One of the hardest concepts to grasp when it comes to marketing automation is the idea of “closed-loop” reporting. First of all, what does “closed-loop” even mean?

Here’s an easy way to look at it. Closed-loop reporting means that you can see where all of your best and worst leads come from using reporting and analytics. It allows you to tie a specific prospect to revenue by tracking them from an anonymous visitor on your site to an identified lead (and beyond). That way, you can credit leads to their original sources, whether they come through paid ads, email campaigns or other initiatives. That’s where the term “closed-loop” comes from.

Here’s a step-by-step breakdown of what closed-loop reporting looks like. Let’s use a new prospect named “Jane” as an example.

Step 1. Jane decides that she wants to look at marketing automation for her small company. She’s not sure where to start, so she checks out the websites of a few marketing automation companies that are on her radar. When she visits each of their websites, they place cookies on her browser, which track her activity from that point onward. Now, Jane is a cookied – but still anonymous – visitor to those sites.

Step 2. Let’s say Jane decides to look specifically at the Pardot website, which she reached through a paid search ad on google. She clicks through to the features page, makes a pit stop at the blog, and then visits the pricing page. Each of these activities is tracked using the cookie that was placed on her browser during her first visit. Although she is still only an anonymous visitor, her movements are still valuable and are recorded in the hope that she will convert to an identified lead.

Step 3. Jane’s interest in Pardot is peaked. She decides that she wants to request a demo of the product, so she fills out a form to sign up. The form captures information like her first and last name, her company, and her email address. At this point, Jane is converted to a lead. All of that information is now associated with the original cookie and is stored within Pardot’s marketing automation platform. Pardot can now tell which pages she’s visited and where she came from (paid search ad). This means that Jane will be recognized as “Jane” the next time she’s on Pardot’s site, rather than as an anonymous visitor.

Step 4. Jane is seriously considering investing in a marketing automation system. She visits Pardot’s website again and fills out another form to download a white paper. This action is tracked in real time so that a Pardot sales team member can reach out to her. When Jane finally decides to become a customer, the sales and marketing teams at Pardot can look back through her data, see that she originally came through a paid search ad, and credit the lead to that source. Using this technique, they can see where all of their leads are coming from and judge the ROI of each of their marketing initiatives.

Once all of these steps are completed, the “loop” is closed. Jane has made the journey from anonymous visitor to identified lead, providing trackable and valuable data along the way. Now, she’s ready to do some closed-loop reporting of her own using her new marketing automation system.

Interested in learning more about closed-loop reporting? Stay tuned for our Closed-Loop Reporting Quick Guide, coming soon!

Jenna Hanington

Posts Twitter