What is closed-loop marketing?
Closed-loop marketing is a marketing strategy that combines operational and analytical customer relationship management. Ideally, this creates a closed loop from product development to marketing. Closed-loop marketing is therefore often referred to as a form of relationship marketing. The goal of this relationship marketing is to create interfaces for cross-departmental work.
How does closed-loop marketing work?
First of all, one collects the contact data of customers via different channels. These include direct marketing, telemarketing, sales, and service. The collected contact data (operational CRM) is then evaluated in analytical CRM. Here, one tries to understand and categorize the wishes, requirements and reactions of the customers. Ideally, this analysis provides new insights that can be applied in different areas of the company, such as development or product management, in order to eliminate existing errors and improve the product in the long term.
What are the advantages and disadvantages of closed-loop marketing?
The biggest advantage of closed-loop marketing is that it takes into account what the customer wants. The product is perfectly tailored to the respective consumer, from development to price and service. This increases both customer satisfaction and general sales. In addition, you can use social media platforms to get feedback directly from your own clientele.
However, there are of course a few disadvantages to this marketing strategy. For example, customers’ wishes are not always the same, so in practice a product can never fulfill the wishes of all customers. Especially if customers have strongly conflicting ideas, it can be disastrous for the company to try to make all customers happy.
