To make money, the vast majority of businesses need to sell their products or services to paying customers — that much is common knowledge.
However, what is not common knowledge is exactly how businesses find new customers. This is where lead management comes in, as it is a crucial part of any effective business strategy.
In this article, we’ll explain:
- What lead management is,
- Why it’s important,
- What its core principles are, and
- What major steps it usually consists of.
We’ll also provide some tips for better lead management.
So, without further ado, let’s get started!
Table of Contents
What is lead management?
The term “lead management” refers to a variety of processes that involve:
- Identifying potential customers,
- Analyzing their behavior, and
- Determining which leads are most likely to become paying customers.
In this context, a lead is defined as any individual or business that might be interested in purchasing a given business’s product or service.
Why is lead management important?
Any company that wishes to grow and prosper needs to allocate its resources efficiently, especially given that marketing accounts for an average of 10.6% of a company’s budget, according to the Fall 2023 CMO Survey.
And lead management is important because it provides just that — efficiency.
With a good lead management strategy, a business can get the biggest return on its marketing and sales investments. This is achieved by focusing on converting leads that are more likely to make purchases and become repeat customers, as opposed to just casting the widest net possible.
What is a lead management example?
For the broad strokes of what lead management looks like in practice, let’s take retail as a general example.
To attract potential customers, a store might invest in online pay-per-view advertising, showing their ads to a select customer base who might be interested in purchasing their products.
Next, any leads who click the ads would be taken to the retailer’s website, where they would be prompted to register an account upon landing on the site, or at checkout. Even if the individual doesn’t purchase anything immediately, they still agree to share their data with the company by registering on the site.
Once the company has said data, the marketing department can analyze the lead’s shopping habits to determine when the person is more likely to make purchases, as well as what they might be interested in.
On top of that, the company is free to reach out to the lead in a variety of ways, such as:
- Promotional newsletters,
- Email marketing campaigns,
- Discount coupons,
- Social media outreach, or
- Promotional and sales phone calls.
Furthermore, the business might also invest in reliable retail management software in order to make the entire process more efficient and convenient for everyone involved.
Overall, what’s most important is that this allows the retailer to continuously collect data and maintain contact with the lead in the long term. That way, even if the potential customer is not converted immediately, they might still become paying customers further down the line.
Sales management software
Manage leads and track the customer onboarding cycle — with Plaky.
What are the core principles of lead management?
With the basic definitions out of the way, it’s time to take a look at the most important principles that you should always keep in mind when devising a lead management strategy.
In short, the core principles of lead management are:
- Collection and analysis of quality data,
- Knowing your ideal customer,
- Lead scoring and qualification, and
- Long-term planning and nurturing.
Let’s take a look at each in more detail.
Principle #1: Collection and analysis of quality data
When it comes to modern marketing, data is king. Any kind of lead management strategy is guaranteed to fail if you don’t have quality data on your leads and don’t understand your potential customers.
Data relevant to lead management involves a wide range of information that can vary based on the nature of a business, but it involves everything from a lead’s basic information to advanced metrics that describe their purchasing behavior.
💡 Plaky Pro Tip
Lead tracking is the process of keeping a close eye on potential leads, analyzing their preferences, and collecting lead data. Learn how to optimize your lead tracking process in the post below:
Principle #2: Knowing your ideal customer
With the above in mind, for marketing and sales efforts to also be cost-effective, it’s crucial to know who your ideal customer is.
This means constructing an Ideal Customer Profile, or ICP for short.
In general, an ICP will contain a wide range of data, including:
- Basic personal or business information,
- Contact details for all possible channels,
- Engagement data,
- Miscellaneous KPIs,
- Complete lead relationship history, and
- Ongoing lead status.
All of this data comes together to form a blueprint for what leads should be the primary target of your marketing and sales efforts.
By focusing on leads that fit the ICP, you can rest assured that your marketing and sales are allocated in the best way possible, maximizing the return on your investment.
Principle #3: Lead scoring and qualification
A major reason for the ongoing collection and analysis of data relevant to lead management is lead scoring and qualification.
Essentially, businesses use the gathered data to analyze a lead’s behavior and assign a score. This score takes into account a variety of relevant factors that determine how likely it is for a given lead to be converted.
Using said score, leads can generally be sorted into 2 categories:
- Sales qualified leads (SQLs) and
- Marketing qualified leads (MQLs).
Sales qualified leads are those determined to be more likely to make a purchase and are handled by the sales team.
Marketing qualified leads are determined as less likely to make a purchase and are handled by the marketing team and nurtured further — which brings us to the next principle.
Principle #4: Long-term planning and nurturing
As the well-known idiom states, “slow and steady wins the race,” and it holds very true when it comes to lead management.
While some leads will convert quickly with little effort, others need to be nurtured for a period of time before they are converted. Moreover, even the leads who convert quickly might be turned from one-time customers to returning customers through nurturing.
That said, for any lead management strategy to yield maximum results, it’s necessary to remain consistent and persistent over a long period of time. This can be quite resource-intensive, but if done right, it will more than pay off.
What are the 5 major steps of lead management?
Lead management is a complex process, and like any other, it consists of several distinct steps.
Naturally, marketing and sales are not an exact science, so the exact number of steps may vary based on the nature of the business, the industry it operates in, or depending on how the professionals in charge of lead management choose to structure their strategy.
However, generally speaking, lead management can be boiled down to 5 key steps:
- Generating leads,
- Capturing leads,
- Qualifying leads,
- Distributing leads, and
- Nurturing leads.
We’ll go over each step in more detail below.
Step #1: Generate leads
The very first step in any lead management strategy is generating leads, i.e., identifying and attracting the attention of potential customers.
Today, businesses generate leads in a number of ways, including:
- Email marketing campaigns,
- Pay-per-view ads,
- Content marketing,
- Social media marketing,
- Cold calling, and more.
Step #2: Capture leads
Next, a business has to capture the lead. Despite what the term may suggest, this is not the step when a lead becomes a customer. Rather, it refers to obtaining a lead’s information in order to keep them engaged and open to future marketing efforts.
At its core, lead capturing involves obtaining, retaining, and organizing contact information, such as email addresses and/or phone numbers by using a CRM template.
Step #3: Qualify leads
After a lead has been captured, the next step in the process is to collect behavioral data over a period of time in order to qualify leads.
By tracking and analyzing a lead’s behavior, a business’ marketing team can determine the best and most cost-effective methods to engage the lead further.
More importantly, this step is where the team can determine whether a lead is worth pursuing at all, based on the cost of advertising compared to the likelihood of the lead converting.
Step #4: Distribute leads
After they are qualified, leads are distributed to their relevant teams. As mentioned above, sales qualified leads are assigned to the sales team, and marketing qualified leads are retained by the marketing team.
To illustrate the importance of timely lead distribution, here’s what Vincent Burruano — a sales professional with over 30 years of experience — had to say on the subject:
“The most important element of a comprehensive lead strategy is to ensure the leads you generate are quickly and appropriately pursued. Too often leads go stale because it takes too long to route them to the correct sales professional, or because your sales team is not engaging the leads with a sense of urgency these leads deserve. It is not simply the time to make the first call that is important, but the diligence to follow up until you speak with someone directly to understand their interest and qualify the opportunity.”
With that in mind, he further emphasized the importance of acting on leads quickly:
“You need to ensure leads are promptly sent to sales professionals who want to pursue these opportunities and will exert the effort and the appropriate techniques to reach the prospect and engage in a meaningful conversation. If they determine this isn’t the appropriate time, then care needs to be taken to track the effort and identify when the prospect should be contacted and log that information into a CRM system. Too many opportunities are lost to inaction or poorly executed lead management practices.”
Step #5: Nurture leads
Often, converting leads requires businesses to play the long game. Just because a potential customer isn’t likely to buy now doesn’t mean they won’t be likely to buy further down the line when their situation changes.
In essence, nurturing a lead comes down to investing in ongoing efforts to engage them based on collected data, such as by:
- Continuously collecting fresh data,
- Monitoring lead behavior, and
- Engaging via email and social media.
Regardless of the exact means and methods used, lead nurturing has a very simple goal — make sure the lead doesn’t forget about your product and ensure they buy it whenever they are ready.
Sales management software
Manage leads and track the customer onboarding cycle — with Plaky.
How to manage leads — additional tips
With all of the above in mind, here are some concrete tips you should keep in mind if you wish to implement an effective lead management strategy.
Tip #1: Continuously collect and analyze data
Data is the cornerstone of any lead management strategy, so it’s important to make sure the data you collect on your leads is:
- Accurate,
- Up to date, and
- Continuously analyzed.
Using stale or otherwise inaccurate data can easily make your strategy go off course and lead to a loss of otherwise viable leads, leading to financial losses that could add up over time.
Tip #2: Monitor and adapt your strategy
Lead management is an ongoing process that’s affected by a wide variety of factors. As such, no lead management strategy is going to be effective forever.
That said, for your lead management strategy to remain effective, it must be monitored as time goes on using whatever KPIs you determine to be the most important.
Furthermore, even if your strategy is yielding good results and achieving projected goals, there could still be things that could be improved to make it even more effective.
Tip #3: Improve customer experience
Regardless of how customers interact with your business, it’s crucial to consider the all-important factor which is customer experience, as it could be the deciding factor in converting a lead.
You’ll want to establish an overall positive customer experience for all existing and potential customers, regardless of what channels you’re interacting with them through.
To list just a few examples:
- Your website should be clean, intuitive, and easy to use.
- Your sales team should be polite and not overly aggressive.
- Your ads should be memorable, but not overly intrusive.
Tip #4: Consider every step of the customer journey
Tying into the importance of customer experience, it’s also vital to consider the overall customer journey — the summation of a lead’s or customer’s complete experience interacting with your company and brand.
We reached out to Amanda Sexton, the founder of the FocusWorks marketing agency and a marketing professional with over 15 years of experience, who actually considers this to be the most important step in a lead management strategy:
“In my experience leading FocusWorks, for me, the most crucial part of a lead management strategy is understanding and nurturing the lead’s journey — every touchpoint matters, from when someone engages with your brand to when they convert into a customer. In order to excel, marketers must identify where a lead is in their decision-making process and deliver relevant, timely content that moves them closer to a purchasing decision. This approach necessitates a blend of data-driven insights and empathetic communication. Remember, it’s not just about managing leads; it’s about understanding their needs and building relationships.”
Tip #5: Ensure efficient communication between marketing and sales
Smooth communication and collaboration are never easy in larger organizations, especially when multiple departments are involved.
However, when it comes to lead management, it is absolutely essential since the marketing and sales teams have to work together for any lead management strategy to work.
Some of the things that can be done to achieve this are:
- Regular meetings between team leads,
- Constant exchange of information pertaining to lead management,
- Efficient integration of software used by both departments, and
- Team building efforts to foster cooperation and teamwork.
💡 Plaky Pro Tip
If you’d like to read more about project management in marketing, we highly recommend checking out the following guide:
Tip #6: Consider a professional consultant
If you find that your sales are falling, your lead management strategy isn’t bearing much fruit, and your in-house team is struggling to bring things back on track — it might be a good idea to consider hiring a consultant.
Industry professionals can share valuable insights that could make all the difference for your company. And finding them is easier than it might seem — it could be as simple as word of mouth or a quick internet search.
Whatever the case, the main factor to keep in mind is that the potential consultant needs to have proven experience in their industry. And if they have experience working as a consultant with positive testimonials and references, all the better.
How to use Plaky for lead management
When talking about lead management software, people usually refer to CRM software, as it has the bulk of the functionalities companies need for effective lead management.
Usually, CRM software includes the following features:
- Collecting, storing, and organizing lead and customer data,
- Managing communication with clients,
- Comprehensive analytics,
- Automation features for streamlining workflows,
- Integrations with other important apps, and more.
That said, the best CRM tools offer a wide range of functionality that can greatly help businesses improve their lead management.
Furthermore, another integral part of efficient lead management is project management software for sales and marketing, which provides an additional set of functionalities that make it an indispensable part of internal team organization.
Taking Plaky as the perfect example, it allows you to:
- Create spaces and projects,
- Cycle through multiple view modes,
- Create highly customizable tasks within said projects,
- Share files and communicate with team members,
- Track activity within the space, and more.
All of these features (and more) come together to greatly facilitate project collaboration within and between teams — and, as mentioned above, lead management inherently involves both marketing and sales departments.
To optimize your lead management efforts, you might want to use a simple and intuitive tool like Plaky. Sign up for Plaky’s free account today, make use of the free sales templates, and improve your sales pipeline.
