CRM - A Priceless Corporate Asset
by Edward Obuz
- Executive Summary
- Lead Management: An Age-Old Process
- A case for Technology to Optimize our Lead Management Process
- Benefits
- Conclusions and Recommendations
Optimizing Lead Management to Increase Revenue
Customer management software is great for consolidating information about the customer.
"The Client" spends a significant percentage of revenue on marketing campaigns designed to generate even more revenue. A large part of that effort is dedicated to creating leads or opportunities to be pursued by brokers and assistants. The process of acquiring customer leads, turning the leads into solid prospects, and converting the prospects into sales-all without losing track of potential leads-remains a major hurdle for our businesses. Filling the gap between a lead and new account, and thus preventing opportunities from falling through the cracks, is a critical competitive mandate for our marketing and management department.
We must address the gap between marketing automation and sales force/broker automation that still exists even within our technologically advanced companies. As you mentioned in your email dated February 20, 2003, Lead Management, we must establish metrics that will aid us in calibration our objectiv and measuring our results. To elevate our lead analysis from tracking response rates to measuring close rates, contract values, and profitability by each campaign. Unfortunately, our processes struggles to provide a system that can generate such vital information, and provide guidelines for appropriate action. In fact, research shows that most companies lose track of between 40% and 80% of all leads somewhere along the sales cycle. Is that happening to us? Do we know for sure?
This Report identifies the current holes in the lead management process, improvements or benefits derived from implementing a lead management system, and how marketing campaign return on investment (ROI) is an essential tie into lead management optimization.
Lead Management: An Age-Old Process
In many companies, the acquisition and distribution of leads to sales or channel partners is marketing's responsibility. Leads come in from multiple sources: sales, advertising, direct mail, trade shows, call centers, Web site, articles, referrals, and telemarketing. Marketing develops campaigns, campaigns generate demand, and this demand generates sales opportunities. At the point of hand-off from marketing to sales, leads commonly get cold. Marketing keeps sending over leads, but receives little or no feedback on their status. Over the past few years, I have reviewed many reports discussing the conflicting dynamics and disconnect between sales and marketing.
The sales force historically ignores leads from marketing for a variety of reasons. Marketing creates the leads, but the sales department continually bemoans the lack of quality leads. The bottom line is that marketing efforts are generating low numbers of qualified leads. Even if the lead is good-could it be that we might not be able to get the right lead to the right person at the right time in order to convert it into a new account?
For example, our company could potentially push out thousands of leads per month with multiple points of customer contact and varied communication tactics such as, print media, consumers shows, the Website, and multiple direct and indirect marketing efforts (refer to diagram "who use CRM). "The Client" has a complex business process that must be more efficient to ensure that no opportunities are lost in the shuffle and that customers are contacted about their needs, FX, hedging, speculation, managed futures, institutional, etc. We must leverage our marketing process in order to understand which marketing vehicles are successfully creating new opportunities, but also to gain insight into the needs of our changing customer base.
Currently we have a manual process to pass a lead to a broker, but we never know the final status or if the prospect opened an account. This processes is fragmented, unstable, and inefficient, allowing leads to fall through the cracks, be sent to the wrong people, disappear in some software solutions, never to be seen, or lack sufficient information to make them meaningful. Leads commonly get passed off manually to a broker via a fax or e-mail, with no automated process to track the end result.
For "The Client" to effectively manage leads, we must generate more qualified leads, automatically distribute those leads to the right person, track the progress of those leads, and then manage the progress to ensure that they were acted on appropriately.
A case for Technology to Optimize our Lead Management Process:
Altering the lead management process will directly affect all our marketing operations. As a marketer defining a business process around lead management that is focused on optimizing sales and marketing is critical for consistent follow-up and measuring the ROI of our marketing dollars.
- Plan; marketing must work with account opening professional to plan, train and develop a business process-from targets to the process of lead distribution
- Collect; housing leads in a consolidated data mart that stores the history of "The Client"'s interactions with that lead, prospect or customer
- Enriched with information; The concept of adding information to a lead to enhance the enterprise's ability to properly qualify the lead is comparatively simple. Nonetheless, fewer than 60 percent of the enterprises that practice lead management bother to enrich their leads with data beyond the lead source. Best practices of enterprises that do enrich their leads include noting the type of lead, adding any associated product or service interest information, and appending data on the individual prospect.
- Qualified, and assigned a score or rank;
- Assign and route; if it is a "warm" or "cool" the lead at this point must take one of two paths, it must be matured through additional marketing initiatives such as telemarketing, direct, or email-each one looping the lead back through the process to determine when its qualification rank increases to a "hot" status When it does, the lead should be again enriched with the latest valuable information to help the broker move the lead through to closure. Then the lead should be assigned and routed to the best broker for that lead, watching to ensure that initial contact is made in a timely fashion.
- Notify and deliver;
- Watch, alert, and reassign (if necessary);
- Close; and
- Measure ROI
Benefits
- Broker conversion to client automation
- A repository of customer data able to store vital profiles
- Improve broker and partner lead-generation efforts and produce more qualified leads
- Better capture and routing of leads, along with improved assignment and visibility
- Improving the manual processes and limited lead acceptance and follow-up practices
- Will see an incremental increase in closing rates
- Demonstrated substantial opportunity to increase revenue
Conclusions and Recommendations
Lead management is clearly a significant pain point within most companies. Identifying opportunities and ensuring their success is as critical as trading expertise, negotiating and closing the deal. Poorly executed campaigns will not only waste marketing dollars, but also create lost opportunities due to the amount of time a broker can spend on bad leads.
"The Client" should consider the following:
- Automate the sales cycle to ensure that dialogue does not get dropped and leads are maturated accordingly. While the lead management clearly provides more sophisticated best practices aimed at resolving this problem and increasing company and broker revenues.
- Implementing a point solution that only addresses marketing or sales might not solve the increasing disconnect between the departments and their processes. Intelligence in one system is difficult to integrate and share with other systems, and any integration that is achieved is far from seamless. Best practices in lead qualification - enabled by, but not limited to, the use of technology - can improve close rates and reduce demand on enterprise resources. By clearly defining their qualification processes, "The Client" can ensure that the right information goes to the right place at the right time in the right department.
- Technology is only part of the problem. Sales and marketing incentives must be aligned and integrated with compliance and training. The issues of compliance, broker training, lead aging, conversion rates, and forecast accuracy must be addressed jointly.
- Brokers are not willing to learn new systems without direct rewards to their bottom line. We must provide quality and quantity of leads to insure broker adaptation of system. Lead generation can deliver significant benefit, but only if it is based on sound lead management planning that aligns business needs with resource availability.
- Lead management planning must precede lead generation as an enterprise wide strategic requirement, not a tactical issue. Best practices in lead management demand a cross-functional approach that focuses not just on generating leads, but also on determining their quality and value-and how they can be used and acted on most effectively.
- Best practices in lead maturation can deliver significant benefits: improved quality of leads, more-cost-effective deployment of sales and marketing resources, and increased credibility within the sales organization.