Although closely related to customer relationship management (CRM) software, lead management applications focus on the sales pipeline. With the right tool, salespeople can convert the data into viable leads. Naturally, contact information remains the key component, providing a relationship history record for fueling conversations. However, lead management software differs from CRM software in that it lets you refer to specific customer needs or inquiries that can be quickly converted into sales.

Lead management solutions vary in complexity. While there are some independent lead management tools, most are part of more comprehensive CRM or other sales process automation solutions. This makes sense, considering lead management is part of the overall sales process and, once your leads are identified as opportunities, it's a lot simpler for the sales staff if they can proceed without having to switch to a different application. This is especially important for smaller organizations in which a single employee might handle the entire process, or for larger organizations that have a policy of educating salespeople by moving them from one step of the sales process to another. On the other hand, if the employees who handle leads are usually kept in separate departments from those who complete the sales, then a separate lead management package could work.

What Is Lead Management?

Lead management is the first step of any sales process. Individuals or organizations are identified as having potential in the product or service offered by your business. Lead management helps you guide that entity through the steps that could (hopefully) convert that lead towards an actual sale.

This process is often illustrated as a funnel. At the top of the funnel are the new leads, which have been acquired through a variety of methods: purchased lists, web forms, events, tracked web cookies, social networking, etc. All of those names need to be sifted through, contacted to find out if they are legitimate prospects, and engaged with in an effort to turn them from leads into opportunities for sales. At each stage, names are discarded because they're not real, not responsive, or simply not interested. As a result, the funnel narrows until you reach the other end where you're left with paying customers.

Dealing with the leads at the top of the funnel can be a difficult matter, especially for smaller businesses. A lead that expresses interest and then is neglected can be an opportunity lost. When you are a single salesperson dealing with dozens or even hundreds of leads, it is impossible to track and follow up on them without some help. That's where lead management is critical to the process.

Estimating Your Needs

To choose an appropriate set of lead management tools, you need to first assess how complex your sales process is. A small business with one or two sales agents and a reasonably weighty load of simultaneous leads will not need as wide-ranging a set of tools as a larger business that picks up its leads in bulk and across multiple product or service chains.

You also need to assess your team's abilities and needs. Some of the simpler packages are ready to use out of the box and are more appropriate for startups and smaller companies, while others offer many more features and much more flexibility. However, because they need to be customized to fit into your organization's structure and existing software, the process of integrating them into your system and training your employees to use them will take more time and effort.

There are some things that all of these packages have in common: all offer a snapshot of each individual lead, including their contact information and associations. Each point of contact (email, phone call, etc.) is recorded and immediately available. Future tasks, such as follow-up calls or emails, can be scheduled and notes about the results of each contact can be recorded and referred to. Once appropriate, you can then move that lead to the next step in the process, whether that's to tag them as a "qualified lead" (someone who is a likely customer) or declare them as a failed lead and remove them from the list.

At this point, the difference between simpler and more complex lead management tools makes itself known. Simpler packages work with a single list of contacts or organizations that can then be tagged according to their place in the sales process. If you anticipate that your company is going to be gathering a large number of potential sales, then you should look for a product that separates leads from contacts. Leads are people or organizations that have only just been contacted or who have reacted to an outreach for the first time, whereas contacts have gone through a vetting process and are, therefore, now qualified leads. Packages that offer two separate lists usually let leads be automatically moved to contacts when you mark them as qualified.

When dealing with a large number of possible leads, automation can make the job a lot easier. On the lower end of the scale, a lead management program should be able to import a list of names. Most, if not all, of these packages can associate themselves with popular email programs such as Google's Gmail, Microsoft Outlook, or larger platforms such as Microsoft Exchange. This is so that leads who answer emails can be automatically pulled into the CRM system. These can also be used to enable email marketing campaigns by using templates to contact or send information to leads.

Sourcing Leads

There are other ways to gather leads as well. Some apps can pull names from social networks such as Facebook and Twitter when people comment about your product or "like" one of your posts. (Other apps may use partners or third-party apps to handle social networking data.)

A good lead management product will also keep salespeople and other users on track, letting them know who has been called, who is due for a follow-up contact, and where each potential customer is in the funnel. At the very least, it should remind you of tasks and appointments that you have set for each lead and make sure that you're aware if your sales effort missed contacting a solid lead.

What Is a Sales Pipeline?

One way to track your leads is the use of pipelines. A pipeline specifies the steps needed to turn a lead into a contact and (hopefully) a customer. Pipelines can be very simple, reminding you what the next step should be and enabling you to tick off each step along the way. A higher-end product can automatically send out the appropriate response at specified steps and won't let you go any further unless you have completed any required steps. (For example, a salesperson may not be able to say that a lead is "qualified" unless a document with prices on it has been emailed.)

Because a lead management tool is something with which you'll likely work for a long time, you should take into consideration the future requirements of your company. Even though your needs may be fairly simple this year, if you anticipate having to deal with a large number of leads pulled in from a variety of different sources, then purchasing a lead management solution that can accommodate a wider number of campaigns may be worth the initial investment of time and money. (Be aware that the investment will also include personnel to customize the solution and provide training for your staff.)

Finally, keep in mind the people who are going to be using the product: your sales staff. All of these products include free trials of two-weeks-long to a month-long, along with online Help manuals and training videos. Most also offer introductory webinars by company representatives. It's worth your while to take advantage of these resources before you buy, and to include at least two or three of your sales representatives in the testing, as they know best what tools they will need to turn leads into customers.

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