The Green Sheet Online Edition
March 14, 2011 • Issue 11:03:01
Leads, leads, leads - Part 2: Lead management
Sales leads play a crucial role in the payments business, and for that reason, I'm writing a three-part series of articles for The Green Sheet dedicated to this significant topic. In last month's article, "Leads, leads, leads - Part 1: Lead generation," Feb. 14, 2011, issue 11:02:01, I noted that successful lead-generating companies typically employ a comprehensive arsenal of inbound and outbound tactics in a continuous, long-term approach.
I hope you've already started to apply a number of promotional techniques, like email, direct mail, search engine optimization, advertising and more to ramp up your lead generation efforts. If you have, you're on the road to generating a great many more leads for your business.
Next, consider what to do with these leads as your pipeline begins to fill. The answer lies in effective lead management - the subject of this article.
What is lead management?
Lead management is the orderly process of what happens to prospects from the moment of inquiry and information capture though progression of the sales cycle. Although companies can pour significant funds into lead generation efforts, few leads convert to actual sales unless the leads are managed effectively.
Leads come into your business and then what? Do they receive proper and timely follow up? Do you have a way to track them? Do you know what to do with them? Do you have the bandwidth to handle them all? Are your leads passed directly to sales without qualification, resulting in wasted selling time? If so, what can you do to reverse this disconcerting trend?
You can solve problem areas the preceding questions brought to light by implementing two fundamental components of effective lead management:
- Create and maintain a record system or centralized database of potential sales opportunities - your leads.
- Define and implement a disciplined process that moves prospects captured in your database through the entire sales cycle.
Lead management can be a manual effort or you can take an automated approach.
A central lead database
Please know that you're not alone if you don't have a centralized database or if you're using Microsoft Excel to house lead information. In a 2009 Lead Management Practices Survey conducted by the Velos Group, 23 percent of responding businesses indicated that they do not maintain a central prospect or customer database. An additional 24 percent reported that they use Excel exclusively to track leads. Does your company fall into one of these categories? Chances are the answer is yes.
Many companies use Excel because it is easy, convenient and affordable for entering and accessing information about leads. While Excel may be OK to start with, and is better than doing nothing, it can become cumbersome, unwieldy and inefficient as the number of leads grows.
Several sales force automation (SFA), customer relationship management (CRM) and marketing automation solutions are available to build and maintain a database, plus provide details about prospects expediently. Some of the more well-known applications include ACT, Eloqua, Goldmine, Marketo, Microsoft CRM, Salesforce.com, SalesLogix and SilverPop.
A disciplined process and methodology
Yankee Group Research Inc. estimates that between 40 and 80 percent of new business leads are lost, not followed up or are otherwise mishandled due to poor company processes. Gartner Inc. concurs; its research revealed that as many as 70 percent of all leads are never acted upon. The key to outperforming the competition is to implement a disciplined process and methodology that focuses on turning inquiries into qualified leads and then into sales.
Determine how you manage leads. Identify what happens to leads that aren't hot or prospects that aren't ready yet to buy. Make sure to map out each step in your sales cycle to ensure no inquiry is lost and that all qualified leads are pursued by sales. Again, your approach can be manual or automated. Regardless of the approach taken, companies with the best processes and methodologies win through increased sales and reduced costs.
You can use SFA, CRM and marketing automation software to computerize your lead management process and methodology. The 2009 Velos Group survey reported that companies that use them close a higher percentage of leads than those that don't. These tools provide functionality to help gather information, track lead generation activities, facilitate progression through the sales cycle, determine when leads are qualified and sales-ready, forecast revenue, and understand the success or failure of various lead generation efforts.
Adtrack Corp., maker of the SmartLead lead management application, boasts that its customized systems and services can reduce lead follow-up time by 50 percent, increase lead reporting by 90 percent and grow sales by 100 percent. Other vendors make similar and even bigger claims. In a customer briefing document, Marketo Inc. claims its marketing automation software leads to a 190 percent sales conversion increase.
On the flip side, you won't be alone if you choose to take a manual approach. The Velos survey indicates that 53 percent of respondents still don't use an automated SFA, CRM or marketing automation application. That number jumps to 71 percent when a company has fewer than five sales representatives. The reason SFA, CRM and marketing automation tools are not adopted is that they frequently take up significant company resources in terms of time, money and manpower.
Effective lead management yields results
Companies can achieve positive results by employing effective lead management strategies. They typically:
- Convert more leads into sales
- Shrink the sales cycle
- Increase revenue
- Reduce lead generation and customer acquisition expense
- Boost productivity
- Enhance forecasting
- Create revenue predictability and consistency
- Build the lead database into a company asset
- Increase corporate valuation
By spending time and resources on lead management, you can reap the benefits of having an effective strategy to increase sales and reduce costs while propelling your business ahead of the competition.
Stay tuned for part three in this series, which tackles the subject of lead nurturing. Until then, keep generating leads and work on improving your lead management database, process, methodology and systems.
Peggy Bekavac Olson founded Strategic Marketing, a full-service marketing and communications firm specializing in financial services and electronic payment companies, after serving as Vice President of Marketing and Communications for TSYS. She can be reached at 480-706-0816 or email@example.comZ. Information about Strategic Marketing can be found at www.smktg.com.
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