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A business receives a lot of leads every single day, however, not every lead gets converted. And even from those who get converted, how many actually stay retained for the long term? According to Harvard Business Review, “acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one.” Well, this is where the importance of maintaining strong customer relationships comes into the picture. But how do you do that? Well, a lead management tool can help you nurture customer relationships and thus boost sales and revenue. This specialized software offers various features to transform the chaotic sales process into a smooth and streamlined one.
Through this blog, we aim at educating you about how a lead management tool can help you build long term relationships with customers.
Let’s get started!
What is a Lead Management Tool?
A lead management tool is basically a software application designed to help businesses manage leads right from the beginning (contact) till conversion. Such software is not just about managing names and numbers of potential leads, but a lot more than that. These software play a significant role in the entire sales process, such as organizing information, tracking and nurturing leads, automating tasks, and providing useful insights.
In other words, all the sales related tasks that you and your team have been doing manually, putting a lot of time and effort, can be seamlessly done using a lead management software. Not only your sales reps will experience increased productivity but your sales conversions will also be boosted significantly.
Features of a Lead Management Tool
Understanding the features offered by lead management tools will help you gain more knowledge about their role. Here’s a brief about some of the key features, one by one:
Capturing the Leads
A lead management software automatically captures the leads and related information from various sources. While website forms are one of the primary channels, other sources include emails, social media, etc. The tool stores and organizes the list of potential customers, reducing the need for manual work and the chances of errors.
Assigning Scores to the Leads
The list of captured leads and their relevant information is then analyzed by the software. Upon analysis, it assigns scores to the leads based on their likelihood of getting converted. Leads that are more likely to convert into customers are assigned a high priority score, while those with lesser likelihood are assigned a low priority score.
Nurturing the Leads
Another significant feature of lead management tools is lead nurturing. There are various ways, including targeted email campaigns, autodialing, follow-up notifications, and alerts, that help sales reps nurture potential leads throughout the sales funnel.
Providing Customer Insights
The analytics feature of lead management tools performs analysis into lead behaviors, actions, engagements, etc. Based on this, it generates insights such as ongoing trends. Making use of this data, sales managers can improvise their strategy for better results.
How Lead Management Tools Improve Customer Relationships?
Do you know that “86% of buyers are willing to pay more for a great customer experience”? There are several ways in which a lead management tool helps a business in creating exceptional customer experiences and thus stronger, more lasting customer relationships. Here’s how:
Provides Personalized Customer Communication
Quote - More than 85% of customers want to experience proactive communication and contact from a business.
A lead management tool segments leads based on different aspects such as location, interests, etc. Based on this, it sends tailored content such as personalized email messages to customers. Such targeted messaging ensures that customers feel valued by the business. Also, lead management software sends automated reminders and notifications to help the sales team stay on top of follow-ups, ensuring that no leads are missed.
Insight – “72% of customers will share a positive experience with 6 or more people.”
For example, a clothing brand uses lead management software that segments the leads into various groups such as dresses, Kurtis, skirts, jackets, etc. Personalized emails are sent to those who frequently browse the dresses section, offering them a special discount. Customers who reside in colder regions will receive emails promoting winter jackets, while those in warmer areas get recommendations for kurtis.
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Helps in Enhancing Customer Experience
Quote - 41% of companies miss out on potential customers because of slow response times to leads.
A lead management tool has the ability to track customer behavior and preferences. By doing so, it helps sales teams anticipate the needs of their customers and offer proactive support.
For example, a lead or customer frequently visits the clothing section on your website but has explored the footwear and accessories sections. Identifying this, the lead management tool can generate alerts for the sales reps to send customized content related to footwear and accessories to the lead. Such an approach helps in addressing customer needs even before they express them.
Insight – “49% of buyers have made impulse purchases after receiving a more personalized experience.”
Moreover, a lead management tool provides sales reps with a centralized view of customer interactions. This helps them in ensuring consistent experiences across all touchpoints. Suppose a customer contacts your support team regarding a product that they previously discussed. The support team already has knowledge about the conversation and can provide relevant assistance without the customer to repeating information.
Helps Focus on Quality Leads
Quote - Increasing customer retention rates by 5% increases profits by 25% to 95%.
Another effective way through which a lead management tool helps in boosting relationships with customers is lead scoring. As soon as a lead is captured, the lead management software analyzes the lead and assigns a score. This score helps sales reps determine the most promising leads and allows them to focus their efforts on those leads. It is an excellent way through which sales reps can avoid wastage of time, efforts, and resources.
For example, a lead that frequently visits some particular products on your websites and even adds them in the cart will be assigned a high priority score. On the other side, a lead that has only visited your website 1-2 times with no particular product being explored will be assigned a low priority score. With these scores, the sales team will focus on high-priority leads and avoid dedicating too many resources to low-priority leads.
Provides Data Driven Insights
Quote - 17% of US customers and 32% of customers globally will abandon a brand after just one poor experience. (PWC)
Lead management software comes with real-time analytics. This means it analyzes customer behaviors and generates useful insights. Sales managers and representatives can understand the preferences and engagement patterns of the leads and make informed decisions that foster better relationships with the customers.
Did you know that “88% of customers are more likely to purchase again after a positive customer service experience.” (Salesforce)
Enables Teams to Collaborate Seamlessly
The secret to build strong customer relationships is often the seamless collaboration between different teams of an organization. When sales, marketing, and customer support teams work together, their efforts are certainly bound to bring good results, including better relationships with customers. A lead management tool acts as a unified platform where different teams can access the same data and have a unified view of customers' journeys. This ensures that every team member is on the same page, leading to reduced confusions and a more cohesive experience.
Supports Post-Sale Relationship Building
The best thing about sales lead management software is that their role is not just limited to the conversion of a lead into a customer, rather, it extends beyond that. Even after the sale, the lead management software can continue to send automatic follow-ups, such as personalized thank you emails, gathering customer feedback about their purchase and offering product recommendations based on their interests and buying history.
Best Practices When Using a Lead Management Tool
A lead management tool has the potential to help you achieve your goal of strong customer relationships. However, you need to learn how to use such a tool for maximum benefits. Here are some of the best practices that you can implement:
Incorporating these practices into your lead management strategy can surely bring positive results.
Key Takeaway!
By now, I’m sure that you are convinced of the value of retaining your customers; however, I would like to share one more compelling piece of research by Bain & Company. It states that increasing customer retention rates by 5% increases profits by 25% to 95%. These numbers highlight the powerful impact of customer loyalty upon a business's bottom line, and a lead capture tool can significantly boost your ability to convert potential customers into long-term paying clients.
Once again, let’s take a recap of what we have learned in this post. A lead management tool:
So whether you are a sales manager, a business owner or a solopreneur, a lead management tool can be an ideal tool to build long-lasting customer relationships, boost sales and grow your business.