Few people understand the true function of sales lead management. Sales lead management is many things to many people and departments, but for most of them it is a tool, a process, and a sales activity function. However, not all of these people know it is revenue management. Do it well and reap triple the benefits of your competitors; do it poorly and your company competes the hard way.
Sales lead management is the administration, data-basing, and distribution of inquiries and qualified prospects gleaned from lead generation programs. Within the keyword, ‘administration’ are hidden the multiple tasks performed by many marketers and marketing communicators who seek to qualify and nurture the potential customer. This process continues until the salesperson receives the most qualified lead, ready for his or her intervention into the buying process. Dozens of people, if not a dozen departments, within sales and marketing management software tools and processes to create the final prospect.
Why it Matters:
“Sales Lead follow-up is revenue management.”
Software and tools include CRM, marketing automation, content management, business intelligence, and telemarketing software, including dialing programs, etc. Departments include all of the specialized marketing lead generation people and processes that continually poke, prod, question, pursue and educate prospects until they are ready to purchase. This can occur in hours, days, weeks, months, or years. With increased frequency, marketing ROI is being taken seriously as a function of marketing, but Marketing doesn’t always recognize that it is the management of the leads that lead to ROI and revenue. The better marketers believe it; the not-so-informed ones suspect it but fear to prove it.
Sales lead management is CRM management of the prospect and keeping the prospect in the narrow confines of the sales funnel. The salesperson makes the most crucial mistake at this stage if he or she thinks that follow-up is optional; with this attitude, almost to a person, they fail. These salespeople will work longer hours, have a hard time making quota, and their jobs will be at risk. The rule is that 45% of all inquiries turn into a sale for someone. When salespeople fail to follow up 75% of the leads, they reach only 25% of potential buyers. The rest are serviced by competitors. Salespeople give all manner of excuses as to why they do not use the CRM system or follow up, but every excuse is just that – – an excuse that leads to less than optimal performance.
Why it Matters:
“Companies that refine and manage their sales leads better than their competitors will gain market share faster, by a factor of 2X-3X.”
To Sales Management…
Sales lead management is something Marketing does that may or may not help the salespeople consummate the sale. Many sales managers feel Marketing “over-qualified” prospects, and that many of the inquiries are shrouded in the churn of the marketing funnel. Or, they feel that prospects are not qualified enough. Inquiries may not progress because they are not sales-ready, and will fall out before being handed off to Sales. For sales management, the management of the various system tools by Marketing is necessary because, with a few exceptions (called field marketing managers), no one in Sales is ready to take on CRM/marketing automation/business intelligence and lead generation functions. Sales operations within sales management may include sales/systems engineers, sales forecasting, and product specialists, but certainly not marketing IT tools. Sales management does not believe that sales lead management is revenue management.
To the President…
Sales lead management most likely involves tools managed by Marketing. C-level managers have forgotten if they ever knew, that 45% of all inquiries turn into a sale for someone, and if follow-up were 100%, sales would substantially increase from the marketing dollars spent on lead generation. The president does not realize that sales lead management is revenue and forecast management. Ah, the “F” word; yes sales lead management is also forecast management.
To the CFO…
Sales lead management is the cost of the tools that Marketing and Sales need. It includes the consulting expertise that goes into customizing the tools. In other words, it’s overhead tagged on to lead generation, and they are also suspicious of that function. Certainly, the CFO fails to understand the link between inquiry generation and sales lead management being the key to managing revenue (and the forecast).
The Result: No One Looks at Lead Management as Revenue Management
As you can see, the list of benefits diminishes as we view each department’s understanding of sales lead management processes and tools. With few exceptions, these experienced managers don’t consider that the management of potential customers is revenue management.
Sales lead follow-up is revenue management. CRM is revenue management. Marketing automation and business intelligence for lead qualification are revenue management. Every tool and effort to qualify the future customer is revenue management, and it’s called sales lead management. It isn’t enough to find prospects; you have to manage their expectations and perceptions of you and your products better than your competitors.
Companies that refine and manage their sales leads better than their competitors will gain market share faster, by a factor of 2-3X. Once all management ranks understand that the multi-faceted function called sales lead management is really revenue management, many wondrous things occur:
- Marketing expenses are reduced as the company spends more on sources that produce qualified leads and less on those that don’t.
- Salespeople close more business. As their follow-up increases from 10-25% to 90-100%, so will sales.
- Sales forecasts are accurate and reliable; this ‘waterfalls’ into other departments that can count on cash flow and inventory management.
- Salespeople make quota and are more successful, which contributes to a reduction of sales representative turnover, which reduces sales expenses.
Of course, more money is spent on tools and prospect management today than a few years ago, but that’s minor compared to the increase in revenue. That’s because now everyone understands that lead management in all of its permutations is really revenue management.