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How to Use a CRM for Lead Management

Max Freedman
Max Freedman

CRM software helps streamline your lead management process and ensure valuable prospects don't fall through the cracks.

  • Lead management comprises all the steps you take to move potential customers through your sales pipeline.
  • Lead management minimizes the number of leads you neglect and keeps you in communication with meaningful prospects.
  • CRM lead management automates several steps in the process, enhances data analytics and centralizes all your information.
  • This article is for business owners looking to use CRM software to improve their lead management practices.

Without an effective lead management strategy, you'll be more likely to miss certain prospects that could be great for your business or focus on leads that were never promising in the first place. You'll also struggle to distinguish these groups from one another without CRM software to streamline your lead management strategy.

What is lead management?

Lead management is the process of moving a sales lead or prospect from one stage of your sales funnel to the next. You can manage your leads by keeping constant tabs on new inquiries, pairing leads with a company sales rep, and recording all leads' interactions with your company. As part of lead management, your lead's sales rep should also qualify and score the prospect and regularly reevaluate their assessments.


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What is the importance of lead management?

At its core, lead management is the art of turning potential customers into actual ones. In practice, though, lead management involves more than just conversion. It's also the tricky balance of pursuing new customers, communicating with current prospects, and making sure that no leads fall through the tracks as you do both.

An example of this balance may best explain the importance of lead management. Suppose that, after some highly favorable recent media coverage, your company receives an onslaught of new leads. You'll now have to balance tending to the prospects you were already nurturing with qualifying, scoring and nurturing all kinds of new leads. Without an effective lead management strategy, you're more likely to neglect or entirely miss promising new customers.

Overlooking new leads often results in failure to realize potential revenue. That said, not all leads are worth pursuing, which is the entire premise of lead qualification. By using CRM software to manage this process, your company becomes far more likely to track all meaningful leads, move them along the sales pipeline, and ultimately make sales.

Key takeawayKey takeaway: Lead management is important because it prevents leads from slipping through the cracks and keeps you in communication with meaningful leads.

How does the lead management process work with CRM?

CRM systems and lead management go hand in hand. The best CRM software makes it easier to harness the benefits of lead management, such as these:

  • Lead qualification and scoring. CRM software is crucial for properly qualifying and scoring your leads. Without CRM, you can't centralize lead scores for your entire team to see, and this absence hampers your sales approach because your team can't prioritize accordingly.

  • Lead information. With CRM software, you can pull up everything you need to know about a lead on one screen from within the same interface. This function is a big step up from creating separate documents for each sales lead or keeping paper records only.

  • Sales rep accountability. No sales rep is perfect; even the best ones have room for improvement. Such improvements are part of lead management since, for example, improving a rep's average response time can lead to more satisfied leads and thus more sales. CRMs can track response times and other statistics that keep your team accountable and highlight areas where improvement is needed.

  • Lead reporting. If you kept all your sales data in separate documents outside a unified system, you'd need more time and brainpower to figure out that most of your leads belong to certain demographics. With CRMs, not only do you store this important lead management data in one place, but you can also generate reports on these insights in just a few clicks. You can use what you learn to plan demographic marketing strategies that cater to the groups to which your leads belong.

Key takeawayKey takeaway: CRM software offers functions for qualifying and scoring your leads, storing each lead's information, and tracking data such as each sales rep's numbers and each lead's demographics.

How does CRM help at each stage of the lead management process?

To further understand why using CRM software is best for lead management, let's look at each step of the traditional process and see how CRM plays into each stage.

1. Lead capture

The lead management process begins with lead capture, including through lead capture forms. Without CRM software behind your lead capture form, the lead data you receive might sit in some digital location awaiting manual addition to your sales records. With a CRM, the information from each form is automatically added as a new contact card to your database. Some CRMs will then auto-generate tasks for contacting the lead.

When you do contact your lead, you can do it directly from your CRM. This function also enhances your lead management because the software automatically links these communications to the lead's file in your CRM. This linking enables you to track a lead's activity and interactions with your communications.

2. Lead enrichment and tracking

The information that a prospect enters into your lead capture form is often basic: name, company and pain points. In the lead enrichment and tracking stage of the lead management process, you'll work to fill in all the gaps between these data points. You'll do this using the information you can find on the lead's company website, LinkedIn and other public sources, or your CRM can sometimes automatically find and store this data for you.

Hand in hand with this enhanced knowledge of your lead goes the tracking of all their interactions with your company. Although you can individually track your leads' interactions with email marketing software, website back-end data, and social media analytics, your CRM software does this all in one fell swoop. As your CRM tracks your lead's brand engagement, you'll learn more about your prospect's wants and needs.

3. Lead qualification

Lead qualification primarily involves engagement tracking and lead data analysis, and CRM software can significantly expedite both of these tasks. [Learn more about lead qualification and what separates promising leads from unexciting ones in our article "How to Qualify a Lead."]

4. Lead distribution

Here's where lead management can get tricky. Certain events can trigger an overwhelming influx of new leads. CRM software can help you tend to this increase in leads. You can use the software to set criteria that automatically pairs new leads with appropriate sales reps. This way, you'll have an immediate strategy for getting leads to the team member best suited to move them through your sales pipeline. You'll also save the time of speaking with your team to determine who can take which new leads.

CRM lead distribution also enhances your multi-territory sales process. You can set your CRM to designate new leads from a given region to a certain group of sales reps automatically. Your CRM will then choose the right rep from this group based on other criteria. This way, a rep based in your second office isn't working with someone located near your first office, for instance.

5. Lead nurturing

Although often conflated with lead management, lead nurture is just one part of the lead management process. It comprises everything that happens after you capture, enrich, track, qualify and distribute prospects. Lead nurturing activities include creating targeted content, communicating consistently across many platforms, and more tasks for which CRMs are primed.

With CRM lead management, you can personalize and coordinate all communications. You can also track all lead interactions with your communications and content to best understand where the prospect lies along the sales pipeline. Without a CRM to automate and streamline your lead management, you're seeing an incomplete picture of your leads – and that's no way to generate sales. CRM lead management gives you everything you need to maximize your chances of conversion and make the most of your sales approach.

Did you KnowDid you know? CRM software helps with each phase of lead management by allowing you to set certain criteria, automate parts of the process, track all lead information, and generally make the process easier for both sales rep and customer.

Image Credit: shironosov / Getty Images
Max Freedman
Max Freedman
Business News Daily Contributing Writer
Max Freedman is a content writer who has written hundreds of articles about small business strategy and operations, with a focus on finance and HR topics. He's also published articles on payroll, small business funding, and content marketing. In addition to covering these business fundamentals, Max also writes about improving company culture, optimizing business social media pages, and choosing appropriate organizational structures for small businesses.