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February, 2010 | motarme

What is Lead Management?

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Lead Management

If you follow a standard process for managing sales leads, you can generate more leads, make more sales and earn more money. You can achieve scale.

Having an effective Lead Management process in place will help you:

  • Generate more leads faster
  • Pass better quality leads to Sales, so they don’t waste time chasing someone who has no real interest in your products
  • Cut down wasteful spend

 

What is Lead Management?

Lead Management and sales funnel

Sales development reps (SDRs) at business-to-business (B2B) companies spend a lot of their time trying to identify and obtain the contact details of people who might be interested in their products or services – this is ‘lead generation’. They pass these contacts to colleagues in Sales who pursue them and try to convert them to customers.

But the way companies generate and handover contacts is often badly automated and inefficient, and these contacts are often not processed effectively. Lead Management refers to the specific processes around generating leads and managing them as effectively as possible to drive sales. It can be implemented using a marketing automation system, or in your CRM system, or some combination of both.

What does Lead Management involve?

  • Lead Capturing: This is the first step – making sure you record the sales leads you generate in a standard, repeatable way. There are many ways to generate sales leads – you can capture contacts from web pages, run social media campaigns, meet people at tradeshows, try cold calling or use outbound email. But once you have obtained the contact details of a lead people are often inconsistent in how they record them and the subsequent follow-up. That means you lose those leads that your team worked so hard to generate. So it is important to have a clear and simple lead management process that follows the same steps each time. This allows you to keep track of interactions with leads and set follow up reminders, so you don’t let your prospects slip away. Step 1 is lead capture – recording your lead as soon as it is generated.
  • Lead Qualification: All leads are not created equal – some are better than others. “Qualifying” sales leads means deciding which ones are worth pursing, and which ones look most likely to be of real interest. You can rank your sales leads using a scoring model. This means figuring out how likely the contact is to become a buyer based on information about their company, their location, how often they come to your website and other online behaviors which you can observe. Leads that are more likely to turn into customers get a higher score and should be prioritized. Leads that look good but have some questions around them can go into a middle category for some kind of automated follow-up e.g. including them in a follow-up email sequence. And leads that do not match your target profile should be removed so you don’t waste the sales team’s time.
  • Lead Routing: This is assigning leads to the most appropriate sales representatives. Leads are more likely to turn into customers the quicker they are contacted. You can apply sensible rules about which salesperson should get what lead, you can specify how quickly a lead should be acted upon, and you can provide your sales staff with much richer background information on the contact.
  • Lead Nurturing: Your leads will be at different stages in your sales funnel. Some may not be ready to have a sales conversation now, but are still genuinely interested in your product or service.  It is important to build and maintain an ongoing relationship with all prospects. The goal is to keep your company ‘front of mind’ with them until they are ready to engage with your sales team. You can define a chain of communications you want to send out to leads and specify the time intervals between each email or call. The communications should be related to their industry sector  and specific role to ensure they are relevant. Then you can automate the sequence using an email marketing tool, a  marketing automation system or your CRM system.

As companies grow, lead management becomes more difficult. It is easier to manage 100 leads than 1,000. By having a lead management process in place and using automation tools to help, sales reps can identify which sources tend to generate high quality leads, and what kind of leads are more likely to convert to customers; this helps you learn how to spend your sales and marketing budget with greatest effect.

There’s a clear return on investment from automating lead management. A CMO Council Survey estimated that 80% of leads are either lost, ignored or discarded. MarketingSherpa also estimated that around 75% of leads generated by most companies are not followed up if they’re not a short-term opportunity (i.e. going to close in this quarter).

With the average lead costing around $180 or more to generate, that can quickly add up to a lot of money. Or to put it another way – calculate the proportion of your sales budget you spend on lead generation; how much is 80% of that?

So, if you want to scale up your sales, you’ll have to scale up demand generation and that in turn means you should to start looking at automating how you manage leads using a simple, consistent process. 

Social media and snake oil

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Who’s legit and who’s fake when it comes to social media? Two contrasting views on the topic come from Olivier Blanchard with his article “Is your social media director qualified?”, and “Attacking the social media lynch mob” by Jay Baer.

Olivier has high standards and trenchant views on who’s qualified to set the social media agenda.  He says there are three types of social media directors:

  1. the first type are “super smart, talented, experienced in a broad range of disciplines, have an established foot print in social media space”, are recognized as thought leaders and are passionate about what they do.
  2. type 2 “isn’t quite as savvy but isn’t lacking in talent, smarts and enthusiasm”.
  3. type  3 is “the bad type…. con artists… shams”. You get the picture.

I’ll let you self-diagnose.  Olivier goes on to provide some tips on how to spot your ideal candidate, including “applicant can tell a personal story involving either Digg, Seesmic or both”.  Scary stuff.  There doesn’t seem to be much room for the amateur enthusiast in this definition.

Jay Baer has a different outlook.  His view is “just because someone takes a more tactical approach to social media, just because they don’t measure ROI the way you do, just because they focus on small business and you don’t, does not mean they are charlatans… And this notion that you can’t be good at social media unless you’ve been doing it for years is utter crap.”

I’m inclined to agree with Mr. Baer.  There are a lot of bright people out there who are just beginning to turn their attention to social media, particularly those working in B2B marketing.  I don’t expect their lack of previous experience is going to prove much of a barrier, given the speed with which they’ve adopted and exploited a host of other technologies to date.

Anyway, I’d like your views on other categorizations of prospective social media directors. I’d particularly like to see some that are funny (humour wasn’t prominent among Olivier’s list of preferred characteristics).

A manager’s guide to Digital Marketing

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This is a presentation I gave recently on Digital Marketing, aimed at business managers.   The presentation lists the online tools you can use before describing each digital marketing technique in a little more detail.  Topics covered include web-site design and landing pages, Google pay-per-click advertising, search engine optimization, email marketing, online PR and various forms of social media.  You can find this and other more detailed guides on the main Motarme website too.

View more presentations from Motarme
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