Ask three different people to define closed loop customer relationship management—or closed loop CRM—and you’ll get three different answers. But what they’ll all have in common is the notion that a company’s interactions with customers and potential customers should be based on the most complete picture possible. Traditional CRM systems provide a database of customer information that can be used to, among other things, ensure customers are contacted with appropriate product updates, analyze marketing campaigns, and plan routes for sales calls. Closed loop CRM provides a more complete picture by drawing data from multiple internal or external systems, including a company’s Web page, and using that data to continually refine best practices for virtually any customer interaction.
 
“Closed loop CRM is about establishing a 360-degree view of the customer, regardless of the point of interaction,” explains Kent Whitworth, CRM practice leader for Minneapolis-based Ambient Consulting. “The knowledge gained at any point of interaction can be leveraged across the enterprise.”
 
Integrating customer data received through a company’s Web page with traditional CRM can be especially powerful, says Matthew Meents, CEO of Reside, a Web services and interactive firm in Minneapolis. “Closed loop CRM is about growth through the Web,” he says. “It’s about more transactions, more customers, and higher average transactions, and measuring how people are tracking to your brand. It’s about sales through lead generation and increasing sales on line.”
 
Meents cites the results of a survey from Boston-based technology research firm Aberdeen Group that demonstrates the power of closed loop CRM. Companies that integrated CRM with their Web marketing saw a 36 percent increase year-over-year in revenues, and 26 percent of those companies saw an average increase in return on marketing during the same period.
 
 
Success Stories
 

A Twin Cities–area high-tech manufacturer enlisted Einsof, a software developer based in Plymouth, to implement a sales portal and e-mail marketing engine based on the concepts of closed loop CRM. As a result, the client attained its best revenue quarter in its 10-year history.
 
As Einsof CEO Kim Albee explains, the client sells its product through partners and wanted to be closer to end users. “One of the issues was that partners were working deals, and it’s hard to forecast when you don’t know the deal flow,” Albee says.
 
The manufacturer put together an incentive program to encourage salespeople at partner organizations to enter data about sales prospects into the manufacturer’s Web page. “The first salesperson to identify a sales opportunity got discounted pricing and got the focused resources of the company to help close the deal,” Albee says. “Other people could work on the same deal but didn’t get the focused resources or the discount.”
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