What Is Lead Management? Exploring Effective Strategies, Tools, And Best Practices

What is lead management?

The lead management process involves a series of techniques to attract, identify, and engage potential buyers. It guides them along the sales funnel until they turn into paying customers.

Lead management techniques help capture high-quality leads from multiple channels, qualify them, and nurture relationships with them. 

Lead management streamlines sales processes by identifying customers’ pain points and customizing their product features and campaigns accordingly. 

Some of the most important lead management components include: 

• Lead scoring

• Lead nurturing 

• Lead segmentation 

• Lead qualification, and 

• Lead tracking and analytics

Why Is lead management important?

Lead management supports your business process from start to finish and speeds up the sales cycle. Most importantly, lead management enhances the personalization experience by understanding the customer's pain points. 

This personalization helps your business by reducing the acquisition cost by up to 50% and boosting the market ROI by 30%, according to McKinsey.

Effective lead management identifies where a potential customer is in their buying journey, how they like to be communicated with, and what assistance they need to complete the purchase. Also, lead management: 

• Boosts customer experience: By aligning with the customers' needs and pain points, organizations can boost customer experience and build brand loyalty. 

• Saves time and resources: Sales reps can focus on the most qualified leads and shorten the time of customer acquisition with minimal use of resources. 

Establishes your brand: As you engage with the target persona in a relevant manner, you stand out as a prominent name and are recognized as a brand.

What is the lead management process?

Organizations leverage various steps or well-defined procedures to effectively manage leads and shorten the sales cycle. This collection of steps is called the lead management process.

A typical lead management process involves key elements like lead generation, lead scoring, lead qualification, and more.

Here are the steps involved in a common lead management process flow:

1. Lead generation 

Lead generation is the first step in your lead management process. It attracts your prospective customers through various means such as content marketing, paid ads, webinars, and offline events like trade shows and conferences. 

Leads captured from these sources are then fed into the CRM manually or automatically. 

Instead of constant nudging, lead generation process can use the inbound method to serve relevant content to your target audience. That’s why, more than 91% of marketers consider lead generation their top priority. 

For example, a B2B business employs content marketing to engage with its target audience at different stages. Their content marketing plan includes various content types tailored to different stages of the funnel.

In the ToFu stage, which focuses on brand awareness, the brand utilizes introductory emails, industry infographics, whitepapers, and eBooks. Moving to the MoFu stage, the brand aims to establish itself as a market leader by providing educational resources, webinars, long-form videos, and product comparisons.

Finally, in the BoFU stage, where decisions are made, only highly qualified leads are targeted. Businesses use content such as case studies, demos, customer stories, and personalized events to convert leads into clients.

2. Lead capture 

Attracting potential customers through lead generation is only half the battle; capturing their details for further engagement is equally important. 

At the lead capture stage, potential customers provide their contact details, usually by filling out a form to show an interest in an offer, service, or product. 

Lead capture tools gather contact information like name, email, phone number, and additional data like demographic information, preferences, or behaviors. This data is pushed into the CRM where the sales reps are assigned to interact with these customers and initiate the sales process manually or automatically. 

CRMs like Freshsales help in seamless and automated lead capture through a variety of web forms—including registration forms, sign-up forms, feedback forms, and others—for capturing user information and automatically pushing it into the CRM.

Generally, companies use lead capture forms such as in-page forms or pop-up forms to capture lead information in return for something valuable.

Based on the user journey, brands can leverage these lead capture forms to capture user information.  

3. Lead tracking 

Lead tracking is of immense importance since it tracks the journey of the captured leads. It is crucial to help you to determine how likely the leads will convert into your customers.

Lead tracking monitors granular details such as what pages of your website they visited, which emails they opened, what content they downloaded, or if they responded to your outreach campaigns. For example, a lead who has visited your pricing page multiple times is considered a more qualified lead than one who is visiting for the first time. Lead tracking will help capture these valuable insights. 

Lead tracking tracks activities for: 

• Page visits on the website

• Email clicks and opens

• Ad clicks

• Social media clicks, likes, and shares

4. Lead qualification

More than 65% of sales are lost due to poor lead qualification. Lead qualification vets each lead based on their interest and capacity to buy, thus determining their quality and sales-readiness.

Lead management systems use various criteria and track the lead’s activities to qualify them. For instance, it includes parameters like revenue size, employee count for a B2B scenario, or preferences and budget for a B2C scenario. 

A few lead qualification criteria are: 

• Source of lead

• Lead interest level

• Buying capacity

• Decision-making capability

• Purchase timeline

5. Lead nurturing 

There are multiple categories of leads and each lead passes through different stages in the lead management process. While some leads are interested in your product right at the beginning of the interaction, a majority of leads prefer thorough market research and a clear understanding of the product. 

Lead nurturing involves building a relationship with your customers through regular communication. The idea of nurturing leads is to steadily build trust and credibility to maintain top-of-mind awareness for your leads. It also helps accelerate active opportunities by giving prospects the information they need to decide to buy.

Some common lead nurturing strategies are: 

• Targeted content

• Personalized email marketing campaigns 

• Timely follow-ups

• Responding to queries promptly and

• Customizing solutions to the prospect's needs

6. Lead conversion 

Lead conversion is the final goal of the lead management process. It occurs when a lead becomes a paying customer, marking a successful transition from prospect to buyer. This stage is the culmination of all the previous steps—capturing, tracking, qualifying, and nurturing leads.

The lead conversion process usually involves a sales call or a meeting where the sales team attempts to close the deal. Sales reps make use of their knowledge about the lead's interests, behavior, and demands to incentivize and make a final pitch.

For example, a sales rep can offer a special limited-time discount to the lead for their first-time purchase. 

7. Post-sale relationship management

It's up to five times cheaper to retain your current customers than it is to acquire new ones. That's why the lead management process doesn't end with conversion. It continues into post-sale relationship management, where the focus shifts to maintaining, optimizing, and improving the relationship with your new customer. 

After all, your current customers are arguably your most valuable asset. Keeping them satisfied and valued leads to higher customer retention and better loyalty, ultimately helping with CLTV, reducing churn rates, and generating positive word-of-mouth marketing.

Some of the best post-sale relationship techniques are: 

• Regular Follow-ups: Use routine surveys or questionnaires to gather customer feedback.

• Quality Support: Provide fast and quality customer service/ support to mitigate issues.

• Continued Engagement: Keep customers informed about new product updates, offers, or industry trends through newsletters or emails.

• Reward Programs: Offer referral programs, giveaways, or bonuses to reward your customers and make them feel valued.

• Beta launch: Enable special access or exclusive trial to new features to the existing customer base and capture their feedback before the global announcement

• Customer advocacy: Build and nurture a community of users based on the customer segment, and host regular meet-ups and events to establish long-term relationships.

Best practices for lead management

Lead management is a continuous process. It needs the involvement of sales & marketing reps, stakeholders, and leads all in one place. Without a robust lead funnel framework, your sales process will struggle to convert leads to customers. 

Following these best practices can strengthen your sales lead management flow and move your leads quickly down the funnel: 

1. Set defined goals 

Know what you want to achieve through your lead management strategy. Brainstorm with your marketing and sales teams and define your lead management goal. Do you want to increase the number of leads, and sales, or generally be more streamlined in your sales process?

Having clear goals sets the stage for your sales process and makes it measurable.

2. Create a systematic approach 

A systematic approach is a prerequisite in developing your lead management process as it filters the most qualified leads and saves you time and resources. This is a life-saver for your sales reps as well as your marketing teams. 

The first approach is to set up micro-goals for your sales reps, the content marketing team, and the outreach team. Next, break down each stage of the sales cycle right from initiation to the conversion into micro-tasks. 

Let's take the example of a B2B tech startup specializing in cybersecurity solutions. They decided to organize their lead management process more systematically. This involved setting micro-goals for their enterprise sales, mid-market sales, and event marketing teams and breaking down tasks for each stage of the sales process.  This system prioritized high-potential leads, enabling the sales team to focus their efforts effectively. The marketing team tailored their event outreach to nurture these qualified leads, while the mid-market sales team improved engagement through follow-up emails and phone calls.

3. Set qualification criteria 

Without a well-established process, the sales team could end up wasting valuable time and effort on leads that are unlikely to convert. It is important to develop a lead qualification framework to filter out the high-qualified leads only. 

Most marketers follow the BANT methodology to set up their lead qualification criteria: 

• Budget: Does the prospect have a realistic budget?

• Authority: Are you talking to the right person in authority? 

• Need: Does the customer need to align with the product offerings? 

• Timeline: When does the prospect plan to make a purchase? 

Whether you use this framework or not, sifting the high-qualified leads can shorten and quicken the sales process. 

4. Lead segmentation methods

This involves organizing your leads into different segments based on source, interest level, and stage in the sales funnel. This targeted approach allows for more personalized communication, leading to higher conversion rates and improved customer satisfaction. 

By organizing your leads and segmenting them, you can tailor messages to each of these segments. 

5. Use clean data

Quality data outweighs quantity in a robust lead management system. A sales process will only be useful if it includes good or relevant data. A good practice is to rely less on third-party data and more on the first-party data. 

Instead of buying third-party lead data, try collecting it directly from your customers and prospects. This guarantees quality data and also ensures compliance with regulations and privacy laws. Using secure lead management software and customer relationship management systems helps maintain data integrity, safeguard customer information, and foster positive relationships with leads and existing customers.

6. Set up real-time lead alerts 

An under-utilized but highly engaging lead management practice is setting up real-time lead alerts.  A lead management system sends a real-time alert when a lead performs a significant activity, such as filling out a form on your website, clicking on a link in the email, or visiting your site after an extended period of non-activity.

Knowing your lead’s activities in real time can make a huge difference in conversion probabilities. Real-time lead alerts can assist in lead nurturing by allowing timely interactions and building robust relationships with leads. It also gives you an edge over competitors by enabling you to be the first to engage with prospects. 

Here are some key ways to use real-time lead alerts:

1. Instant Sales Call: If a lead fills up a 'Contact Me' form on your website, a real-time alert can ensure that a sales rep gets in touch immediately.

2. Personalized Email Response: When a lead downloads an eBook or a whitepaper, sending an immediate personalized 'Thank You' mail can start a conversation that may lead to a sale.

3. Alerts to Customers: Another effective way of using real-time alerts is to trigger notifications to customers, like price drop alerts, restock alerts for a product they showed interest in, or reminders of abandoned carts.

4. Social Media Engagement: If a lead comments or shares your post on social media, real-time alerts can help you respond quickly, enhancing engagement.

7. Use customer relationship management (CRM) software 

CRM for lead management helps automate and perform various tasks like recording leads in a centralized database, tracking and scoring leads, list segmentation, and automated task management. 

Customer interactions within a CRM system make it easier for the sales and marketing team to manage customer processes efficiently and track where they stand in the customer journey.

Automation for lead management 

It’s a rat race when it comes to lead acquisition, and every organization should adopt marketing strategies that help stay ahead of the competition. 

Research by Harvard shows that companies who attempt to reach leads within an hour are nearly seven times more likely to have meaningful conversations with decision-makers. However,  it is not humanly impossible to be connected with your customers around the clock. 

That’s why automation plays a significant role in streamlining your lead management process. Automated processes like email sequencing, lead nurturing campaigns, lead scoring, and lead distribution can massively increase efficiency. 

For instance, an automated system can prioritize leads based on their scoring and distribute them among sales reps. It can send personalized emails based on predefined conditions, ensuring timely follow-ups.

Automation in lead management also helps with the following: 

• Workflow management: The sales and marketing team can set up automated email templates, use chatbot templates and FAQs, and leverage AI to understand the customer’s needs. All this sets up an automated workflow so that no leads miss out. 

• Send personalized welcome messages: Ever noticed a welcome message on your email as you sign up? You can leverage this automation technique to send personalized welcome messages to first-time prospects. Engage them further with an incentive like a discount or a free trial. 

• Automated lead tracking: You can’t afford to miss out on any leads. Whether you receive it through email, SEO, social media, or any other channel, automated tracking instantly moves it to your CRM, storing it in your lead database. 

• Auto-assignment of leads: Instead of manual lead assignment, this feature saves time by automatically routing leads to the relevant salespersons. You can set rules to auto-assign these leads based on their profile, region, organization size and other factors.

The most important lead management KPIs

While a sales team may consider several metrics to track the lead management process, it is important to focus on these key performance indicators.

1. Lead score

Lead Scoring is one of the basic and most crucial KPIs for sales and marketing teams. It assigns a numerical value to each lead based on multiple attributes like demographic information, interaction with the company's marketing content, and behavioral data.

This way, sales and marketing pros can prioritize leads, respond promptly, and create follow-ups effectively. This is also a good way to segment your existing leads and retain them in the longer run.

For example, an e-commerce store scores leads based on purchase history (high score) and website browsing (low score). High scorers get personalized discount emails, while lower scorers receive general browsing recommendations. This targets outreach and improves conversion rates.

2. Leads to sales qualified leads (SQL) conversion rate

To understand this term, let’s take three scenarios. 

• A prospect visits your landing page and signs up for a demo. 

• The second subscribes to your email newsletter

• The latter then proceeds to check out the pricing page several times. 

Let’s classify these scenarios now. In the first case, the visitor is interested in the product and is considered a qualified sales lead. It enters into the sales pipeline directly. 

The second visitor is somewhat interested but is not entirely committed. He seeks to gain information through newsletters. However, when they check your pricing page several times, they’ll be considered a transitioned SQL. 

The lead to SQL determines how many leads enter your sales pipeline. The sales team can use this metric to identify the most interested leads and segment its sales pipeline. 

3. Lead-to-sale conversion rate

As evident from the name, this metric determines how many leads convert into actual buyers and contribute to your company’s revenue. Lead-to-sale conversion is crucial in determining the effectiveness of your sales funnel. 

Most marketers use lead qualification and lead tracking solutions along with lead-to-sale conversion to determine which channel and what type of lead is bringing the highest conversion. By analyzing the non-performing channels and leads, teams can iterate their process and focus more on channels that bring better results. 

4. Sales cycle duration 

Sales cycle duration is the number of days it takes to close a deal. It is calculated from the time a highly qualified lead first interacts till when the deal is closed. Sales cycle duration is the average of the time taken to close all the deals in a month, year, or week. 

Understanding the sales cycle duration can help identify the bottlenecks and the necessary sales cycle optimization steps. 

Industry benchmarks vary by business type and product complexity. For startups, the average cycle is 30-90 days, reflecting their agility. Mid-market cycles, lasting 90-180 days, involve more evaluations and stakeholder input. Enterprise deals, with complex solutions, can take over a year to close, influenced by rigorous processes and negotiations.

By comparing your cycle against industry standards, you gain insights for improvement, setting realistic expectations, and refining strategies for success.

How to choose a lead management system?

Lead management is a long and challenging process if you use spreadsheets or manual tasking. There are several lead management solutions that offer robust functionalities like lead qualification, lead segmentation, and lead scoring, along with CRM features. 

Consider these factors before choosing a lead management system: 

1. Automation

Automation plays a key role in efficiently managing leads. Robust automation streamlines repetitive tasks such as lead capture, scoring, routing, and follow-up. It also automates workflows, notifications, and responses based on predefined rules and triggers, freeing up time for salespeople to focus more on selling.

2. Use of AI

AI and machine learning capabilities augment lead scoring, revenue forecasting, and composing personalized emails. They also offer insights into the likelihood of conversion, increasing the system's ability to identify high-potential leads based on historical data and behavioral patterns.

Moreover, AI-powered CRM provides valuable insights into deals and sales trends, giving you a competitive edge.

3. Industry-fit

An important step in qualification is to consider if it suits your industry. While most lead management systems fit a wide range of industries, some are deemed fit for either B2B or B2C companies or both. When choosing a lead management system, ensure that they follow compliance and data privacy laws. 

4. Integration capabilities

Choose a lead management solution that fits into your current tech stack. For instance, you’ll need a calendar app to schedule calls with the potential client or a social proof widget when a customer lands on a certain page. Other integration options include eCommerce, GSuite apps, CRM integration, and more. 

5. Customization 

Your sales process is unique, so your lead management system shouldn't be a one-size-fits-all solution. It should offer flexibility in configuring lead scoring models, workflow structures, and reporting dashboards. Customization also means using custom rules and triggers to create automated actions and workflows for your sales process. 

6. Scalability

What if you are flooded with tens of thousands of leads? Can your system effectively categorize and segment them? The lead management solution should offer scalability in terms of adding or removing functionalities at the customer’s convenience. 

7. Reporting capabilities

Lead management systems should come with robust reporting capabilities that offer detailed insights into leads broken down by marketing source, region-wise leads, lead-to-deal conversion ratio, and more. This results in efficiently tracking and improving sales team performance and uncovering critical patterns in your lead management process. 

8. Cost

Before choosing a lead management system, assess its pricing plans and structure. Know whether it uses a pay-per-use model or a fixed usage quota in a month. It is also important to find any hidden costs or additional charges. 

Consider the above factors when choosing the right lead management system for your business. Make sure to read through the online customer reviews by existing users and see if they satisfy your needs. 

Conclusion 

Whether you're a small business just starting out or an established company looking to scale up, implementing robust lead management strategies can help drive your business toward success. 

You would need various tools and functionalities like advanced CRM systems, automated processes, and data analytical tools to improve efficiency. In the end, successful lead management ensures that your business fosters valued relationships with potential customers. 

Following these lead management best practices will help manage leads efficiently and bring everyone on the same page.