For businesses seeking to increase profits and ensure they are reaching the right clients, lead management is a crucial part of the process. For some businesses, a specific in-house team manages incoming leads by responding to emails or working on live chat, among other examples. However, effective lead management requires much more than just responding to an email—and thankfully, lead management systems are available to help.
If lead management is more than just responsiveness, how is it defined? And how can it help a business increase revenue and improve overall profitability?
In general, “lead management” refers to an overarching system made up of many moving parts that all have individual roles to play in generating, retaining, and converting leads, or customers, over time. It is not quite the same thing as advertising or sales, and it should occupy its own space in a company’s business plan.
Lead Generation
One of the most important aspects of a lead management system is lead generation.
Lead generation is the introductory point of the system that hooks new customers, bringing in people who have never experienced the product before. This is sometimes referred to as “lead capturing,” and it can be accomplished in several ways. Companies with a strong online presence might see significant lead generation from online forms, emails, and live chat features, for example. Other companies may need to use different methods that will work best for their unique products and services.
Lead Tracking and Qualification
Once leads are generated, a management system that’s doing a good job can follow individual patterns in users to determine if they are a “qualified” lead. A qualified lead is someone who has the potential to buy something (rather than someone who is simply interested but unlikely to make a purchase).
Lead tracking pulls a significant amount of data from leads—things like email engagement and whether potential customers are reading and interacting with the messaging that the brand uses. Similarly, other metrics to track include downloads (of what, when, and how often) to see if the client is putting faith and value in the brand. If a customer is doing these things, that can indicate that they are someone who is more likely to commit to the business after developing a personally beneficial relationship from it.
Browsing patterns are another important factor in lead tracking. Examining the patterns that potential customers follow when they browse will enable a business to determine what the lead’s interests are and how likely that client is to convert. It will also harvest important individual patterns that can be used by a solid lead management system to provide enrichment—in other words, the lead management system may be able to provide personalized sales efforts based on the knowledge that the company has about that particular lead.
Once enough data has been collected about a lead by the management system, a determination can be made on the lead’s “qualification.” Only those customers who are ready to commit, are engaged and interested in the brand should be qualified; this helps to ensure that spending and other efforts are dedicated only to those clients most likely to convert. Engaging with qualified customers helps businesses avoid wasted spending on low-quality leads. After this, leads can be distributed to the right departments; a savvy lead management software will do this automatically.
Communication
Once leads have qualified, a company can direct spend toward them in an attempt to convert. This process, called "lead nurturing," is another feature that management systems handle well. Lead nurturing guides the potential customer the rest of the way through to becoming sales ready. Based on what the lead management system has already gathered in data about the user, personalized messages are sent targeting that client’s pain points while providing helpful information and opportunities for conversion.
These touchpoints might include such things as product demos, videos, educational content, and even promo offers targeting the items that will engage that particular lead. All of this can be calculated by a lead management system to reduce the burden on in-house employees.
How a Lead Management System Increases Revenue
It is likely already easy to see how a lead management system can improve not only the workflow of a business but also its lead accuracy. Increases in efficiencies like these offer several money-saving opportunities for businesses in addition to the potential for further increases in profit and revenue growth.
For example, consider the expenditure of a company where leads are not targeted and qualified. How much money is spent targeting customers who will never convert, have not interacted with the brand in some time, or have already fulfilled their needs elsewhere? Cutting this spending by using a more refined system will save money in both the short and long term.
Similarly, by targeting customers who are more likely to convert and providing them with more personalized material courtesy of a lead management system that has gathered and sorted this individualized data, clients are more likely to not only convert but to become lifetime customers. Boosting their LTV (lifetime value) creates further revenue for the company in the long term. Since these converted buyers are already loyal to the brand, the process of targeting them can shift into a lower gear and save expenditures; it will almost always be cheaper to retain than to bring in new customers.
Finally, a lead management system can improve the overall flow of the business by pointing out weak areas that are handicapping conversion rates (and thus, profits as well). Whether the hang up comes from a long sales cycle, lack of engagement, or simply not enough team bandwidth to handle all of the incoming leads, a management system will automate much of the process and demonstrate where these holes are so that they can be fixed for greater efficiency and conversion potential.