When you run a business, there’s a critical period between when a person becomes aware of your brand and when they make a purchase. While it might seem like a black hole, this gap contains a lot of opportunity. Taking advantage of it underlies a business strategy called lead management.
Instead of keeping potential customers floating in the ether, you can use lead management to bring them into your orbit and help you earn new sales. Ahead, let’s delve into what exactly lead management is and what it entails, and explore software for executing a successful lead management strategy.
What is lead management?
Lead management is the sales process of identifying potential customers, then cultivating relationships with these consumers until they make a purchase. These potential customers are leads—consumers who are likely interested in your products, but haven’t yet chosen to purchase. The ultimate goal of lead management is to convert leads into paying customers.
A lead management system optimizes the conversion path by meeting customer needs at pivotal points in the customer journey, creating a strong foundation for long-term loyalty.
Stages of the lead management process
The lead management process involves a number of steps that help take you from lead generation to conversion:
1. Research
Generating leads begins with consumer research. Start by understanding who your ideal customer is. You can do this by analyzing market research, sending customer surveys, and looking at your business’s past sales data.
Once you’ve gathered information on your ideal customer, you can create various buyer personas that reflect who your product or service is best suited for. From here, you can create targeted advertisements, personalized marketing materials, and broader lead generation campaigns that will appeal to members of your target audience at different points in the sales cycle.
You could think of lead generation as casting a net in a vast ocean of potential prospects. There may be many fish in the sea, but the right brand messaging and marketing tactics are like having the perfect kind of net for the fish you’re trying to catch: your ideal customers.
2. Capture
A great way to capture leads is by obtaining contact details through opt-in forms on your website. Once a person submits information like their email address, they’re considered a captured lead in your sales funnel.
These opt-in forms can take the shape of email newsletter sign-ups, footers and headers with submittable forms, and pages where users can input their contact details to receive more information about your product or service.
To capture more leads, consider offering consumers a perk in exchange for their contact information, like downloadable content, early access to product drops, or a welcome discount on their first purchase.
3. Qualification
Once you’ve captured leads, it’s time to categorize them into segments based on their relative value, interest, and purchase intent—a process known as lead qualification. As you begin to categorize leads, you can keep your data organized with a lead management database.
There are several common types of leads you’ll come across in the lead qualifying process: These include marketing qualified leads (MQL), product qualified leads (PQL), and sales qualified leads (SQL).
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MQL. These leads usually need more information, marketing, and nurturing before they’ll make a purchase.
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PQL. These leads have already interacted with or experienced one or more of your products. Maybe they’ve tried a sample or started a free trial, for example.
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SQL. A sales qualified lead is almost ready to purchase and just needs a final push to convert.
Reviewing and qualifying leads also involves a process called lead scoring, in which you determine how likely a lead is to make a purchase. Lead scoring is often done by marketing and sales teams that review each lead and categorize it. They’ll infer as much as possible about a lead by looking at information such as budget, purchasing authority, and timing.
Knowing these facts about a lead can help you get a better picture of a person’s readiness to buy and what kind of marketing or nurturing they’ll need to successfully convert.
4. Nurturing
Nurturing leads requires building relationships with potential customers and demonstrating the value of your product: how it makes customers’ lives easier or solves a specific problem for them. Part of lead nurturing involves identifying how to approach different customers from a marketing perspective, which is called lead distribution. This gets into the details of understanding the kind of specific nurturing each lead needs in order for your brand to best resonate.
Rather than treating all leads the same way or sending them all the same marketing materials, it’s more effective to take different approaches for different leads. For instance, marketing qualified leads may require more high-level messaging, whereas sales qualified leads may be ready for direct interaction from the sales team and straightforward details on how the product functions.
You might also consider personalizing your marketing materials to individuals. According to research from Boston Consulting Group, around 80% of consumers are comfortable with personalized experiences from brands—and most even expect them.
You have several options for personalized lead nurturing, such as sharing personalized product recommendations, offering specific discounts, and sending direct messaging that encourages leads to complete a purchase (like abandoned cart reminders). Note that you can continue to nurture leads post-purchase. This can grow customer loyalty and helps convert leads into repeat customers.
5. Conversion
The outcome of an effective lead management strategy is conversion. This is the point at which a lead becomes a paying customer.
Not every lead will convert; however, lead management gives you a method for identifying, attracting, sorting, and convincing people with a higher likelihood of converting—whether it’s because they were already familiar with your brand or because they fit into an ideal persona category you aim to serve.
Once you’ve successfully encouraged leads to make a purchase, you can look forward to an average customer retention rate of around 30%. This means these converted leads have a 30% chance of making another purchase. This metric is significantly higher than the average ecommerce conversion rate of around 2.5% to 3%.
Types of lead management software
Various software options make lead generation and lead tracking less complicated for sales and marketing teams. These lead management systems can also help you nurture leads, make sense of analytics, and track behavior, demographics, and browsing or purchase history from a single hub.
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Lead generation tools.Lead generation tools can help you identify potential customers and create capture forms, then track leads as they progress through the sales funnel. Examples of lead generation tools include Unbounce, Leadpages, and OptinMonster.
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Customer relationship management (CRM) platforms.CRM platforms are critical tools for organizing and maintaining relationships with both leads and existing customers. They hold large amounts of detailed information about consumers and offer helpful interfaces that make it easier to visualize data. Examples of CRM platforms include HubSpot, Salesforce, and Capsule.
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Marketing automation software. These platforms remove the tedious tasks of manually sending out marketing materials and constructing flows. They can also comb through segmented data to help you send targeted content. Examples of marketing automation software include Shopify Flow, Sender, ActiveCampaign, Zoho, and Zapier.
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Email and messaging platforms. On these platforms, you can send out email marketing campaigns and automated emails, broadcast SMS messages, and track analytics—all through a single interface. Examples of messaging platforms include Shopify Email, Mailchimp, Brevo, Klaviyo, Omnisend, and Attentive.
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Customer engagement platforms (CEPs). You can use customer engagement platforms to create personalized user flows for your customers. These platforms often offer communication methods like email and SMS. Examples of CEPs include Braze, Twilio, Adobe, HubSpot, and Zapier.
What is lead management FAQ
What is meant by lead management?
Lead management means finding potential customers (leads) and nurturing them through the sales funnel with the goal of eventually earning their business. Nurturing these leads involves organizing them through a process called qualification, which can help you learn how to best manage relationships with individual leads.
What does a lead manager do?
A lead manager oversees lead generation and inbound lead qualification, and helps nurture relationships with leads until they convert into customers. Lead managers may focus on specific types of leads, such as sales qualified leads or marketing qualified leads.
Is lead management part of CRM?
Lead management tools are often a part of customer relationship management (CRM). CRM software can be a vital tool for lead management: In general, it collects and analyzes information about leads and customers alike and organizes this into a database. Many CRM platforms have functionalities that support businesses in generating, qualifying, and tracking leads.
