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Feedback Loops in Marketing – How to Get It Right

As you find ways to get your customer acquisition costs (CAC) low, you may try a lot of tactics to get it to work for you. One vital element is a feedback loop. It is used to take results from your existing process and improvise on the process elements with tweaks or major shifts to get a better outcome.

In marketing, feedback loops can make or break your future campaigns based on how you see your current results. Even if you have negative feedback, it can be used effectively, as we’ll see later in the article.

And once you recognize the types of feedback, try out a few tried and tested strategies, from tracking your KPIs to documentation for a fruitful outcome.

But first, let’s look at how feedback loops are essential in business.

What Are Feedback Loops & Why They Are Important

Feedback loops help you better your product or service offering. You could have a great product or service. But unless it is optimized to provide the best user experience, you may have a high bounce rate or poor conversions leading to higher Customer Acquisition Cost (CAC).

Traditionally, picking up cues from customer touchpoints – your social media, website, and online platforms can give you a fair idea of where you need to improve. Your metrics are another way to track this performance and make it a part of your feedback loop. Besides customer feedback, consider how your SEO and UX efforts need tweaking by looking at your sales numbers.

Sales-driven organizations typically receive explicit feedback from customers about what they like, and what they dislike. This is usually true with both B2B and B2C businesses. But if you are a marketing-driven function, or are completely online, then a lot of feedback you receive from customers is based on the action they take.

Why Feedback Loops Are Essential in Marketing

When you look at all your marketing efforts, feedback loops help you understand where you’re doing well and how you can improve the non-performing assets. Some benefits of the feedback loop include:

Learnings from Past Campaigns: Learnings from past campaigns should be used to tweak future campaign strategies. This way, you know which part of the campaign was planned well and must be corrected to avoid the same mistake.

Avoid The Same Mistakes: When you use the learnings from the past campaigns to prevent the same mistakes from happening twice, you’re protecting your finances, allowing your team to work productivity and position your campaigns for better ROI.

Get better ROI: Improve ROI by doing more of what works and less of what doesn’t work. This approach makes it easy to look back and pick insights for your feedback loop once the campaign is over. When you’re selecting insights, consider both the positive and negative feedback.

Types of Feedback Loop

There are two types of feedback loops – positive and negative. A positive feedback loop is about doing more of what works, whereas negative feedback identifies what causes the negative outcome and reduces its impact.

Positive Feedback Loop: Find positive outcomes and use them to do more of the same. For example, using CTAs that fetch higher conversions and using more of this CTA elsewhere can give you better results.

Negative Feedback Loop: Find negative outcomes and fix them for the future. Ignoring them could mean doing more of what doesn’t work and causing a probable negative financial impact. For example, identify causes of customer churn (price, UX) and fix them.

How to Get Feedback Loops Right

Identify your KPIs: Start with the feedback loop by identifying your main Key Performance Indicators (KPIs). It could be visitors, CTRs, Revenue, NPS, or churn, depending on where your business is at. Pick a few that need your immediate attention.

Cluster them by Triggers: Once you identify the main drivers, cluster them together based on the triggers. For example, you could cluster CTR and Revenue together since the same driver moves both. And so, if CTR increases, revenue also increases.

KPIs and NPS: Sometimes, the same KPIs may belong to multiple segments. For example – revenue is also possibly linked to Net Promoter Score (NPS). NPS checks for customer loyalty and the ability to influence others to try your business and convert. It adds to customer retention. So if NPS is higher, then people return, so revenue increases.

Document the performance: Ensure you document each step of the process to know which KPI is doing well and which isn’t. This way, when things move north, you know you need to do more of it. And you then need to re-look at the non-performing KPIs to identify the reasons for a less than satisfactory performance.

Track Customer Journey: Remember to track the customer journey for each KPI. Identify patterns in help desk support requests to see what’s disrupting your customer’s journey. This way, when things aren’t working, you know how to fix them at that stage. With this, you can identify the drivers causing each movement. If necessary, you may use A/B testing to test what is driving metrics up or down.

Test Hypothesis: Tweak the drivers like price and CTA button until you see some momentum. Keep tweaking it till you continue seeing positive or negative movement. For each cluster, make sure each of the different KPIs continues to move along expected lines. If any KPIs stop moving in the direction, they are intended to, stop tweaking and identify other parameters to test. Continue this process for each of the different drivers and metrics.

Final Thoughts

Feedback loops work as a good starting point to know how your business is growing and where it needs improvement. When it comes to marketing, use feedback loops to determine your customer experiences, SEO, and UX to know how well you connect with your audience. Accept positive and negative feedback to continue with what’s working and ignore the rest. For negative feedback, look at what can be improved and pick the KPIs that need a push.

Among other KPIs, also factor in what can work together so you can cluster them and monitor them regularly. Also, ensure you document all metrics to track them for progress or divergence from your goals. A/B test to see what works and test your hypothesis. When you see considerable momentum in one KPI, focus on others to replicate the impact to ensure a positive outcome and a higher ROI.

About Shane Avron

Shane Avron is a freelance writer, specializing in business, general management, enterprise software, and digital technologies. In addition to Flevy, Shane's articles have appeared in Huffington Post, Forbes Magazine, among other business journals.

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