How Closed-Loop Marketing Works

This article is an adapted excerpt from our free ebook, An Introduction to Closed-Loop Marketing. To learn more about how to use closed-loop reporting  to improve your marketing, download the complete ebook here.

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Almost a century after John Wanamaker spoke those words, most online marketers can still feel his pain. The irony is, today, marketers have the technology they need to “close the loop” between marketing and revenue, but few are actually taking advantage of it.

Closed-loop marketing is marketing that relies on data and insights from closed-loop reporting. “Closing the loop” just means that sales teams report to Marketing about what happened to the leads that they received, which helps Marketing understands their best and worst lead sources.

To many, setting up closed-loop reporting has remained too hard and confusing to implement. To be an effective marketer, however, you need to be able to tie every single lead, customer, and dollar back to the marketing initiative that created them. This is how marketers can prove their worth and understand how to more efficiently reach their audience.

But how exactly does closed-loop marketing work, and what tools to you need to implement it? Let's find out!

The 4 Steps of Closed-Loop Marketing

Closed-loop marketing can essentially be boiled down to four steps. Before we explain each step in detail, let's take a look at how the process looks as a whole:

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