Lead Management Finally Explained in One Blog Post
Marketers often use terms like lead management, generation or nurturing, even though the understanding of these terms may be different for each person. Even professionals might have trouble explaining these terms if they haven’t run lead-oriented campaigns yet. If you’re interested in these strategies, you need to become familiar with the terms below.
Basically, a lead is a person who needs a particular product or service and is looking for a way to fulfil this need by interacting with a vendor or provider. We call a person a lead after they convert, which means they shared their data with a company for further use. These potential clients are very valuable to all businesses as they are almost ready to purchase. Mind the word almost – a lead can change their mind about the purchase or buy the product from your competitors.
This is why the road to convince the lead to buy can be long and hard, especially when leads are managed only by sales without the support of marketing. To make this easier and increase the possibility of selling a product, you can bring lead nurturing into play. Leads build a priceless customer database you can utilize in multiple campaigns—educational, promotional, product-oriented and many others.
You can divide leads into three groups:
- Hot leads – customers who are ready to purchase, which means you need to contact them before your competitors do so.
- Warm leads – these customers are interested in a product but not ready to make a purchase yet. They might turn into hot leads after a successful lead nurturing campaign.
- Cold leads – people who might belong to your target group but haven’t shown interest in the product yet, not to mention the purchase. Overloading them with marketing content may be intimidating. Instead, timewise and unobtrusive lead nurturing can turn them into warm or even hot leads.
Lead generation is basically collecting customer data (both contact and personal) and combining them into a database for sales and marketing purposes. The word “generation” may give you the wrong impression because leads do not come out of the blue. New leads come when a person performs specific actions and makes a choice to entrust a company with their data, for example when signing up for a newsletter or downloading free content.
The truth is nobody likes filling out forms and giving away their sensitive data, especially to companies they don’t know well. It’s easier to convince them by giving something in return after submitting the contact information. The incentives are usually exclusive materials, such as demo versions or bonuses.
Not everyone who agrees to receive commercial messages is ready to become a customer. Some shared their address to get an ebook, or they work for your competitors. Others are interested in a product, but they’re not ready to buy for a number of reasons. If someone like that gets direct contact from a salesperson too soon or too frequently, they will almost certainly be less likely to engage with you further.
Lead nurturing (also known as lead marketing or drip marketing) is building relationships with potential customers even if they’re not interested in purchasing at the time. Lead nurturing is primarily based on sending messages to potential customers in different intervals, usually through emails, but also through other channels. Such campaigns enhance their awareness of your brand and guide them towards making a purchase.
Customers don’t like advertising targeted towards a broad audience, which explains the popularity of ad-blocking software and marking branded emails as spam. On the other hand, many customers are fine with receiving offers and don’t treat them as spam—as long as the offers are personalized.
Personalization means that marketing communication is based on the perspective of a single customer and addressing each message so that the customer finds it useful and valuable.
Deep personalization, based on behavioral data analysis, carries the highest value for both the marketer and the customer. It lets marketers send information that customers really want. This can be achieved using marketing automation tools. The most advanced cases of personalization involve sending automatically generated one-on-one messages based on customer behavior.
How do you know when or whether a client is ready to buy? Marketing automation and scoring have the answer. They work in the form of a series of algorithms that assign points to customers when they complete certain actions. The scoring system may include, for example, the frequency of website visits or activity in social media profiles. It takes into account the total amount of transactions made online and offline for a certain period of time.
All criteria (formal or implicit) should be divided into categories according to their relevance and each of them assigned a certain number of points. For example, our division and valuation of criteria might look like this:
- the most important criteria (10 – 15 points)
- very important criteria ( 5 – 9 points)
- valid criteria (1 – 4 points )
- negative criteria (negative)
Companies implement scoring in order to be able to predict which customers are currently the most motivated to make purchases. As a marketing activity, scoring brings visible sales effects and that is why its implementation requires cooperation between the marketing and sales departments.
The bigger the impact a given factor has on a purchase, the more points you should assign to it. Moreover, the purchase of different products may be followed by another type of behavior. Think about different scores depending on the product category, even for the same client, and gather as much information as possible.
The sales funnel is a common term in the field of marketing, especially lead nurturing. That’s because the sales funnel determines the type of communication received by a customer.
The shape of the funnel represents the decreasing number of leads who become clients in the nurturing process. Leads drop out on each stage of the funnel, which is a natural process—only a fraction of potentially interested leads will end up making a purchase.
Sales funnel stages
A typical sales funnel is divided into four stages:
- Awareness. A potential client slowly starts noticing a certain business need but doesn’t know what products or services could fulfil it. From your company’s point of view, the most important step is to build brand awareness, attract attention and make yourself memorable.
- Research. When a customer realizes their need, they start an online search for a product that could satisfy it. Some people spend a lot of time on research and it’s one of the longest stages in the sales funnel. You may approach customers in this stage with free materials.
Delight them with free educational materials or provide reviews from your other happy clients. At this stage, you can introduce the client to the sales representative and start the sales process.
- Purchase. It’s time for a call to action and extra incentives, such as a time-limited offer, free trial or discount code. You need to take care of the customer right after the purchase, too—it’s the perfect time to thank them for their choice and trust in your brand.
- Retention. This isn’t included in a typical sales funnel, nevertheless, you mustn’t forget about this stage as it crowns the sales process. The first purchase is a success, but returning clients are gold that guarantees the performance of your business.
In order to increase the chances that a customer will make another purchase, consider a lead nurturing campaign directed towards this group. Inform them about new offers, send dedicated discounts, educational content or invitations to events.
It all comes down to… lead management
Lead management is an interesting thing to do – you may generate leads and nurture them without even knowing the difference (or the name of the activity). But once you’re set with the terminology, you can move on to choose your tools and methods in a more effective way by designing a sales funnel or employing a scoring system. With all things clarified, take a closer look at your existing campaigns or review the one you’re planning to run. The lead-centric approach may help you spot new opportunities to attract more clients and develop your relationship with them.