Lead management

Lead management

Quick definition

Lead management is the process of identifying potential customers and nurturing them through the conversion funnel to drive new business.

Key takeaways

A lead is a person or a group of people who are in a company’s target customer profile or who have expressed interest in your product or service.

Once both the marketing and sales teams have determined that a lead has a good chance of becoming a customer, they become an opportunity with an associated dollar amount.

Lead scoring is used to determine the value of a specific lead and how the company should interact with them.

Lead management software, also known as marketing automation software, streamlines the sales process and improves communication between marketing and sales.

Bob Conklin joined Adobe through the Marketo acquisition and is a leader within the Adobe Experience Cloud strategic marketing team. Prior to Marketo, he led global marketing for large, multibillion dollar businesses at other tech brands including Oracle and HP.

What is a lead?

What is the difference between a lead and an opportunity?

How do companies define their target market?

What is a lead process?

How does lead management work?

How can companies optimize lead management?

What problems do companies run into when managing leads?

Q: What is a lead?

A: Generally speaking, a lead is a person who you have some reason to believe might be interested in buying from you or interacting with your brand. They're in a particular audience segment or they've shown some interest in your product or service. They're a person you feel could potentially buy from you.

In B2C marketing, you're typically marketing to one person. That one person is considered a lead until they either buy from you or don't. In B2B marketing, you're usually dealing with multiple people. You're selling to a business. There’s usually a buying committee of multiple people making that decision to buy something. In business to business, you have multiple leads that you're trying to convince to buy your product.

Q: What is the difference between a lead and an opportunity?

A: A lead doesn’t have an expected dollar value associated with them. It's a person that we may sell to, but it’s not at a place where we know what that might be worth. You put a lot of leads in the top of the funnel, and some of them aren't qualified or interested, and they go away. As you move down the funnel, you have more and more qualified leads. Those become sales leads. Once sales teams connect a dollar amount with them, they're referred to as opportunities.

Some of this language is tied to software. A lead is usually a term that you'll see in marketing software. Once it goes to sales and sales puts a dollar amount on it, it's considered an opportunity and called an opportunity in CRM products that salespeople use.

But there's a different way to do things, which is becoming increasingly popular. Instead of casting a wide net and pulling these leads through the funnel, you can look at your market and say, "Okay, what's my total addressable market? What's the size of my market? Who can I sell to? Who could potentially buy my product?" And then you say, "Okay, well it's these thousand companies that might buy from me, and maybe each of those is an opportunity worth X dollars." And then you pursue them from there.

There are some approaches where the opportunity is defined at the beginning. That's something you see more in B2B companies. You see it more when you have a tighter defined market where instead of having a million potential customers, you only have a couple hundred. It's easier to actually quantify the opportunity up front and then pursue the people.

Q: How do companies define their target market?

A: There’s so much data out there right now. There are artificial intelligence (AI) tools that look out at all the data across the internet that defines who these different companies are. These tools can look at a market and, based on a profile of who you're selling to, identify who your ideal customers are and identify the list of accounts that will make the best leads. Before these recent advancements, you might have the marketing and sales teams arguing with each other about who the target accounts are and which ones are most important. Now, there's a lot of data that can be called upon to provide those answers pretty quickly.

Q: What is a lead process?

A: The core concept of the classic lead management process is using lead nurturing to move a lead through stages. It starts with the general populace. Sometimes, that first touch you get is someone coming to your website as an anonymous visitor. Most people don't consider that a lead yet. They consider it a lead when the person, for example, fills out a form giving the company permission to email them, or the completion of some other behavior that signals they may be interested in continuing the conversation.

The classic lead process is described as a marketing and sales funnel. At the top of the lead generation funnel you have a broad ideal customer profile, or ICP. You have the types of customers you know you're going after. And some of these customers visit your website or view your ads. Then they opt into your messaging, usually by filling out a form. Now you really know who they are. You have their contact information and you have their permission to communicate with them. Most people would say they're leads now. They're known. They're in the marketable database.

The step is determining if the leads are marketing qualified. What kinds of behaviors are they exhibiting? Are they reading our content? Are they responding to what we're sending them? Are they coming back to our website? If they're on our website, what are they looking at? All those things go into a lead score, and then that lead score determines whether that person becomes a marketing qualified lead (MQL) or if they’re not quite ready to be that yet.

Once the lead is considered to be engaging with us, and if it's deemed marketing qualified, the next step is to send it into the sales pipeline. Sales reps look at the lead. They look at all the information, they follow up with the customer, they ask questions, and they try to figure out after really talking to them if the lead is truly qualified. Do they really have the budget to buy what we sell? Does the person we’re talking to have the authority to make the decision? If they decide the answer to these questions is yes, the lead becomes a sales qualified lead (SQL). At that point, sales will enter a dollar amount, and the lead becomes an opportunity. And from there, we either win or lose the sale.

Q: How does lead management work?

A: Lead management almost always requires marketing automation software. It’s difficult to manage leads manually. Some companies do try to do lead scoring in a spreadsheet, but they have to pull in all the information about their customers and analytics from multiple channels. At a certain point, you can’t do that at scale. Lead management is one of those cases where you literally can't do the process without the right lead management tools.

Since lead management requires the sales and marketing teams to work closely together, a big part of the project is linking the marketing automation software with CRM software so the leads can be passed back and forth and the data can be shared. Since the marketing software is integrated with CRM and sales works in CRM, the marketing team can send over to the CRM all the data about a customer's prior engagement. Sales can see that a customer looked at a webpage and they read this white paper, and then they can move forward with the lead.

Q: How can companies optimize lead management?

A: The number one thing is measurement. You need to look at all the different touchpoints and figure out what’s working and what’s not working. Today, we have really good capabilities around what we call multitouch attribution. In a B2B customer journey, you might have 10 different people involved in making the decision, and they're each engaging with different communication channels and content. When you close the deal, you have to determine which touchpoints made the most difference with which of those people. The software is getting better at looking back and attributing revenue to the right touchpoints.

Once you know which touchpoints are making a difference, that starts to influence your scoring model, which influences how leads are flowing through your funnel. And that's really important because you only want to give qualified leads to sales. Otherwise, it kills the productivity of the sales team, annoys customers, and wastes everyone's time.

Q: What problems do companies run into when managing leads?

A: The classic problem companies face is sales complaining that the leads provided by marketing are no good. Lead management software has managed to solve this problem somewhat, as it forces both teams to decide from the beginning how to define a qualified lead. Even though complaints never fully go away as a problem because it's easier for people to blame each other. It’s much better than it used to be, though, because the process forces conversations between the marketing and sales functions. If disagreements still happen, it means they need to keep working together to refine how they define a qualified lead.

Companies can also run into problems with how they manage the funnel. Usually you have some set of sales capacity, and they can only handle so many leads. They can only talk to so many people in a day. So people get into trouble if they're not managing the funnel and having the right number of leads at the right stages of the funnel. Some businesses have very long funnels because it's a long buying process, while others have a short buying process. Depending on what you’re selling and who you're selling it to, the management of how many leads are in each stage of the funnel at any given time is really important.

If marketing spends a ton of money and runs a huge campaign to generate a large number of leads, and they're all coming through the funnel at the same velocity, suddenly you have this giant bubble that’s too big for sales to swallow. So you have these customers you just warmed up to have a conversation with sales, but the sales team isn’t calling them because they have too much to chase. But good lead management software should have analytics built in to keep an eye on that and to be intelligent about when to generate leads.

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