ruleranalaytics.com

This is Jamal, Head of Sales at Blue Inc. Jamal and his teams use Salesforce to track leads, conversions, repeat purchases and reactivations.

closed loop marketing - jamal head of sales - www.ruleranalaytics.com

Ella knows which traffic sources and landing pages drive the most leads and conversions.

And Jamal can see which leads made it to the buying stage and have gone on to make repeat purchases.

But neither Ella nor Jamal have the data to connect the top-of-the-funnel activity with bottom-of-the-funnel data.

Traditionally, sales and marketing are considered two separate functions. For most companies, the marketing funnel starts with the awareness stage and ends when visitors are converted into leads.

The sales funnel kicks in when the marketing funnel has done its job and ends when a prospect agrees to a deal or makes a sale.

Because these teams work in silos and focus on different stages of the funnel, data isn’t transferred between them.

As a result, sales teams don’t know what marketing activities generated their leads, and marketing doesn’t know what happens to leads once the sales team takes over.

closed loop marketing - funnel disconnected - www.ruleranalytics.com (1)

Since sales are only capable of tracking half of the customer journey, they lack insight into the quality and buying intent of leads that drop into the pipeline.

As a result, they end up wasting time and energy on opportunities that will never convert. In fact, when asked to list the main factors that affect the length of the sales cycle, our respondents ranked “having too many unqualified leads (46.3%)” the top answer.

The best sales can offer marketing is feedback on the quality of leads, and depending on whether they’ve had a good or bad month, it’ll likely be either “these leads are rubbish” or “these leads are great, keep them coming”.

This information, however, doesn’t provide marketing with much detail on what’s working and what isn’t.

Different channels, ads and campaigns all drive different kinds of customers and revenue per lead values. Without data on the tactics that drive the most revenue, marketing teams will typically fall back on lead volume metrics to optimise campaigns and budgets.

However, optimising for lead volume often results in lower contact rates and decreased ROI.

This is where closed-loop marketing steps in.

Closed-loop marketing creates a cycle of data between all your teams.

Sales can track marketing activity and lead source data.

Marketing, on the other hand, can attribute sales and optimise performance based on revenue instead of lead generation metrics.

It’s a win-win situation.


How does closed-loop marketing work?

So far, we’ve highlighted the disconnect between the sales and marketing funnel and provided you with a solution in the form of closed-loop marketing.

But how do you approach it?

Closed-loop marketing can be achieved using the four steps below:



Don’t forget, you can download the guide for a more in-depth look at closed-loop marketing.


What you need to know before you get started with closed-loop marketing

Closed-loop marketing does involve a lot of moving parts.

To implement closed-loop marketing yourself requires a lot of manual work, time, and not to mention buy-in from key stakeholders and co-workers.

Even after all that hard work, the data probably wouldn’t be very accurate, as you’ll likely miss out on key actions that occur offline.

Ecommerce sales, in particular, are a lot easier to follow if your Goals are set up correctly in Google Analytics. A little bit of code in your shopping cart and you can see which of your marketing channels are driving the most sales.

Offline interactions such as phone calls, however, are a lot more difficult and often impossible to track without the right processes in place.

Seeing how much work goes into setting up closed-loop marketing may have left you feeling a little apprehensive.

However, closed-loop marketing is absolutely necessary in order to demonstrate and improve your impact on bottom-line metrics.

In all honesty, the easiest way to guarantee a “closed-loop” is to let technology capture the information for you automatically.

And, this is where Ruler Analytics can help.

Ruler Analytics is a marketing attribution solution designed to close the loop between your sales and marketing data and provides a single source of truth on what’s working well and what isn’t.

Here’s how it works.

1. Anonymous visitors engage with marketing campaigns and ultimately land on your company website. Ruler recognises each anonymous lead as a unique prospect, records how that prospect found your site and tracks any subsequent visits to or interactions with other marketing channels and campaigns.

2. Eventually, some of those anonymous visitors provide information about themselves so that they’re no longer anonymous. They fill out a form, subscribe to your newsletter, or request a demo. Ruler updates the data it collected when the prospect was anonymous, creating a journey map for what is now a known prospect.

3. Some of those prospects become sales leads. When this happens, Ruler takes advantage of a pre-built integration to pass all marketing data to the sales team’s CRM, allowing salespeople to see what specific products, services, and/or features each prospect was interested in while interacting with your campaigns.

4. Some of those leads convert. When that happens, a pre-built integration passes real conversion and revenue data back to Ruler Analytics. Now, marketing teams can see revenue and conversion data alongside all of their traditional metrics. More importantly, a loop is formed between your sales and marketing teams, with minimal effort too!

Editor’s Note: Want to learn more about Ruler Analytics but not ready to book a demo? This guide explains what Ruler Analytics does and how it can help boost the quality of your marketing reports with closed-loop data.

Now that’s covered, let’s take a closer look at each step and alternative methods to approach closed loop marketing.


1. Capture website visitors on an individual level

In order to set up closed-loop marketing, you’ll need to find a way to track and measure how individual visitors behave on your website.

Tracking visitors this way will allow you to monitor and measure the movements of specific users and track cross-channel journeys more cohesively.

Most web analytics tools let you track traffic sources such as PPC and referral, but the data is anonymised and aggregated. In other words, it doesn’t allow you to focus on the specific steps of your unique website visitors.

To ensure the accurate deployment of closed-loop marketing and attribution of leads, you’ll need to go a step further.

One thing you can do is assign a tracking URL to any piece of content or marketing material that is directing traffic to your website. Google Analytics 4 uses first-party data and considers individual users who interact with your business—from the first visit to the point of conversion.

Related: 10 Things you need to know when switching from Universal Analytics to Google Analytics 4

To track every individual user in Google Analytics, you will need to implement a User_ID that consists of a set of alphanumeric characters. Again, this data is anonymised, so you can’t reveal the identity of a user behind the conversion.

A better option is to invest in a good customer journey analytics tool. Access to customer journey tracking will allow your sales and marketing people to map every touchpoint of a user across multiple channels and sessions before converting into a sale.

💡 Pro tip: Download the eBook and learn how to track your customer touchpoints, unlock valuable data across the entire buying cycle and gain key insights to make smarter budgetary decisions.

For example, Ruler Analytics tracks each anonymous visitor over multiple sessions, traffic sources and keywords. Once an anonymous visitor converts into a lead, Ruler Analytics matches the user’s details to their marketing touchpoints to create a journey.

Such connectivity “closes the loop” between all your departments.

There’s no more of marketing washing their hands at the handoff stage, and sales can no longer accuse the marketing team of sending second rate leads that don’t convert.

Instead, sales and marketing will unite as one, focused on driving the right type of leads that convert into customers quickly and effectively.


2. Store data from multiple sources in a single platform

Next, you’ll need to generate a centralised hub to store your leads and customer data along with the originating source. That way, your sales, marketing and customer success teams can all collaborate and gain a holistic view of the customer journey.

Many organisations opt for a customer relationship management (CRM) system since most allow you to integrate seamlessly with different applications and are fully customisable to suit your specific business goals.

To successfully close the loop, you’ll need to assign a lead source to each one of your records. Although seemingly straightforward, the process of tracking lead source in your CRM can be overwhelming and near impossible without the right systems in place.

That’s where tools like Ruler Analytics step up to the mark.

Ruler automatically sends lead source data to your CRM, along with 60 other variables. Such data equips your sales representatives with more intelligence about leads, and the loop between sales and marketing teams begins to close.

Related: How to track marketing lead source 


3. Share closed-loop data with the tools you use every day

Naturally, your leads will progress through the sales cycle, going from simple contact to a fully qualified sales opportunity. For some businesses, the sales process can stretch over a number of weeks and usually involves more touchpoints along the path to purchase.

Related: Track sales opportunities and prove your impact on ROI

In fact, according to a survey, we recently found that 52.3% of companies endure sales cycles lasting between one to three months, while 18.8% have sales cycles greater than four months.

closed loop marketing - sales cycle length - www.ruleranalytics.com

With that in mind, it’s helpful to know where your leads are at the various stages of the sales cycle so that you can plan and optimise your marketing well in advance.

Such intelligence will help you pinpoint the channels that have the highest lead to opportunity rates.

You can allocate budgets more wisely to accelerate customer acquisition and retention.

Here is a screenshot of Ruler Analytics, providing us with key information at different stages of the sales pipeline. As you can see in the example, Google Ads is responsible for driving £28,295 to the proposal stage, whereas Google Organic has only added £7,695.

closed loop marketing - opportunity report - www.ruleranalytics.com

Based on this data, you could potentially allocate more spend to Google Ads and ensure that there are enough leads entering the pipeline for sales to close into revenue.


4. Lead closes into a deal, revenue is attributed to the original source…

…and the loop is finally closed.

When an opportunity eventually converts into a sale, the revenue data is passed back to the marketing team. This brings a couple of benefits.

First, it allows marketing teams to build reports showing exact values for marketing-generated revenue. Second, this data helps marketers identify which campaigns and channels are the most effective at generating revenue and driving growth.

This lets marketers optimise their efforts by focusing their time and budget on the channels that deliver the highest ROI.

At Ruler, we use our platform and ChartMogul to track and report on monthly and annual recurring revenue driven by our marketing activities.

In ChartMogul, we’ve set up custom fields, and marketing source data is passed from our closed-loop platform and CRM. This seamless integration allows us to visualise and analyse our monthly and annual recurring revenue segmented by lead source. We can also measure:


Benefits of closed-loop marketing reporting

By switching from traditional marketing measurement to closed-loop reporting, you can enjoy the following key benefits:


Need help getting started with closed-loop marketing?

Closed-loop marketing allows you to focus on the channels and campaigns that matter most to your business. When you know what lead sources drive the most revenue, you can stop wasting efforts on those that don’t perform as well.

Keeping your cost per lead as low as possible while boosting your bottom line!

Using tools like Ruler Analytics, closed-loop marketing is something that modern-day companies can take full advantage of to help solve the disconnect between sales and marketing, improve customer acquisition and prove marketing’s impact on revenue growth.

If you want to see the closed-loop marketing attribution model in action, then book a demo today. Our experts will run you through how the platform works, and how you can use it to prove your marketing ROI and optimise your marketing efforts.