Customer relationship management (CRM) begins at the first point of contact, when a prospect is still a lead. This initial experience is crucial to leading the prospect to a sale. Lead management is essential to effective CRM.
How does a company manage the lead generation process so that leads are distributed to the right people at the right time, are acted upon and are measured to support the sales process, provide a return on investment and serve the customer?
Most companies spend a significant portion of their revenue on marketing (advertising, trade shows, etc.) but do not have adequate mechanisms to follow up with the leads generated or to measure their quality. For example, salespeople routinely discard or devalue the leads, making little or no effort to follow up with those they receive. The sales staff usually complains that pursuing raw leads is a waste of time. In their defense, they can be right.
A great promotional package on an exciting new product is wasted unless it gets into the hands of someone who has a need for that product and the budget to purchase it. The problem with focusing on quantity rather than on quality is that the message cannot be as easily tailored to a specific audience and often is not as effective as it could be. However, many marketing organizations are measured by and their budgets increased based on the number of leads generated.
When quality leads are generated, salespeople are more eager to follow up. Speed is of the essence when it comes to managing leads. Hot leads can cool off fast and can result in lost business and dissatisfied potential customers. Experience proves that the value of a sales lead decreases almost exponentially in proportion to the delay in responding to it. When response is slow, many prospects reason, "If they're this slow in responding or sending literature, I can imagine how unresponsive they'll be when we order from them." First impressions are important, and a slow response to the initial inquiry is a poor first impression.
Lack of communication and cooperation between sales and marketing compounds this problem, especially if the company is focused on quantity rather than on quality of leads or when the company does not know who its ultimate customers are because they rely on external sales and distribution channels. Many companies have attempted to solve the communications problem by utilizing call centers to qualify leads before sending them to sales, but this is only part of the solution.
The challenge is that lead management and measurement are easier said than done. Until recently, technology has not been available to support this process. The larger the company, the more complicated the process.
A more effective measurement than number of leads generated would be the number of sales made as a result of the marketing program. How does a company get this information, especially when the company relies on external companies for distribution and sales to the ultimate user and does not know who the customer is?
To make this work, sales (internal and external) and marketing have to work together to get quality leads and measure the effectiveness of the marketing programs implemented. Sales and marketing need to target the same high-quality prospects to maximize company resources. Then every lead is worth pursuing and the customer is ultimately served.
A quality lead is a prospect that either contributes to the decision-making process or has the money, authority and need for what you are offering. It is not the person who just wants another brochure for their files.
Effective lead management includes targeting high-quality prospects, capturing the leads generated, qualifying and prioritizing those leads, distributing those qualified leads (internally or externally) to those who will really follow up with them, ensuring that follow up occurs promptly and redirecting the lead if necessary, reporting the result of the follow-up.
Consider that 40 percent of the effectiveness of a direct marketing program depends on the quality of the source being targeted. The marketing department can significantly improve their efforts and results by getting the right information.
Typically, data warehousing systems capture and store the data, but the tools to extract and manage the data have only recently become available with CRM technology and have been facilitated by the Internet. The Internet allows remote sales staff and external partners to access the same data, and new CRM technology provides the tools to extract and manage the data utilizing existing data warehousing systems.
Businesses are entering an exciting time when they can easily obtain the information that is needed to foster company growth and profitability while improving customer service and satisfaction.
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