8 Factors to Consider when Evaluating CRM Software for Lead Management

Customer Relationship Management (CRM) is a concept which inundated the business world in the 1990s with the promise of changing the way businesses would target and interact with their customer base. For many reasons, early CRM systems proved too expensive to customize and to maintain.

Throughout the decade changes continued to CRM systems for making them easy to customize and maintain. Businesses also began to look outside the system – using it as a two way street – providing information back to the customers. This heralded the beginning of such popular programs as Frequent Flyer Miles and stores' loyalty programs. CRM also became a tool for lead generation and not simply customer retention.
Sales automation for faster lead conversions
As systems have become more turn-key and more readily customizable more and more companies are entering the world of CRM. This article will help you define the eight key elements which will enable effective lead management through CRM.

1. Multi-channel lead management Research from Gleanster, a survey based research project out of Evanston, Illinois says the upward of 50% of all leads generated aren’t ready to buy on the day they are first contacted. Lead generation is time and resource intensive. In light of the Gleanster findings you will want to manage these leads going forward.

First, the company must develop a detailed definition of a 'lead' and be sure that all those in contact with the system have a complete understanding of the definition. Once the definition has been established, the sources for leads can begin to be tracked. Common lead generation channels include:
  • Referrals 
  • Online banner or some other form of advertising 
  • Industry directories 
  • Purchased leads lists/ third party information and databases 
  • Commerce web sites 
  • Social network marketing such as Twitter, text and mobile media 
  • Direct marketing including warranty card information 
2. Lead collection and tracking
It is important that the CRM system has the capability to capture information about each and every interaction a customer has with your company. It is not enough; however, to simply capture one source the system must capture the initial source and all intervening customer contacts.

The system must be adaptable to acceptance of new channels and deletion of non-responsive or non-effective channels. The system must accurately record the lead generation channel for future use and analysis. It is through the analysis of this information that a company will be able to determine the number of times they must “touch” a lead prior to consummating a sale.

Simply put, if you don’t know where the customer is coming from you’ll never know where to look for new customers just like him.

3. Business Analytics, Business Intelligence and Key Performance Indicators 
Business Analytics - 
Business Analytics are defined by TechTarget and other sources as an iterative, methodical exploration of an organization’s data with emphasis on statistical analysis. Data driven companies will use Business Analytics to optimize their business processes. Examples of Business Analytics include, but, are not limited to:
  • Exploring the data to find patterns in the relationships which can be applied to customers with similar profiles. 
  • Analysis of a specific result and how that result was achieved.
  • Providing forecasting through predictive modeling. 
Business Intelligence - 
Business Intelligence, while closely related to business analytics is not identical in what is provided to the company, Business Intelligence can be viewed as a system designed to answer the four classic marketing questions of:
  • Who bought from the company 
  • What did they by from the company 
  • Where did they buy from 
  • How many units are purchased in a single transaction 
Where Business Intelligence asks “what happened” Business Analytics ask “why did that happen.” Business intelligence asks “when” while Business Analytics asks “will this happen again.” In many ways, Business Analytics will prove more influential in making solid management decisions as it is predictive and not static information.

Key Performance Indicators -
A key performance indicator is a measure which can be quantified and used to determine how well a company is meeting its operational and strategic goals. The information from Business Analytics and Business Intelligence form the backbone of the Key Performance Indicators. There are several key elements in the defining of a key performance indicator:
  • They are quantifiable – expressed as a whole number or a percentage of a whole number 
  • They are practical – they support the company’s mission and goals 
  • They are directional – they tell a company if their performance is changing in anyway
  • They are actionable – they can be assigned and carried out to specification 
The use of Business Analytics' predictive qualities and the anecdotal qualities of Business Intelligence support and help establish the Key Performance Indicators. The system must then be able to produce management/ staff friendly reports highlighting the analytical aspects of the data, the intelligence aspects of the data and show how these elements support the Key Performance indicators. Reports must be user friendly and adaptable to specific queries.

4. Augmentation of Leads
Not all leads are created equal. Some contain one hundred percent of the information required while other records have missing pieces.

What is meant by the augmentation of leads is that a company fills in the “blanks” in a customer’s profile using resources other than the customer. A primary and simplistic example is an address which does not have a postal or zip code provided. By using the local post office the postal or zip code is located and attached to the appropriate file.’

While postal or zip codes, phone numbers and area codes can be rather simple to acquire and append many of the “blanks” in a customer’s profile are not easily available to the public. In these cases there are numerous third part vendors who supply prospect lists which carry complete customer profiles.

In some cases this data is used solely as an internal update source, allowing the appending of missing data and updating other areas of the profile. They may be used to “clean” the data base of duplicates or files which have become inactive.

5. Lead scoring
All leads do not carry the same potential, therefore, lead scoring can be used to determine which leads have the greatest potential for success.

Before leads can be scored, it is imperative that the company develop and agree on what is a 'high potential qualified lead'. This definition must be developed and agreed upon by all who may have contact with the customer – marketing, sales, and customer service. This definition will highlight the explicit information required on a customer and the information which will require augmentation.

The data will then be looked at for the best matches – what information does the company possess about the person and if based on this information are there any ideal lead candidates. Then data will be looked at for potential “engagement” – what will be required of the company to turn the lead into a sale. Using these two dimensions a matrix can be developed which elevates the most likely candidates to the forefront.

Lead scoring is not a stand-alone or static application. Each time a customer is engaged by the company or seeks out the company it must be entered into the scoring matrix. If the matrix is not updated on a continuous basis the leads generated from it will be moot.

With a multi-departmental CRM solution it must be mandatory that all contact information on a customer be entered immediately so that the lead does not degenerate.

6. Lead nurturing
What do you do with the leads on the matrix that have high potential but are not yet ready to purchase? These leads must be nurtured until such time as they are qualified sales leads. The purpose of scoring and nurturing is to become more effective at closing the deal. The basic approach to lead nurturing: 
  • Focus on the prospect – understand the prospect so that any and all communication with them will be relevant (targeted) to them. 
  • Focus on a consistent message – message reinforcement of a central principle will enable the leveraging of all communications to the prospect. 
  • Focus on the process – be aware of buying cycles and economic turns which can be leveraged to move a lead to purchase. 
A CRM solution will enable the marketing department to maintain their focus on the lead and will provide them with relevant information which will allow the reinforcement of the central principle as defined by the organization.

7.  Lead management process
The lead management process is the conduit by which leads which are developed and nurtured by the marketing department are passed to the sales force for closure of the sale. For lead management to work, leads must be clearly defined: 
  • Demographically –where are your customers 
  • Behaviorally – how often do they purchase 
  • Lead Source – where do your most effective leads come from and is this lead identical 
Once a lead is defined, it must be fostered until they are ready for purchase. The scoring application of the system will enable this process to take place – moving a potential lead up the matrix until it is ready to be passed off to the sales department. The marketing or services department which forwards a lead must also provide the sales department with all relevant information about the lead. In turn, the sales department then takes on the task of cultivation until the lead is ready to purchase.

The CRM software should be designed to accurately provide timed information which will support the lead management process

8. Integration and APIs 
The ability to integrate with a third party system provides access to leads which may not be in the immediate target market – but have high potential to move into this target. With this integration every opportunity has the ability to be realized and converted in real-time. APIs or application programming interfaces allow the CRM software to request other software systems to provide data or perform services which are not part of your usual system.

Integration of a CRM solution and one or multiple APIs allows for a closed system of marketing. Through integration the first seven elements can be enhanced and expanded, providing a competitive edge in the market place.


3 comments:

  1. This is my first time visiting here and I must say that I'm impressed. Reading a lot of different topics all in one place is very helpful.

    Business Marketing Research

    ReplyDelete
  2. Nice posting "CRM Systems Ireland " .. This is the first time I have come across your-site. Post info, I’ll be back soon. Thanks a lot!

    ReplyDelete
  3. I got very useful information from this posting and really it’s very impressive. It has been proven that the average person is increasingly becoming tech-savvy. CRM plays a key role to improve the lead management and to increase sale.

    ReplyDelete