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Getting the Jump on Lead Management Software

A Proven Approach to Implementing Lead Management Systems

A new generation of technology is aimed at increasing the volume of qualified sales leads to be distributed to the sales force. But in order to put that technology to work, sales staff will have to work closely with marketing staff to tackle some long-standing issues. Difficulties with lead management pre-date marketing automation – think of Alec Baldwin taunting his sales team with a stack of leads on index cards in the movie Glengarry Glenross. However, with team cooperation and some software automation tools there are fewer excuses for allowing these difficulties to persist.

A relatively new generation of lead management systems enables marketers to better qualify sales leads, append those leads with additional personal data, and recycle the leads that don't pan out today into nurture marketing campaigns. For sales pros, it should be an era of working more qualified sales opportunities, increasing close rates and earning more commissions. But unless you tackle the long-standing cultural issues that keep marketing and sales from working as a cohesive team, these lead management systems will simply accelerate a broken process.

One of the more subtle powers of lead automation systems is their ability to act as a catalyst for systemic change in how your marketing and sales organizations operate together. Once you know what these software automation tools can do for for the sales team, you'll want to work closely with your marketing staff to make sure they understand how those tools can help them as well.

Where Lead Management Problems Begin

Lead management challenges have existed for any sales person who has ever had more than one lead to work at a time. Starting with lead sourcing, the first problem is that many leads are never captured. "That's probably the biggest issue," says Dave Lee, VP of Sales and Business Development at Infusionsoft. "Instead, they buy lists and cold call, even today. They don't use their website to collect leads, and when they do they often fail to collect enough data to make them useful."

When marketers do collect enough data, said Lee, the qualified leads aren't moved quickly enough to the sales force. Speed can be critical; proof of that can be seen in a study done by InsideSales and Omniture, which found that contacting a sales lead within an hour was six times more likely to result in a closed sale than waiting two hours. Hot leads get cold very quickly.

Its no surprise that sales pros want to receive leads that are most likely to convert first – in other words, they want the hot leads first. But that level of qualified lead accounts for only 2% to 5% of all leads. Marketing campaigns are going to collect leads that aren't that hot, and some of the hot leads aren't going to convert right away. Analyst firm Yankee Group estimated that between 40% and 80% of sales leads are dropped between marketing and sales – that is, they are never followed up. Additionally, Sirius Decisions found that 80% of B2B leads that enter a company's sales funnel will buy a product or solution within two years –from one firm or another.

"The question with that remaining 95% to 98% of your sales leads is not will they buy today – it's when will they buy, and when they do, will they think of you?" reinforces Christopher Doran, VP of Marketing with Manticore Technology, a maker of marketing automation software solutions.

These leads need to be worked, they need to be nurtured, and lead nurturing automation within marketing automation software makes this much easier – as long as those not leads that haven't converted are steered back to the system.

A closed-loop marketing process looks good when it's drawn up on the white board, but it can break down if not fully thought through. If the sales team doesn't return non-converting leads back to marketing for additional nurturing, the process breaks down. If marketing does not get qualified sales leads to the sales team in a timely fashion, it breaks down. And if marketing and sales are working from two (or more) different definitions of what a qualified lead is, it breaks down. Fortunately, two of these three challenges can be automated with software technology. The third is a more complex issue, since it deals with the differing cultures of marketing and sales staff. But solving it doesn't just mean a smoother flow of leads, the results will translate directly into better sales and larger commission checks for sales staff.

Getting Started

Before you propose a marketing automation software solution, you have to address the cultural and business process issues, starting with any misalignment between your marketing and sales teams. Many organizations have the two sides operating with different working definitions of what a qualified lead is, or perhaps no definition exists for either side. Therefore, when marketing hands off leads to sales, they don't don't recognize they are not qualified until they fail to convert at an acceptable rate.

The human issues that have led to this divide have been hashed out again and again. However, it's time to get past them. For sales to believe that its definition or argument is better than the marketing department's is not going to result in getting better leads, more closes or more commission checks.

Before you implement any marketing automation software solution, you need to sit down with the marketing department and reach consensus in what criteria you're looking for in a qualified lead. "Marketing needs to be told what works and what does not," said Chris Frank, marketing director at Treehouse Interactive, a maker of Customer Relationship Management (CRM), Partner Relationship Management (PRM) and Lead Management software tools. "There needs to be a method to empower sales to say what marketing does and does not do to move leads through the funnel."

At the same time, sales people should listen to marketing about the things that they are learning. Use this discussion to develop a clear, measurable definition of a qualified sales lead. Talk about objective characteristics that are indicators of a sales lead who's ready to buy; those implicit or explicit characteristics can be built into the lead scoring of your lead management system. While you're at it, work out a process for your sales and marketing teams to close the loop on leads that don't convert after an initial hand over. Accomplishing this process first is key. Otherwise, you'll simply automate a ineffective processes, which will only help you fail more efficiently. Efficient failure is not the goal.

Since your ongoing relationship with the marketing department will change, it's critical that the two sides get together periodically to review their goals. People do what they are compensated to do; if marketers have goals based on activities, or sheer volume of leads or other incidental metrics, they'll probably deliver satisfactory numbers. But unless those results can translate into revenue, those metrics mean nothing. Instead, consider compensating marketers on revenue achievement; not only will sales and marketing become aligned, but marketing should feel more secure about its role as its contribution will be tied to a concrete metric of the company's success.

Software Technology

Lead management systems come in several degrees of sophistication, complexity and integration with other business software. Many CRM applications have the ability to perform simple lead management functions, however, purpose built marketing automation systems focus on amplifying the effectiveness of lead acquisition, lead scoring, lead nurturing and lead distribution. They also take aim on specific sales issues, delivering leads in a timely manner, routing them to the right sales folks, and monitoring results.

These lead management tools are based on three basic functionalities:

1. Lead Acquisition
2. Lead Segmentation, Qualification, Nurturing & Scoring
3. Lead Distribution

Lead acquisition is the aspect of lead management that is perhaps the best known. It's the basic effort of attracting prospects and customers, and learning as much as possible about them even before the first interaction. Marketing automation systems take much of the manual effort out an otherwise laborious process and thereby increase response volumes from potential leads, and increase the volume of leads.

Lead segmentation is the grouping of leads into categories by analysis based on the data associated with the leads, the age of the leads, and how this information corresponds with your target customer profiles. This allows you to qualify leads, using criteria suggested by both sales and marketing to determine which leads are hot, which need short-term or long-term nurturing and which should be discarded. This is typically accomplished through a process of lead scoring, or assigning numeric values to leads based on a set of weighted criteria. Most companies develop their scoring formulas and point systems to pinpoint leads in the specific context of their buying cycles. This phase also gives you the opportunity to remove duplicate data, flawed entries and other dirty data that can waste time and effort.

Lead distribution takes the lead information and automatically forwards it to the right resource. Qualified sales leads need to be moved quickly to sales people for immediate follow-up. Distribution may be based on the lead's location, industry or other factors which can be aligned with the expertise of a sales resource. Leads that aren't as hot can be returned back to marketing and to a lead nurture campaign automatically. With more advanced automation, "leads can then be rerouted based on things that happened or didn't happen," said Jeff Solomon, senior VP and founder of marketing automation provider Leads360. That includes scenarios where sales staff can't get to hot leads; which may trigger rules in the system to route to a different sales person, or back to a nurture campaign.

Lead distribution should be done quickly, in near real-time if the system is set up for it. As an example, DemandBase is a tool that can send alarm notifications to sales staff when certain leads, or certain types of prospects, visit a company's website. "If you know when it happens, you're more empowered to take advantage of your best lead generator – your web site," said Greg Ott, DemandBase's CMO. "If you wait a few weeks to contact those visitors, your capability to turn those visits into revenue declines rapidly."

Lead Management Strategy

The lead management process to bring these software technologies into your marketing and sales mix will vary on the degree of sophistication of your company, said Kristin Hambleton, senior director of marketing at Neolane, a marketing software maker. "There are different tools suited to different marketers and sales organizations," she said. "It's a little 'different strokes for different folks' – and not one-size-fits-all."

She recommends making any decision around new lead management software based on the relative sophistication of your company and the technical sophistication of the lead management application. "Look at both your size and sophistication," Hambleton said. "Just because you may be a big company does not mean that your lead management needs are complex." Similarly, you will want to match your staff's technical acumen with the complexity of the software tool's user interface.

Although sales reps are not usually required to talk to IT people much, it's an important consideration when bringing in lead management software. "You should understand the applications you have in place and may already be using, especially CRM and SFA systems," Hambleton said. "It is better if your lead management systems do a good job of integrating with those other applications."

The rise of hosted and software-as-a-service (SaaS) lead management systems greatly help with this. "It's a strategy to keep things simple," said Erich Flynn, CEO of Treehouse Interactive. "Software integration is more flexible than ever before, and that makes it possible to create best-of-breed solutions," in which sets of lead management applications are used in tandem to refine qualification and distribution. "The ideal situation is not one where you are managing two tools, but where those tools are visible and usable without the user having to leave his CRM system," Flynn commented. "We've even seen customers using home-grown CRM software systems who are able to integrate our lead management software."

If your company is big enough, you may choose to dedicate staff to monitoring and tuning your marketing automation software. "A lot of companies have CRM administrators, and ERP administrators," said Manticore's Christopher Doran. "How about a marketing software administrator? That isn't something a lot of companies have today, but people may start to look at that as their solutions become more complex."

When you are making the decision, don't become fixated on where your company's marketing programs are today, said Hambleton. "Don't settle for a software tool that's good enough for right now, or for where you'll be in 6 to 12 months," she cautioned. "You could discover your software does not have the horsepower or flexibility to grow with you – especially if these systems have a big impact on the company – and you may not be in a position to retool or replatform at that point." She suggests forecasting where the company could or should be in two to three years.


For both marketing and sales pros, the concepts behind the new generation of lead management systems are not new, but the tasks to automate them have been difficult. With fewer resources available in most marketing organizations, the arrival of these software automation tools will allow you to do more with less.

The secret to success is twofold. On the software technology side, choose the tools that take care of the right tasks for your organization. You probably already have an instinctive knowledge of what needs to be done to improve in the company, or what's taking an inordinate amount of time – marketing campaigns, lead scoring, timely delivery of leads, more precise distribution, effective routing of leads back to nurturing programs – and you should systemically think about these needs, then go out and find the right tools to address these areas.

The second side is bit trickier, because it involves people and change. Step one is to break down the barriers between marketing and sales and getting the two sides to reach some joint consensus that can then be used to build the business rules that will steer the lead management applications.

Finally, you will also want to be ready to change how you operate. "Change is hard, especially for sales people," said Infusionsoft's Dave Lee. "They are often type A personalities, they know what works for them, and they know how to sell. There are a lot of styles and attitudes that make you wonder if sales people can change. But for younger sales people, technological change has been a constant theme for them throughout their careers, and therefore younger reps can adapt faster. For the older sales reps, they have to adapt or die. There's and interesting dynamic there, the older reps can teach the younger how to sell, while the younger reps can teach the older about change."

One thing that speaks to sales people of all generations are performance results. "Nothing beats the capability to point out the story the data is telling," Lee says. "When numbers change, and your sales reps see that, it makes change a lot easier." | CRM Software Blog & CRM Software Reviews