Not Having an Efficient Customer Relationship Management (CRM) System Is Costing You Money
Massive resources and huge amounts of money are used on marketing campaigns every quarter with one goal in mind; lead generation. But, according to studies, most marketing leads are never pursued. In fact, it’s estimated that 80% of leads generated through marketing get lost, discarded, or ignored.
80%! For those marketing resources not to be wasted, an efficient lead management system is vital to every organization’s profitability and growth.
A CRM needs to be in place for two overarching reasons:
- To ensure marketing efforts are not wasted
- To follow up and nurture leads over time
Lead response takes place after the leads have been generated. Where it is the marketing team’s job to generate the leads, it is the sale’s teams job to follow up, nurture, and convert those leads.
Lead response management allows the efforts of the marketing team to be effective, otherwise, these efforts are wasted. Studies show that 79% of marketing leads never convert into sales due to a lack of lead nurturing.
Businesses can’t afford to not implement a CRM. With hundreds and even thousands of leads being generated from marketing efforts, businesses must have a system for responding and following up with potential customers.
Lead management allows for the sales team to do its job: respond, nurture, and close. It allows for them to build and maintain relationships with the lead, give the customer a better understanding of the information, and answer any questions they might have.
79% of marketing leads never convert into sales due to a lack of lead nurturing. | HubSpot
With a system in place, proper responses can be created, emails scheduled, and resources available to send to the prospect or customer right away. A system allows your team to be ready when a lead comes in and not lose out on the potential revenue.
Following Up With Prospects
Responding to leads is necessary, responding to them in a timely manner is crucial. Without knowing proper response times, prospects have the potential to move on to other options if not reached out to. We know we need to respond, follow up, and be persistent, but that isn’t enough. While some rely upon experience and intuition on when to follow up, studies show that there are days and times ideal for speaking with potential customers who have displayed interest.
We need to ask ourselves the following questions:
- What are the best days to make contact?
- What are the best times to make contact?
- What is our average response time?
According to a study done by InsideSales.com and the Harvard Business Review, there is a 164% difference in qualifying leads when contact is made between 4-5 PM vs. 1-2 PM.
Knowing when to follow up with your leads could be the difference between a conversion and a missed customer.
Measuring & Improving
A good CRM allows for your marketing efforts to never be wasted and show you a clear understanding of what is working and what is not working. This is known as benchmarking.
Benchmarking is simply when organizations:
- Test to develop a standard
- Measure against that tested standard
The ultimate goal of benchmarking is to test, review, and measure past performance and take steps to improve future performance. It is the act of intentionally looking for holes and ways to make the system more efficient.
It gives the opportunity to adjust sale tactics and marketing campaigns.
Peter Drucker, author of the Effective Executive says,
“If you can’t measure it, you can’t improve it.”
Both the sales and marketing teams need the opportunity to improve upon their systems. For example, benchmarking can be used throughout the Revenue Funnel, which is the process used to generate, transition, and nurture leads from marketing to sales. Benchmarking can and should be applied throughout every stage of the Revenue Funnel.
With the top of the funnel belonging to marketing, the middle stage being the handoff point to sales, and the bottom part of the funnel completely owned by sales. Organizations must allow for evaluation of each stage of the funnel and allow for improvement based upon established standards and grading criteria.
For example, marketing benchmarks can be compared to previous results pulled in from a campaign and within a time frame that makes sense for the organization, such as yearly, monthly, quarterly, etc.
Sales benchmarks can include how sales reps are performing on customer conversion or even knowledge of a product or service. Benchmarks can even take into account a sales rep’s experience, as new team members can take longer to convert leads. This should all be considered.
The goal is to set up criteria and metrics that allow for accurate grading for the purpose of improving the current system and that makes sense for the business. This is never an attack on a person or people, but an attack on the problem or problems. It’s vital for organizations to be kept aware of the increase or decrease in lead generation and lead conversion.
While internal benchmarking is a good place to start, companies also need to be comparing their systems and performance against outside data.
Based on research pulled from 50 different companies by FunnelWise, here are 4 insights that can serve as starting points for external benchmarking.
30% or more of their marketing qualified leads (MQLs) convert to qualified sales opportunities.
Opportunities that are influenced by MQLs win at a higher rate than opportunities that are not influenced by MQLs.
Bottom of funnel process inconsistency of 10 percent or less.
Win rate variance of 10% or less across team members
Having marketing, lead response, and conversion data at your fingertips is invaluable to learning what makes a prospect say, “yes.” A lead response system allows you to measure your leads, follow up with prospects, and adjust the system as it needs it through benchmarking.
Truly effective marketing is measured in the result of your best practices for lead response management. It is one of the key fundamentals of lead conversion.