Lead management is one of the key ingredients to a successful sales process. Adopting this capability can have a significant impact on your sales turnover and give your sales reps clearer insights into their sales pipeline. This blog explains why lead management can be a game changer and proposes several best practices to capture, nurture and convert business leads.
This is a valid question you might ask. After all many customers do not use lead management at all or capture leads outside of their CRM tool, e.g. in Excel or even with pen and paper. What is the benefit of adopting a lead management tool like C4C? The answer is that by capturing any potential interest in your services and/or products in a structured way your salesforce will be enabled to execute various analyses as to which interests manifested into an actual deal. Contributing parameters like lead source or qualification level can be taken into account and conclusions drawn, e.g. discontinuing a certain lead generation source and doubling down on another one. Another big argument for adopting a lead management process lies in the fact that only a small subset of leads will actually convert into a paying customer. The fact that the number of leads decreases the further you get in the pipeline is called the Lead Funnel. Increasing the backlog of potential interests and nurturing the most promising ones can eventually increase your actual sales volumes. Without a proper lead management tool in place you might simply miss out on important prospects, thus compromising on sales turnover.
Now that we know why customers should adopt a lead management process, let us have a closer look into the various steps of such a process. A typical lead management process consists of the following 3 steps:
The first step takes care of how the leads make it into the system. They can either be manually created via the UI, mass-uploaded from an existing Excel or replicated from a marketing system. Leads can be captured by a sales rep visiting a trade fair or be the result of a previously run marketing campaign. Whatever option is chosen, certain best practices should be followed which are discussed in the following chapter.
The next step after creating the lead is to nurture it. Nurturing refers to the process of developing relationships with your potential buyers by gathering certain information, following up on raised questions and concerns and raising further interest into the company's products or services.
The final step in the lead management process is to convert the lead into an opportunity. This not only manifests a strong interest of a prospect to buy your company's products, but also transfers responsibility of managing further steps to the actual deal cycle. Here the sales rep can engage into an actual sales discussion with the customer, estimating potential revenues and capturing specific product quantities.
More details on the C4C capabilities offered in each step can be found here. In the next section we will cover several best practices to be followed across the previously mentioned steps.
First of all, it is important to understand the difference between leads, prospects and opportunities and when to use what. There are customers who model their sales deals as leads e.g., thus missing out on some crucial features such as pipeline analysis and forecasting. In general one can differentiate the following 3 concepts:
Leads are used to express an interest in a company's products and/or services. The interest can come from a known customer/prospect or contain unstructured information like company name only. There can be multiple leads, i.e. interests for the same customer, e.g. for different products and or business units.
Opportunities on the other hand are already further in the sales process and represent specific deals for existing customers and prospects, typically including products and estimated revenue which resemble the pipeline and feed into a sales forecast. That means as soon as you want to measure your pipeline and create a forecast against a previously defined sales target, opportunity is the object of choice.
Prospects finally are prospective customers, i.e. the corresponding master data to be used in leads, opportunities as well as other business documents. Please note that leads to not necessarily need an assigned prospect, as they can also be completely unstructured and only capture the prospect name as a free text field. Opportunities and all their successor documents such as quotes however always require an existing prospect or customer assigned.
This point is a very trivial one, but cannot be stressed enough. In many cases lead data is dispersed amongst various systems and media - maybe an Excel, a marketing system, business cards, and even pen and paper. Consolidating all data into one centralized CRM system is key to leveraging lead data in follow-up sales processes like opportunity and quote management. Also reports analyzing lead sources and conversion rates rely on all data being present in CRM. In order to achieve that, automatic synch processes should be implemented to hand over leads from marketing to sales systems (such as our standard iflows) where possible. Existing Excel lists should be uploaded into C4C via standard mass import capabilities. Lead-related data received within an email can be captured in the system by using out-of-the-box groupware integration functionalities. Business cards received on a trade fair can conveniently be digitized using the business card scanner feature. Finally there is always the option to manually create the lead in the C4C UI, e.g. when a telephone inquiry came in. All sales reps should be educated in this point and establish a routine to maintain all lead-related data in the system.
Before creating a new lead in the system, it should be checked for any potential duplicates. This is because you want to keep your database clean and redundancy-free. Having multiple records for the same physical lead makes follow-up processes difficult and intransparent. Furthermore, it also artificially blows up your pipeline. Executing a duplicate check before creating the lead can detect duplicate leads and accounts and propose you to use an existing account or prospect instead to capture interest in a new business or product. More details on the duplicate check feature incl. how to configure it can be found here. If leads are uploaded from a third-party system or imported via an Excel list it is recommended to perform the duplicate check already at the source. After duplicate identification these leads should not be included into the dataset to be uploaded into C4C.
Leads should be maintained with the maximum dataset possible. Absolutely mandatory information is the lead name along with the name of the company and the contact. If additional data of the company is available to the sales rep, it should be maintained in the lead as well - such as address and communication data. This information can be used to assign leads to regional teams for follow-up. If the prospect or customer is already maintained in the system as master data (e.g. because of a past sales) the lead should be created with the option "Use Existing Account".
Another important field to maintain is the source of the lead, denoting where the lead originated in. Possible lead sources can be telephony inquiry, email campaign, trade fair, social media etc. Maintaining this information enables the sales rep to perform an analysis of how many leads originate from which source and how successful a specific source is. This can then be used for corrective actions, such as adding new sources or terminating unsuccessful ones. Also it can be used to better assess the lead qualification level - a telephony inquiry might e.g. have a higher level than a lead originating from an email campaign.
If the prospect already expressed his interest in certain products or services, these should also be maintained as part of the lead products section. The lead can also be categorized based on its interest, e.g. whether the prospect is interested in a certain product ("Prospect for Product Sales") or service ("Prospect for Service") your company offers. Again this is very helpful in analyzing interests and can also determine which team should handle the lead.
Leads should not only be created in the system but directly assigned to sales reps so they can be properly followed up and are not sitting idle on the queue with no-one taking care of them. The assignment can be done either to an individual sales rep or to a whole team (marketing unit or even territory). Also it does not need to be manually maintained but can be automatically derived based on lead routing rules configured by an admin to assign a lead owner, marketing unit and/or territory based on certain lead attributes, such as geography, lead category or source. More details on lead routing rules can be found here. Additional employee roles can be manually added to the lead as part of the sales and marketing team.
When leads are created in the system and not followed up, they will most likely not turn into successful sales. This is because no personal relationship exists at this point. Hence it is very important to nurture leads, i.e. develop such personal relationships, get into contact with the prospective customer, understand and respond to his personal needs. Nurturing leads is one of the key tasks in lead management and can decide about the success of your whole sales process. There are several features within C4C to support you with nurturing your leads. One is so-called "qualification activities". These are pre-defined surveys and tasks which are part of an activity plan that need to be completed in order to help the sales rep with the qualification process. An activity plan can be mandatory or voluntary - depending on the criticality of the activities it entails. It gets assigned to the respective leads via configured routing rules which can take into account various attributes. More details on qualification activities can be found here.
Another way of nurturing your leads through networking is the standard integration with LinkedIn Sales Navigator (see here). C4C can show LinkedIn related company and contact data of your individual leads embedded into the lead overview screen - stuff like recent activities or common connections which can act as ice-breakers into a conversation.
No matter how you are getting engaged with your leads - you should always maintain all communication activities and any additional data you gained out of it into your lead master record. It might be of value at a later stage!
A new lead will always be created in status "Open" first if the qualification level is unknown. Once created the goal is to assess and review the quality of the lead - has it originated out of a marketing campaign or has the customer already expressed his sincere interest by calling your company asking for more details on your product offerings? Based on this assessment the sales rep can maintain the qualification level and further engage with the lead in order to increase this level to "hot" eventually. Once a qualification level has been set the status will also change to "Qualified". After the lead has been properly nurtured and the prospect is either willing to buy from your company or has decided to choose another vendor the status should be set to "Won" or "Lost" respectively.
One thing to note is the difference between a sales qualified and a marketing qualified lead. Marketing leads are typically first assessed within the marketing system and replicated to the sales system if considered sufficiently qualified from a marketing perspective (e.g. prospect has clicked on an email link to gather additional infos or browsed through the product catalog of your company website). If a lead is already qualified from marketing side, the sales team can follow up with the lead and will have a "warm" introduction as the lead should already know your company and products at least. When the sales team has engaged with the lead and raised its interest into your products, the sales rep can finally qualify it from sales side, depending on the propensity to close a deal. The qualification level of a lead in C4C reflects this sales-based lead qualification.
One key aspect of lead management is focusing on the right leads and not investing too much time in those leads which have a low propensity to close. Scoring mechanisms based on machine learning algorithms can be of great help here. The system can predict the likelihood of successfully converting the lead based on key lead criteria and historical data. More details on ML-based lead scoring can be found here.
An easy visual display of leads ordered based on previously calculated ML scores is the Deal Finder. The tiles are ordered based on the calculated scores and each tile represents an individual lead. The leads with the highest scores are visually emphasized and span 2 lines and columns. Clicking the cards shows the main contributing factors (both negative and positive) to influence the score. When the sales rep is ready to convert the lead into an opportunity he can do so by dragging and dropping the lead onto the opportunities column. The queries used in the Deal Finder can be tailored to the sales rep's needs, e.g. only hot leads can be displayed in the Deal Finder.
The last step in the lead lifecycle is the conversion to an opportunity, which represents an active sales deal. Once the lead has been converted the status gets updated to "Converted" and the lead locked for any further edits. When the lead is ready to be converted, the sales rep has 2 options:
The straightforward and recommended way to convert a lead is to convert it into an opportunity. If the lead already has an account assigned the opportunity will get the account assignment copied over. In case the lead is unstructured, the opportunity conversion process will generate the account and contact based on the free text name fields entered on the lead. Before generating new master data a duplicate check is executed to propose the rep with potential duplicates to select from. The lead can also result in multiple opportunities if desired - the administrator can configure the maximum allowed number of conversions in Business Configuration. Please note it is not possible to assign an existing account to a lead after the lead has been created. This is only possible upon lead creation. A corresponding idea has been submitted on the Influence portal.
If is not yet clear whether the lead will actually engage in a sales discussion justifying an opportunity, the sales rep can still convert the lead into a prospective customer. This however decouples the lead to opportunity process as it is impossible to further convert the lead into an opportunity from that point onwards and the opportunity needs to be created from the new account. Hence this option should only be used with caution where the actual deal might be settled at a later stage but the lead can already be set to won/converted as the sales rep is pretty sure the prospective customer will buy from his company at some point.
Not always is the flow sequential and an existing lead converted into an opportunity. There are cases where both lead and opportunity already exist in the system and are later found to be interrelated. Once this relation has been identified it is possible to link the opportunity as successor document to the lead via tab "Related Opportunities". The maintenance of this relation is important for proper lead2cash analysis. More details on the different lead conversion options can be found here.
An easy way to get a visual overview of your current lead backlog and analyze historical lead data is by utilizing standard lead dashboards and reports. C4C comes with several predefined reports which all have a different focus:
These reports can all be accessed via the Analysis workcenter. Another way to make use of these reports is via the pre-delivered dashboard Pipeline Sourcing (Leads) which combines multiple of those reports and provides a contextual and holistic insight into your lead pipeline. More details on how to use reports and dashboards in C4C can be found in the Analytics Guide.
In addition to the C4C native reporting/dashboard capabilities embedded SAC (SAP Analytics Cloud) can be used to visualize lead data of C4C. C4C comes with a predefined SAC story Lead and Deal Analysis giving the sales reps a holistic lead analysis dashboard along with powerful drill-down features. More details on how to use embedded SAC within your C4C solution can be found in the following blog.
This concludes the blog around lead management best practices. Following the recommendations mentioned in this blog should give your salesforce transparency into their potential pipeline and boost the actual deal process. Happy selling! 🙂
Why is lead management beneficial for your business?
This is a valid question you might ask. After all many customers do not use lead management at all or capture leads outside of their CRM tool, e.g. in Excel or even with pen and paper. What is the benefit of adopting a lead management tool like C4C? The answer is that by capturing any potential interest in your services and/or products in a structured way your salesforce will be enabled to execute various analyses as to which interests manifested into an actual deal. Contributing parameters like lead source or qualification level can be taken into account and conclusions drawn, e.g. discontinuing a certain lead generation source and doubling down on another one. Another big argument for adopting a lead management process lies in the fact that only a small subset of leads will actually convert into a paying customer. The fact that the number of leads decreases the further you get in the pipeline is called the Lead Funnel. Increasing the backlog of potential interests and nurturing the most promising ones can eventually increase your actual sales volumes. Without a proper lead management tool in place you might simply miss out on important prospects, thus compromising on sales turnover.
Lead Funnel
The 3 phases of lead management
Now that we know why customers should adopt a lead management process, let us have a closer look into the various steps of such a process. A typical lead management process consists of the following 3 steps:
- Lead Creation
The first step takes care of how the leads make it into the system. They can either be manually created via the UI, mass-uploaded from an existing Excel or replicated from a marketing system. Leads can be captured by a sales rep visiting a trade fair or be the result of a previously run marketing campaign. Whatever option is chosen, certain best practices should be followed which are discussed in the following chapter.
- Lead Nurturing
The next step after creating the lead is to nurture it. Nurturing refers to the process of developing relationships with your potential buyers by gathering certain information, following up on raised questions and concerns and raising further interest into the company's products or services.
- Lead Conversion
The final step in the lead management process is to convert the lead into an opportunity. This not only manifests a strong interest of a prospect to buy your company's products, but also transfers responsibility of managing further steps to the actual deal cycle. Here the sales rep can engage into an actual sales discussion with the customer, estimating potential revenues and capturing specific product quantities.
Lead Cycle
More details on the C4C capabilities offered in each step can be found here. In the next section we will cover several best practices to be followed across the previously mentioned steps.
Best practices in lead management
Leads, prospects and opportunities - Know the difference!
First of all, it is important to understand the difference between leads, prospects and opportunities and when to use what. There are customers who model their sales deals as leads e.g., thus missing out on some crucial features such as pipeline analysis and forecasting. In general one can differentiate the following 3 concepts:
Leads are used to express an interest in a company's products and/or services. The interest can come from a known customer/prospect or contain unstructured information like company name only. There can be multiple leads, i.e. interests for the same customer, e.g. for different products and or business units.
Opportunities on the other hand are already further in the sales process and represent specific deals for existing customers and prospects, typically including products and estimated revenue which resemble the pipeline and feed into a sales forecast. That means as soon as you want to measure your pipeline and create a forecast against a previously defined sales target, opportunity is the object of choice.
Prospects finally are prospective customers, i.e. the corresponding master data to be used in leads, opportunities as well as other business documents. Please note that leads to not necessarily need an assigned prospect, as they can also be completely unstructured and only capture the prospect name as a free text field. Opportunities and all their successor documents such as quotes however always require an existing prospect or customer assigned.
Create all leads in a centralized CRM system
This point is a very trivial one, but cannot be stressed enough. In many cases lead data is dispersed amongst various systems and media - maybe an Excel, a marketing system, business cards, and even pen and paper. Consolidating all data into one centralized CRM system is key to leveraging lead data in follow-up sales processes like opportunity and quote management. Also reports analyzing lead sources and conversion rates rely on all data being present in CRM. In order to achieve that, automatic synch processes should be implemented to hand over leads from marketing to sales systems (such as our standard iflows) where possible. Existing Excel lists should be uploaded into C4C via standard mass import capabilities. Lead-related data received within an email can be captured in the system by using out-of-the-box groupware integration functionalities. Business cards received on a trade fair can conveniently be digitized using the business card scanner feature. Finally there is always the option to manually create the lead in the C4C UI, e.g. when a telephone inquiry came in. All sales reps should be educated in this point and establish a routine to maintain all lead-related data in the system.
Business Card Scanner
Avoid duplicate records
Before creating a new lead in the system, it should be checked for any potential duplicates. This is because you want to keep your database clean and redundancy-free. Having multiple records for the same physical lead makes follow-up processes difficult and intransparent. Furthermore, it also artificially blows up your pipeline. Executing a duplicate check before creating the lead can detect duplicate leads and accounts and propose you to use an existing account or prospect instead to capture interest in a new business or product. More details on the duplicate check feature incl. how to configure it can be found here. If leads are uploaded from a third-party system or imported via an Excel list it is recommended to perform the duplicate check already at the source. After duplicate identification these leads should not be included into the dataset to be uploaded into C4C.
Duplicate Check
Maintain as much data as possible
Leads should be maintained with the maximum dataset possible. Absolutely mandatory information is the lead name along with the name of the company and the contact. If additional data of the company is available to the sales rep, it should be maintained in the lead as well - such as address and communication data. This information can be used to assign leads to regional teams for follow-up. If the prospect or customer is already maintained in the system as master data (e.g. because of a past sales) the lead should be created with the option "Use Existing Account".
Another important field to maintain is the source of the lead, denoting where the lead originated in. Possible lead sources can be telephony inquiry, email campaign, trade fair, social media etc. Maintaining this information enables the sales rep to perform an analysis of how many leads originate from which source and how successful a specific source is. This can then be used for corrective actions, such as adding new sources or terminating unsuccessful ones. Also it can be used to better assess the lead qualification level - a telephony inquiry might e.g. have a higher level than a lead originating from an email campaign.
If the prospect already expressed his interest in certain products or services, these should also be maintained as part of the lead products section. The lead can also be categorized based on its interest, e.g. whether the prospect is interested in a certain product ("Prospect for Product Sales") or service ("Prospect for Service") your company offers. Again this is very helpful in analyzing interests and can also determine which team should handle the lead.
Lead with all relevant data
Assign leads to sales reps
Leads should not only be created in the system but directly assigned to sales reps so they can be properly followed up and are not sitting idle on the queue with no-one taking care of them. The assignment can be done either to an individual sales rep or to a whole team (marketing unit or even territory). Also it does not need to be manually maintained but can be automatically derived based on lead routing rules configured by an admin to assign a lead owner, marketing unit and/or territory based on certain lead attributes, such as geography, lead category or source. More details on lead routing rules can be found here. Additional employee roles can be manually added to the lead as part of the sales and marketing team.
Lead Routing Rules
Nurture your leads
When leads are created in the system and not followed up, they will most likely not turn into successful sales. This is because no personal relationship exists at this point. Hence it is very important to nurture leads, i.e. develop such personal relationships, get into contact with the prospective customer, understand and respond to his personal needs. Nurturing leads is one of the key tasks in lead management and can decide about the success of your whole sales process. There are several features within C4C to support you with nurturing your leads. One is so-called "qualification activities". These are pre-defined surveys and tasks which are part of an activity plan that need to be completed in order to help the sales rep with the qualification process. An activity plan can be mandatory or voluntary - depending on the criticality of the activities it entails. It gets assigned to the respective leads via configured routing rules which can take into account various attributes. More details on qualification activities can be found here.
Another way of nurturing your leads through networking is the standard integration with LinkedIn Sales Navigator (see here). C4C can show LinkedIn related company and contact data of your individual leads embedded into the lead overview screen - stuff like recent activities or common connections which can act as ice-breakers into a conversation.
LinkedIn Sales Navigator
No matter how you are getting engaged with your leads - you should always maintain all communication activities and any additional data you gained out of it into your lead master record. It might be of value at a later stage!
Maintain status and qualification level
A new lead will always be created in status "Open" first if the qualification level is unknown. Once created the goal is to assess and review the quality of the lead - has it originated out of a marketing campaign or has the customer already expressed his sincere interest by calling your company asking for more details on your product offerings? Based on this assessment the sales rep can maintain the qualification level and further engage with the lead in order to increase this level to "hot" eventually. Once a qualification level has been set the status will also change to "Qualified". After the lead has been properly nurtured and the prospect is either willing to buy from your company or has decided to choose another vendor the status should be set to "Won" or "Lost" respectively.
One thing to note is the difference between a sales qualified and a marketing qualified lead. Marketing leads are typically first assessed within the marketing system and replicated to the sales system if considered sufficiently qualified from a marketing perspective (e.g. prospect has clicked on an email link to gather additional infos or browsed through the product catalog of your company website). If a lead is already qualified from marketing side, the sales team can follow up with the lead and will have a "warm" introduction as the lead should already know your company and products at least. When the sales team has engaged with the lead and raised its interest into your products, the sales rep can finally qualify it from sales side, depending on the propensity to close a deal. The qualification level of a lead in C4C reflects this sales-based lead qualification.
Use ML-based scoring for lead prioritization
One key aspect of lead management is focusing on the right leads and not investing too much time in those leads which have a low propensity to close. Scoring mechanisms based on machine learning algorithms can be of great help here. The system can predict the likelihood of successfully converting the lead based on key lead criteria and historical data. More details on ML-based lead scoring can be found here.
Lead Scoring
An easy visual display of leads ordered based on previously calculated ML scores is the Deal Finder. The tiles are ordered based on the calculated scores and each tile represents an individual lead. The leads with the highest scores are visually emphasized and span 2 lines and columns. Clicking the cards shows the main contributing factors (both negative and positive) to influence the score. When the sales rep is ready to convert the lead into an opportunity he can do so by dragging and dropping the lead onto the opportunities column. The queries used in the Deal Finder can be tailored to the sales rep's needs, e.g. only hot leads can be displayed in the Deal Finder.
Deal Finder
Convert your leads in time
The last step in the lead lifecycle is the conversion to an opportunity, which represents an active sales deal. Once the lead has been converted the status gets updated to "Converted" and the lead locked for any further edits. When the lead is ready to be converted, the sales rep has 2 options:
- Convert to Opportunity
The straightforward and recommended way to convert a lead is to convert it into an opportunity. If the lead already has an account assigned the opportunity will get the account assignment copied over. In case the lead is unstructured, the opportunity conversion process will generate the account and contact based on the free text name fields entered on the lead. Before generating new master data a duplicate check is executed to propose the rep with potential duplicates to select from. The lead can also result in multiple opportunities if desired - the administrator can configure the maximum allowed number of conversions in Business Configuration. Please note it is not possible to assign an existing account to a lead after the lead has been created. This is only possible upon lead creation. A corresponding idea has been submitted on the Influence portal.
- Convert to Account and Contact
If is not yet clear whether the lead will actually engage in a sales discussion justifying an opportunity, the sales rep can still convert the lead into a prospective customer. This however decouples the lead to opportunity process as it is impossible to further convert the lead into an opportunity from that point onwards and the opportunity needs to be created from the new account. Hence this option should only be used with caution where the actual deal might be settled at a later stage but the lead can already be set to won/converted as the sales rep is pretty sure the prospective customer will buy from his company at some point.
Lead Conversion
Not always is the flow sequential and an existing lead converted into an opportunity. There are cases where both lead and opportunity already exist in the system and are later found to be interrelated. Once this relation has been identified it is possible to link the opportunity as successor document to the lead via tab "Related Opportunities". The maintenance of this relation is important for proper lead2cash analysis. More details on the different lead conversion options can be found here.
Utilize lead reports and dashboards
An easy way to get a visual overview of your current lead backlog and analyze historical lead data is by utilizing standard lead dashboards and reports. C4C comes with several predefined reports which all have a different focus:
- Lead Funnel Analysis and Lead Funnel Report provide insights into the lead funnel, both on an individual lead as well as an aggregate level. These reports can be used to analyze the lead to opportunity process
- Lead Conversion Rate report can be used to analyze how many leads could successfully be converted into opportunities relative to the total number of leads
- Leads by Status shows how many leads reside in which status
- Leads Analysis by Source, Qualification shows how many leads originated from which source by qualification level
- Leads Conversion by Source, Category gives insights into how many leads have been converted in a certain source and category
These reports can all be accessed via the Analysis workcenter. Another way to make use of these reports is via the pre-delivered dashboard Pipeline Sourcing (Leads) which combines multiple of those reports and provides a contextual and holistic insight into your lead pipeline. More details on how to use reports and dashboards in C4C can be found in the Analytics Guide.
Dashboard Pipeline Sourcing (Leads)
In addition to the C4C native reporting/dashboard capabilities embedded SAC (SAP Analytics Cloud) can be used to visualize lead data of C4C. C4C comes with a predefined SAC story Lead and Deal Analysis giving the sales reps a holistic lead analysis dashboard along with powerful drill-down features. More details on how to use embedded SAC within your C4C solution can be found in the following blog.
Embedded SAC Story - Lead and Deal Analysis
This concludes the blog around lead management best practices. Following the recommendations mentioned in this blog should give your salesforce transparency into their potential pipeline and boost the actual deal process. Happy selling! 🙂
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