Building an Effective Lead Management Program

Nothing impacts the bottom line more than sales. From staffing to facilities to employee benefits and beyond, business decisions are supported—or not supported—by sales. Yet many companies continue to rely on inefficient sales processes that result in only moderate success in identifying, qualifying and capitalizing on valuable prospects. Gartner Inc. reported that as high as 70% of sales leads are not properly leveraged, leaving strong revenue opportunities on the table.

Given the importance of sales, it’s not surprising that lead management has become a critical focus of business today. Companies are discovering the key challenges to creating successful lead generation and qualification processes include:

How to better identify and interact with key prospects
How to gain insight into prospects’ needs to shorten the sales cycle
How to match product or service offerings to a prospect’s pain points

To meet these challenges, leading organizations are making the transition from “push”sales strategies and processes to a more prospect-focused “pull” approach for lead acquisition. Successful firms have realized gains from identifying a prospect’s needs and matching their business offerings to meet those needs. Results are shortened sales cycles, improved close rates and profitable customer relationships over the long term.

The Obstacles to Poor Lead Management

The most basic definition of a lead includes a prospect’s name, address, telephone number and area of interest. In today’s marketplace, however, a company’s relationship with a prospect must go beyond simply obtaining contact data. An interactive relationship based on the needs, priorities and business objectives of each prospect must be fostered. Before solutions can be laid out, an understanding of the prospect’s key points of pain must be made. And that only comes as a result of forming a trusting relationship the prospect deems valuable.

In The Intelligent Lead: What Salespeople Really Want, an August 2002 report by Gartner, the research firm explains that most marketing and sales departments distribute leads from a variety of channels to sales reps. Due to the numerous channels in which to capture and filter leads, lead volume flowing into an organization can be overwhelming. Sales agents are bombarded with information from so many touchpoints that they have difficulty determining which leads are worth pursuing and which ones are not.

In this scenario, marketing typically throws long lists of unqualified contact data “over the wall” to sales. Sales agents then waste valuable selling time sifting through the lists to identify and qualify potentially valuable leads. Surprisingly, this basic level of lead management remains prevalent in many Fortune 500 companies today.

Internet Drives Change

Joe Galvin, VP and Research Director of CRM practice at Gartner, adds that inefficient use of time is not the only obstacle hampering sales agents. Lead quality is also diminished by the absence of refined lead management strategies to properly channel incoming data. “Typically,” says Galvin, “a rep will take one or two leads and try them. If they’re good, the rep will move forward; but if they’re bad, the rep assumes that the rest are bad and moves on.”

With marketing and sales often operating in relatively distinct environments, this practice has persisted. But the Internet’s rapid emergence as a communications tool has begun to cause change as the two departments are forced into greater synchronization. “Now there’s real accountability,” notes Galvin, “so for marketing to generate 1,000 leads and hand them to sales is no longer good enough.”

Simple Lead Qualification is Not Enough

Due to increased communication and accountability, marketing now spends more time pre-qualifying leads it generates according to a prospect’s interest levels and, in some cases, buying history. This process moves beyond capturing basic contact information to grading interest in products and services and funneling the information to the appropriate sales representatives.

Although this approach to lead management is widely used with some success, it still lacks 100% effectiveness. Why? Eager to capitalize on immediate opportunities, sales reps tend to focus on the “hot” leads for a quick close and rely on basic, product-centric qualification efforts that limit visibility into the unique needs of prospects. To truly unlock the ROI potential of a client acquisition initiative, a deeper level of insight into individual prospects is required.

Where Relationship Strategies and Prospecting Intersect

Organizations are realizing that the relationship between the prospect and the sales team must be nurtured all the way through the pipeline until the point of sale. Prospects should not be viewed as potential sources of “one-and-done” transactions, but rather as opportunities for profitable relationships that grow more valuable over time.

Rather than finding prospects and customers that fit specific products or services, companies must first identify the needs and business challenges of individual prospects. Once these unique needs are identified, prospect valuation can begin, mapping the expressed needs and profiles of prospects to those opportunities deemed most valuable to the company.

When value is assigned, lead management opportunities can be further identified and prioritized and different sales and marketing strategies created. It’s a prospect-centered lead management approach that can shorten the sales cycle, optimize the selling time and overall effectiveness of the sales force, boost close rates and drive ROI.

The Methodology Behind One-to-One Marketing

The difficulty, of course, in identifying prospect needs and business challenges is in implementing technologies and tactics that allow for this kind of feedback. According to Peppers and Rogers Group, the most effective initiative will require an organization to:

Identify individual customers
Differentiate them according to their needs and value to the firm
Interact with them in a cost-efficient manner while
Remember each previous interaction
Customize products or services according to that insight

In doing so, companies treat different customers differently and build profitable relationships that generate loyalty, retention and revenue.

One to One Marketing, which weds the flexibility and live aspects of internet technology with traditional marketing tactics like direct mail and email, permits organizations to apply this methodology to marketing—treating different prospects differently based on their response to the campaign. Via customized marketing and sales strategies that vary according to prospect need and value, a company opens the door for more successful close rates, a more robust pipeline, a shorter sales cycle and long-term retention revenue.

Conclusion

Providing the sales force with qualified business opportunities at the right time in the sales cycle is critical for creating profit. The solution for effective lead management is One to One Marketing, which utilizes innovative relationship strategies to identify the unique needs of prospects and match products and services accordingly. Enterprises that take their lead management and prospecting to the next level will be in a stronger position to grow revenue, maximize efficiencies and increase market share.

Source: Peppers and Rogers Group

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