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Everything You Need to Know about Lead Management

Published February 14, 2022 By Klim Lugovtsov

If you’re reading this guide, chances are you have an idea of what lead management is. And, if you think lead management has to do with managing leads, you're right! But the reality is lead management is much more than that. 

In this guide, we discuss what lead management is, why it’s a vital component of any business looking to scale its operations, and when to know it’s time to invest in a lead management strategy.  

We also unpack the fundamentals of lead management, how to develop an effective strategy, and how to implement a lead management process using the HubSpot CRM platform.  

To gain a better understanding of lead management and why it's important, let's think about the role of a dentist. Dentists attend to several patients each day. However, though multiple patients visit the same dentist, they don't receive the same treatment plan. Each patient receives a tailored plan matched to their dentistry needs. So, how does a dentist develop a different plan for every patient? Simple - they ask the right questions and gain an understanding of each patients’ health and what concerns led them to visit them in the first place.  

This procedure is very comparable to lead management. To attend to each of your unique leads, you must try to understand exactly who your leads are and why they've shown interest in your business. With this information, you'll be able to engage with each of your leads in the right way — whether that's by sending them content that's specific to their needs, or by having them speak with the right individual at your business. 

Effective lead management is one of the core principles of any successful business. It’s helping the right people become your customers and making it easy for them to buy from you again in the future. 

What is lead management? 

Lead management is the process of acquiring new leads, evaluating them for quality, engaging with them, and nurturing them. It helps you invest in leads that will generate business and keep opportunities from falling through the cracks. Whilst we'd like to think of each new contact as a lead that's ready to make a purchase, that isn't always the case. Lead management helps you understand the types of leads you have and where they are in the buyer's journey.   

Lead management helps you identify where your lead is in their buyer's journey, and ultimately, move them closer to a purchase. It's important to note that a lead's path to purchase isn't always linear. Sometimes they may revisit previous stages in the buyer's journey or may need extra nurturing to move them towards a purchase decision.  

Jargon explained:

  • Lead – a contact who has converted on your website or through some other interaction with your business 
  • Buyer’s journey – the journey completed by a customer who makes a purchase decision. The buyer's journey consists of three stages: the awareness stage, the consideration stage, and the decision stage. In the awareness stage, a lead recognises they have a problem they need to solve. In the consideration stage, a lead defines what their problem is and considers options to solve it. In the decision stage, the lead evaluates and decides on the right provider to administer the solution, leading to a purchase.

Lead management helps you manage the entire process of your lead's buyer's journey, no matter how complex their path to purchase may be. But, as your business grows and you start to generate more leads, you may not have enough time or resources to dedicate to each lead. That's why lead management is crucial for any business that intends to grow and scale.  

infographic for lead management

Simply put, lead management is the vehicle for generating leads from your inbound marketing strategy. It’s only the first step of the sales process, so you’ll still need to push leads further down the sales funnel (e.g., by delivering a sales pitch, addressing objections, and following up post-sale to make sure they’re satisfied as customers). 

Now that we’ve unpacked what lead management is all about, let’s take a closer look at why it’s so important.  

Why is lead management important? 

Setting up a lead management process provides your business with a host of benefits:  

  • Streamlined sales process – With lead generation management, businesses get a clear view of their customer journeys. And, customer journey’s show where automation can be implemented to help streamline the sales process. It might be possible to automate an e-mail drip campaign or set up automated calls to leads that take manual work off the desk of the sales team.
  • Convert your leads into customers – not all leads are ready to talk with sales. With lead nurturing and lead scoring, you’ll be able to nurture your leads to a point where they’re more likely to engage with your sales team 
  • Data-driven marketing strategy – When companies use lead management, they get access to valuable data about their inbound leads and customers. This attribution data can be compiled into reports that show side-by-side comparisons and reveal top-performing assets and lead sources. These insights can then be used to build an optimised marketing strategy based on data.  
  • Solve some of the most common pain points for salespeople - Lead management prevents your sales team from wasting time on unqualified leads. Instead, they will be able to focus their attention on engaging sales-ready leads only. 
  • Solves sales and marketing misalignment - The foundational aspect of successful lead management is marketing and sales alignment. Lead management is usually the responsibility of the sales team, but a good lead management strategy creates harmony between these two crucial units. This way, you’ll be able to generate, nurture and convert leads to the best of your ability. 
  • Improve the buying experience - With data-driven lead management, you can send timely updates or useful, informational material to help your leads move through the buying process.

What problems will lead management software help solve? 

By mapping out your lead management process and using lead management software, you’ll be able to solve several common business problems. These include: 

  • Inaccurate lead tracking – a lead management software will allow you to stop juggling your lead tracking across multiple tools and ensure you have all the relevant information about each lead under one roof 
  • Manual lead sorting – Businesses that use manual methods to collect and sort leads will run into errors and find it impossible to scale. With lead management software, businesses can automate their lead sorting (by way of lead scoring) and segment their database into high-quality (warm) and low-quality (cold) leads 
  • Lost leads – Many types of manual lead solutions, such as Excel spreadsheets or desktop folders, are prone to human error. This can cause some leads to be lost. Lead management software ensures that every lead is accounted for and  businesses don’t miss out on revenue because a lead was overlooked  
  • No lead nurturing – Without lead management, it becomes very difficult to do the necessary work of nurturing your leads. Lead management software  will automate your lead nurturing by sending e-mails or SMS messages to leads, moving them further through their buyer’s journey and closer toward a purchase decision 
  • Not maximising revenue – All businesses strive to make decisions that will help to increase their return on marketing investment. Lead management makes it possible by providing key data in fast-loading reports to give marketers a precise indication of where to focus their efforts.

The fundamentals of lead management 

Now we’ve covered why lead management is important, let's take a closer look at its fundamentals. Lead management involves engaging and nurturing leads, depending on their needs and goals. Because each lead is unique, each organisation's lead management process should also be unique. However, there should also be some consistency. All successful lead management processes should have these six elements in common.  

Sales and marketing participation  

Lead management isn't only a marketing responsibility, nor is it the sole responsibility of sales. Because leads are critical to both teams' success, both teams will need to work together. Generally speaking, marketing teams are responsible for leads that enter their database but aren't ready to make a purchase. Sales teams on the other hand are responsible for qualified leads who are in the ready-to-buy stage. Because both teams have varying customer insights and influence on leads, both marketing and sales teams are equally responsible for lead management. As your organisation grows, those responsible for lead management may also grow. But, when it comes to implementing your lead management process for the first time, having at least one member from marketing and sales will suffice.  

Document buyer personas  

A buyer persona is a semi-fictional representation of your ideal customer based on real data and educated speculation about demographics, behaviours, motivations, and goals.  With this information, you can tailor your content and messaging to meet your buyers’ specific needs, behaviours, and concerns. By understanding the different challenges and goals your leads have, you'll be able to develop a lead management process that better serves each of them. Depending on your business, you may have one or two personas, or as many as 10 to 20. Once you've established your personas, they’ll help influence the third element — a proper lead management strategy. 

Lead management strategy 

Planning a lead management process can often feel overwhelming. With so many touchpoints made by your leads throughout their buyer's journey, you may feel inclined to build a cumbersome lead management process that automates every component possible. But, understandably, this can take a lot of time. Instead, focus on developing a strategy that meets a common goal. This will ensure all participants are aligned and working towards the same outcome.  

A Service Level Agreement (SLA) 

An SLA is an agreement between a service provider and its customer that guarantees a certain output. In this case, developing an SLA for your marketing and sales teams is crucial. An SLA will help align both teams, hold them accountable for their responsibilities, and ensure your lead management process operates seamlessly. One of the most common challenges organisations face is misalignment between marketing and sales, causing friction and poor customer experiences. An SLA is key to ensuring an efficient and effective lead management process. 

The right technology in place  

The technology your organisation uses is crucial to the success of your lead management strategy. To manage your leads effectively, you'll need software and automation that can help simplify how you engage with each potential customer. Some of the most important tools for lead management is a CRM platform, an automation tool (for both sales and marketing) and an e-mail tool. 

Understand components of a standard lead management process  

Although lead management differs between companies, a standard lead management process has five main elements: lead generation, lead qualification and segmentation, lead nurturing, lead scoring and lead routing, and measuring success. 

The lead management process

infographic for lead management

Now that you have a better idea of what lead management is, let's take a closer look at how it works. To do this, we’ll review the standard path that leads move through. 

 Lead management has five major stages that influence potential customers to learn more about your brand and move closer to a purchase.  

 These stages include:  

  • Lead generation 
  • Lead qualification and segmentation 
  • Lead nurturing 
  • Lead scoring and lead routing  
  • Measurement of success 

Stage one - lead generation 

Leads begin by entering your database. This happens when a visitor to your website fills out a form with their information. That lead's information is then stored as a contact record in your Customer Relationship Management (CRM) system. This is known as lead generation. Essentially, it’s the process of attracting and converting visitors on your website that have shown interest in your company's product or service. 

Lead management doesn't work if you’re missing leads to manage or engage with. That's why lead generation is critical to helping you acquire new leads and customers. Thinking back to the lead's path, lead generation moves leads into that first step of collecting their information, by converting them on your website and ensuring they're stored in your CRM. 

Now, you may be wondering — why not purchase a targeted list or buy leads? Whilst this may be tempting for some, this isn't a best practice for lead management. Purchased leads likely didn't opt-in to receive communication from you. So, messaging and communicating with them can be intrusive and ineffective. Not to mention, this can cause people to flag your e-mails as spam, or worse, place your company on a blacklist for e-mail providers. By implementing lead generation into your strategy, you'll ensure you're converting only the most qualified leads and building authentic relationships throughout. 

Stage two – lead qualification and segmentation 

Next, the lead is organised into a group based on their activity or information provided. This is known as lead qualification and segmentation. For example, if the lead filled out a form to register for a webinar, they may be added to a list of webinar registrants. 

Lead qualification and segmentation organise leads in your CRM. At this stage, it's important to divide leads based on their needs, by understanding who they are and why they've engaged with your company. After all, lead qualification is the process of identifying those leads that are ready to enter the sales process.  

According to Invespcro.com, 30-50% of sales go to the vendor that responds first. Whilst most leads may not be ready to purchase at their first engagement, it's crucial to identify those that are and respond quickly. 

 Lead segmentation is the process of dividing your contacts into sub-groups (known as segments) based on shared characteristics. Segmentation is necessary for marketers to send the right content, to the right person, at the right time. Not only will it improve your lead's impression of your brand, but also improve the effectiveness of your different marketing campaigns. Whilst both help you understand your lead's goals and needs, lead segmentation is commonly used in marketing, whereas lead qualification is more commonly used in sales. 

Stage three – lead nurturing 

Based on how that lead is identified or grouped, they will then receive messaging or communication from the organisation. For example, a lead that shows interest in a webinar may receive an e-mail with additional details and promotions prior to the event. Leads often remain at this step for a while and receive additional content over time. This content should help them move closer to achieving their goal, as well as learn more about your brand.  

Lead nurturing helps move leads to the third step, in which they receive communication from your company. It’s the process of building relationships with your prospects with the goal of earning their business when they're ready. Automation and workflows are great for this since they can help scale your lead management process by automating manual activities and communications, all whilst providing personalisation for each lead. 

Stage four - lead scoring and routing 

This brings us to lead scoring and lead routing. Lead scoring and lead routing is the process of assigning value to each lead to prioritise outreach. It facilitates our final step in which leads are ready to buy and enter the sales process. 

Whilst some organisations may struggle to obtain new leads, others struggle with having too many qualified leads and not enough resources. By developing a lead scoring system for your organisation, prioritising your qualified leads will become easier. 

Lead routing comes after lead scoring and is the process of automatically assigning leads across a sales team. Automated lead routing can be simple, such as assigning a new lead to the next sales rep in line. Mature lead routing models consider multiple factors and use a lead scoring system to pass leads to the right person. Lead scoring and lead routing are crucial to ensuring you're targeting the most qualified leads and missing any. Like with any strategy or process, it's also important to measure its success. 

Stage five - measurement of success  

Lastly, the lead makes a purchase. At this point, the lead has received the information they need to decide to purchase from you. If the lead was happy with their free consultation, this would be the point at which they pay for the company's services. And, as more leads travel through your process and become customers, it's important to measure the overall success of your lead management. You can do this by reviewing your process, identifying friction, and determining the number of leads converting to customers.  

To start, use funnel reports to help track where your leads are in their buyer's journey, and identify where they're getting stuck. You can also evaluate your process by conducting ‘smarketing’ meetings. A smarketing meeting is when sales and marketing teams meet to discuss problems and collaborate on developing solutions. Marketing and sales teams may have different goals, but smarketing meetings can help improve both of their lead management processes. By measuring the success of your process, you'll be able to attribute which of your activities helped influence new customers and the parts of your process that need improvement. 

Lead management is not always a linear process  

As you can see, lead management involves many factors. But, if you break down the process into these five stages, tackling each step over time, it will begin to feel more manageable. By understanding how your leads move through your organisation and building a framework that helps them move through their path to purchase, you'll create a seamless process that converts more of your leads into happy customers. 

However, it’s important to remember that lead management is not always a linear process. You may have a lead that's been receiving communication from you and decides to make an online purchase immediately. In this example, you’ll see your lead move from the third stage to the fifth stage. No matter how your leads move through each stage, it's important to note that all leads won’t progress in the same way.  

Another example of this can be seen when one lead knows exactly what they're looking for and are ready to buy as soon as they enter your database. But, if you're an e-commerce company, the path to purchase may be a lot quicker. 

Best practices for effective lead management

No matter how well-thought-out your lead management strategy is, failing to follow some best practices could mean you miss out on opportunities to reach potentially valuable leads.

Use clean data to ensure the information you have is relevant   

Lead management relies on data and metrics that you and your team can understand. That’s why it’s so important to have best practices for keeping customer data organised, relevant, and accurate. 

Your data is only as good as its usability, so make sure it’s safely stored and easy to leverage. 

Regularly update the status of your leads  

For successful lead management, you should always look to update the status of each lead. Following a formalised process can increase productivity and minimise inefficiencies. Most sales reps are in a rush, so they fail to update the status of the lead which results in unnecessary clutter. If this is the case, make use of automation to remind the sales rep when a lead status needs updating. Though this task might seem time-consuming, it’s worth the effort; you'll begin to understand which leads need immediate attention, and which needs to be removed from the funnel. 

Invest in lead management software to centralise information 

Many businesses use Excel spreadsheets to track leads, but this process can result in mistakes and missed opportunities. A lead management software is more reliable. Lead management software houses information from the entire lead management process—from generation to nurturing—in one place, so your sales team can quickly gain insights about encouraging conversions. 

Map out your process in a document  

Even if you don’t think you have a sales process, you do. Maybe you capture leads by writing names on sticky notes or dumping e-mail inquiries into a bespoke folder on your desktop.Whatever you’re doing, get it on paper. You’ll immediately see where you have gaps, inefficiencies, or duplicated efforts and know where improvements are required.