Are You Closing the Loop on Your Marketing Campaigns?
Do you know how many of your leads this month came from SEO efforts? Can you isolate the number of sales driven by your email campaigns? Do you know how much revenue was generated by your marketing dollars that went out the door last quarter? If you’re struggling to answer questions like these, then you’re likely not effectively closing the loop on all of your marketing campaigns.
In this article, I’ll cover what it means to close the loop on your campaigns and how it’ll help you to effectively allocate your marketing budget. Also, I’ll give you some tips on how to actually implement tracking for a variety of campaigns (both online and offline). Ok, let’s do this.
What is “closing the loop?”
Closing the loop is essentially ensuring that you’re not only able to track the source of your visitors, but also able to identify whether they ultimately perform your desired action (e.g. lead, purchase, install, etc.). Out of the box, many analytics programs are pretty good at tracking traffic sources, but (without some customization) they fall well short on closing the loop on conversions.
Why is it important?
Having a 360-degree view of your campaigns is essential to understanding where your most (and least) productive users/customers are coming from. I’d lump this into the “Marketing 101” category, but it’s surprising how many companies (both startups and established orgs) don’t know which sources are responsible for driving their conversions and revenue.
- Return on Investment (ROI): if you can’t track which campaigns directly (and even indirectly) impact revenue, then you won’t be able to calculate the ROI of your marketing spend effectively.
- Customer Lifetime Value (LTV): if you don’t log the acquisition campaign source of your customers, you won’t be able to calculate LTV (by source) in the future.
Why is tracking ROI and LTV (by source) so important? Well, many of your marketing initiatives aren’t going to yield productive, long-term customers (esp. in the early days). So, if you’re unable to monitor ROI/LTV by source, you’ll ultimately end up with inefficiencies. Spending your marketing budget like this is akin to “flying blind.” When you fly blind, you squander budget on poorly converting channels (and low-value customers) at the expense of being able to maximize your most efficient campaigns. Don’t fly blind please. Thanks.
How do you close the loop?
At the most basic level, you can begin to close the loop by setting up some standard goals in your web analytics program and then progressing from there. FYI, I’m using Google Analytics (GA) as a reference in my examples since it’s free and has such wide adoption, but many other analytics programs have similar functionality (although it may not be as easy to execute).
Here are a few ways to leverage web analytics and your database/CRM to close the loop on your campaigns:
1. Setup Goals in Google Analytics
Google Analytics goals allow you to track when users complete a desired action like making a purchase or submitting a lead form. For common conversion goals (i.e. lead/purchase), you typically track these by specifying a URL in Google Analytics which signifies that a user reached the goal destination. Typically, this would be a lead form submit confirmation or post-purchase “thank you” page URL (i.e. a URL that a user only will see after they’ve completed a desired action).*
*Pro tip: add a noindex tag (https://support.google.com/webmasters/answer/93710?hl=en) to your thank you page so it doesn’t get indexed by search engines. Otherwise, users may find your thank you page in Google, enter your site via that URL, and artificially inflate your goal tracking in GA.
Google Analytics also allows you to track “duration” goals (i.e. user stayed on your site for “X” minutes) and pageview goals (i.e. user viewed “X” pages during their session). These softer goals are good ways to monitor and benchmark user engagement.
It’s worth noting that setting up standard goals in GA only tells you if users are completing certain actions. You’ll still be in the dark on where some of your traffic is actually originating from (esp. if you’re running campaigns via 3rd party networks or email). This leads us to item #2 where you can actually instruct GA to tag your traffic and bucket it into specific categories (e.g. source, medium, campaign, etc.) in your reports.
2. Add Custom Campaign Parameters to URLs
Custom campaign parameters are useful for tracking any type of link placement that you control* such as: links in email newsletters, banner ad links, links in social media posts, etc. By placing custom campaign parameters in your URLs, you instruct Google Analytics to aggregate stats together for your entire campaign.
For example, let’s say you’re running a Black Friday promotion where you’ll be sending email promos to your customers, posting links on Facebook, Tweeting, and running banner ads on a partner site. If you add campaign parameters (i.e. utm_campaign=black-friday) to each URL you use, GA will aggregate all of your Black Friday traffic together. Then, you can also dig deeper to see which Source (e.g. Facebook, Twitter, Partner Site, etc.) or Medium (e.g. Social, Email, Banners, etc.) drove the strongest results.
Adding GA tracking parameters to your URLs is relatively simple, and Google even has a URL Builder that generates a custom-coded URL for you once your fill in the appropriate fields. FYI, custom tracking can also be used for mobile-specific campaigns and there is a Google Play URL Builder which is very helpful for this.
*Pro Tip: Google Analytics parameters are case sensitive, so utm_campaign=black-friday is different from utm_campaign=Black-Friday. It’s very easy to forget the exact formatting you used on your previous campaigns, so I like to build all my tracking URLs with a custom Excel sheet. This way, you eliminate naming & case sensitivity issues, and ensure that all your stats hit the right buckets.
3. Database & CRM Tracking
Tracking goals and traffic sources in your web analytics program is a great first step. However, in order to fully close the loop you also need to pass this data into your customer database or CRM software. Why is this important? Well, tracking source/campaign data with web analytics alone will tell you where your initial acquisitions or purchases originated. However, when it comes time to track recurring revenue and customer LTV, you’re going be stuck unless acquisition source data is also appended to each customer profile in your database.
There are tons of different CRM software companies out there (e.g. SalesForce, NetSuite, SugarCRM, Zoho, etc.). And, if you’re working at a startup, odds are you might have a homegrown customer database. So, it’s beyond the scope of this post to try and cover data integration with each one. The important thing here is to make sure your Marketing, Sales, & Engineering teams are all working together to effectively track customers through every step of the funnel.
4. Phone Tracking
According to a Google study, 70% of all mobile searchers have called a business directly from search ads. In the digital world we live in, it’s very easy to forget that some people still convert over the phone (depending upon your industry). If phone calls account for a significant portion of your sales (or assists), you need to pull them into the tracking loop as well.
Google Adwords now offers phone conversion tracking which will insert dynamically generated, trackable phone numbers into your web pages after a user clicks a Google ad and visits your site. There are also several other companies that offer dynamic phone number capabilities to track calls from web, TV, radio, and direct mail campaigns. So, make sure you’re measuring calls (if appropriate) to determine their impact on conversions and revenue.
What about 3rd party tracking scripts/pixels (e.g. Facebook, Adwords, ad networks, etc.)?
Nearly every ad provider these days has their own tracking script that they want you to integrate into your site. However, adding more tracking scripts often absorbs IT resources and can potentially slow down your pages. So, how do you decide which tracking scripts you need and which ones you don’t?
My general rule of thumb is to add tracking scripts only if they add value to your campaigns. For example, if an ad network’s tracking script is simply going to show you conversion numbers (and you can already track that with GA & your own database) I wouldn’t implement it. However, if that ad network’s script is going to optimize your ads in real-time (i.e. only show the best converting banners to reduce your CPA), then it may be worth taking the extra time to implement. I typically like to run small campaign tests with potential partners to see if they’re “pixel/script-worthy.” Otherwise, you can waste time upfront implementing detailed tracking on campaigns that flop.*
*Pro tip: if you work in a larger/slower organization where it’s tough to get new pixels or tracking scripts added to your pages, you might try pushing Google Tag Manager. Once implemented, Google Tag Manager allows Marketers to add/remove tracking scripts from web pages without any help from IT.
Offline Conversion Tracking
If you’re running online marketing campaigns, but also generating offline conversions, then closing the loop is going to be a bit more complex for you (though not impossible). The current version of Google Analytics supports offline conversion tracking by allowing you to capture a unique user ID from online activity, and then uploading relevant info to GA later if a conversion is made offline. Here’s a good overview of tracking offline conversions with Universal Analytics.*
*Pro tip: keep in mind that “offline conversions” doesn’t necessary mean that the conversion needs to take place in a retail store or brick and mortar setting. I previously worked for a company that had a desktop application where users could purchase items. Unfortunately, we couldn’t fire GA scripts (or sniff URL tracking params) from inside the application, so leveraging offline conversion tracking (in this case Google Adwords offline conversion tracking) really helped us dial in the true value of our Adwords campaigns. So, think creatively if you’ve got conversions taking place outside of the web browser.
When NOT to close the loop
It’s pretty rare, but there may be a time where NOT closing the loop is actually a good thing. For example, a previous startup I was at had a MVP that only targeted desktop computer users. Unfortunately, Google Adwords doesn’t allow you to specifically target desktop computer users anymore (you can only target desktop AND tablet users at the same time). In our case, we didn’t want to pay for tablet user clicks from Adwords because we didn’t have a compatible app for tablets. It was a very crappy user experience (and we had to pay for the clicks). What to do?
Since we were using the Google Adwords conversion tracking script, along with Google Adwords conversion optimizer, we decided to sniff the user’s device when they entered the site via Adwords and never fire the Google Adwords conversion tracking script if a tablet user tried to download the product. Since Google Conversion Optimizer takes device into account when evaluating traffic performance, and since it “appeared” that tablet visitors never converted for us, Google ultimately cycled tablet traffic out of our campaign and gave us (primarily) the desktop users we were focused on. This ultimately resulted in lower CPAs for the campaign as well as a much better user experience.
So, this is obviously a pretty rare situation, but I figured it was worth throwing out there as another reminder to think outside the box to find creative solutions to your marketing challenges.
If you’re unable to link your new customers to specific acquisition sources (e.g. Adwords, email, display, SEO), then you’re going to have a really hard time managing your marketing budget efficiently. Closing the loop on all of your campaigns will allow you to see which sources are driving true, high-value users and which sources are unprofitable over the long term. Once you’re armed with this data, you can double-down on your top sources and trim back (or eliminate) the under-performers.
Closing the loop effectively requires close attention to detail (esp. in a world where users are leveraging multiple screens). Thankfully, as users have begun to move faster, web analytics and CRM software companies have made big pushes to catch up with them. By leveraging many of the recommendations mentioned above, you should be able to close the loop on the majority of your campaigns and significantly improve your efficiency.
Got additional tips for how you’ve creatively closed the loop on your marketing campaigns? Please share in the comments below.