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How to Track Sales Leads
Written by: Victoria Yu
Victoria Yu is a Business Writer with expertise in Business Organization, Marketing, and Sales, holding a Bachelor’s Degree in Business Administration from the University of California, Irvine’s Paul Merage School of Business.
Edited by: Sallie Middlebrook
Sallie, holding a Ph.D. from Walden University, is an experienced writing coach and editor with a background in marketing. She has served roles in corporate communications and taught at institutions like the University of Florida.
Updated on October 11, 2023
How to Track Sales Leads
Imagine you’ve pulled out all the stops on marketing: ad campaigns, influencer endorsements, social media posting, and everything else under the sun. There might be an unprecedented buzz around your business, and customers might say they’re eager to make a purchase.
However, when you look at your sales figures, your bottom line might be disproportionately low compared to the overwhelming hype. What happened?
The journey from interested consumer to purchasing patron is a long and arduous process. Just like you can lead a horse to water but can’t make it drink, not every consumer you attract is guaranteed to become a customer.
So how can you discover what’s stopping your leads from purchasing, and improve your conversion rate? The answer to that is lead tracking.
Lead tracking monitors where your potential customers come from and how they progress through your sales funnel.
By tracking and analyzing your leads, your business can identify your best lead sources, improve the customer experience, optimize your sales process, and forecast financials.
Seven ways your business can track leads is by mapping out your customer journey, using category tags, customizing materials, practicing lead scoring, preparing email sequences, scheduling follow-ups, and investing in a CRM.
Why is Sales Lead Tracking Important?
Though a lead is any potential customer for your business, leads-to-customers isn’t a one-to-one conversion. During the sales process, several leads drop out, leaving you with only a handful of final customers.
Though the exact percentage varies by industry and market, Ruler Analytics reports that the average conversion rate from lead to customer is 2.9%. In other words, only three out of a hundred leads are likely to become customers for your business.
That’s why companies use lead tracking to monitor potential customers as they travel through the sales process, gathering information about where each lead comes from, how they interact with the company, and how long they take at each stage of the sales process, among other details. With this information, businesses hope to improve their customer journey and increase their conversion rates.
When asked about the top challenges they faced, the number one response by social media marketers was gaining and keeping followers – in other words, lead generation and retention. That’s why lead tracking—which uses data to address and solve these issues—is so important. Here are four concrete ways that lead tracking can help your business and marketing efforts.
1. Identifies Your Best Lead Sources
The first and most obvious benefit of tracking sales leads is that, by noting which source converting leads come from, your business can identify the lead source that provides the most paying customers. In other words, it helps you track your ROI per lead source.
With this information, your business can hone in on the marketing channels that provide the most paying customers, cutting costs while attracting more qualified leads.
For example, if your company discovered that nine out of 10 of your customers come exclusively from social media, you would naturally redirect funding from your other advertising strategies towards further building your social media presence.
2. Improves the Customer Experience
Next, lead tracking can improve each customer’s experience by using labels from marketing to tell your sales reps certain details about each lead. This might include details such as what promotions and items they were interested in, how they first came to know about your business, their demographics, and other such details.
With this information, your sales reps can then deliver a more streamlined and tailored sales process, providing a smooth, customized customer journey.
Not only will customers be satisfied by the speedy service, but they’ll also be overjoyed to receive a specialized and personalized product journey!
3. Optimizes the Sales Process
On a broader scale, lead tracking also helps a company identify areas for improvement in the sales funnel by telling sales managers exactly where leads are bottlenecked in or dropping out of the sales process.
As we mentioned earlier, only about three out of a hundred leads make it to the end of the sales journey to become paying customers. By tagging leads and monitoring their customer journeys, sales managers can identify if one specific funnel stage has a lower-than-average conversion rate, if certain types of customers are disproportionately falling out of the funnel, if certain sales reps are less effective than others, and if certain sales nurturing strategies are effective or not.
While your sales team might be able to provide anecdotal comments on what lead nurturing strategies worked best for them individually, it’s only by setting up company-wide lead tracking processes that decision-makers can gain a holistic view of the sales process and make sound business decisions.
4. Forecast Financials
Finally, by consistently tracking your leads’ sales progress and your business’s conversion rates, your sales leaders can extrapolate how many closed sales your business will have by the end of the sales period.
In other words, this will tell you how much money you can expect per period, which is always a good thing to know for financial planning.
7 Tips and Techniques for Tracking Sales Leads
Now that you know how beneficial tracking leads can be for your business, you might be chomping at the bit to track leads yourself.
To help you with that, we’ve curated seven tips and techniques you can use to set up and improve your lead tracking process, ranked from simple steps for entrepreneurs to complex tools for emerging businesses.
1. Map Out the Customer Journey
The first and foremost step you should take to track sales leads is to map out your customer journey, viewing the sales process from the customer’s perspective from the moment they first hear about your brand and think they have a need unmet to the time when they make their purchase. Break up each part of this journey into concrete stages, and understand what customers think and feel at every step.
After all, without a clear starting and ending point, how will you ever track your leads’ progress? It’d be like trying to cross the desert without a map!
With the customer in mind, you can then map out your business-side sales pipeline, segment your business processes based on the considerations, thoughts, feelings, and needs customers might have at each stage, and pad each section with the appropriate marketing and sales enablement material.
As leads move through the sales process, you can then discretely determine their stage based on the behavior they exhibit and the materials they peruse.
2. Use Category Tags
Beyond the basics of tracking sales leads through the sales journey, you can also track sales leads by using category tags to track other types of information.
Some common traits businesses tag customers with include:
- What marketing channel or lead source they came from
- What communication channels they prefer
- What product they express interest in
- Price sensitivity
- Whether they’re a repeat customer
- What stage of the sales funnel they’re at
- How long they take per sales funnel stage
Out of all of these, the most important category tag is the first one, which marketing channel or lead source each lead came from. Using this information, your marketing team will know which channels to focus their attention on to get the most leads for your business.
By pairing these category tags with how each lead behaves in the sales funnel, your sales managers will be able to uncover trends about each category of customer and adjust the company’s strategies as necessary. Your sales reps can also make a more tailored appeal to each type.
For example, your analysis might show that customers with higher price sensitivity tend to drop out of the sales funnel near the negotiation phase. Using this information, your sales reps could prepare more compelling statistics and sales enablement material that shows how valuable your product is, justifying the price and winning over more price-sensitive customers.
3. Customize Marketing and Sales Enablement Materials
Next is to make custom marketing material and sales enablement for each sales funnel stage. This helps you better identify what stage a consumer is at when they enter and exit the sales process.
Consumers require different types of attractive content as they progress through their sales journey. While they might be enticed by bright colors and emotional appeals at the beginning during the marketing phases, they’ll rely more on logical and financially sound decision-making as they truly consider a purchasing decision, and need more data-based sales enablement materials to match their interest. Thus, it’s wise to provide customers with different types of content for different stages of the sales funnel.
Plus, according to Forbes, most customers are 57% of the way through their buying process before they meet with a company representative. In other words, you can no longer trust sales reps to have an accurate view of how far along the sales process a lead is.
By having different levels of material available, sales reps can more accurately determine a potential customer’s sales readiness based on the type of sales enablement material they request.
If you have this content available online, you could also create different variations of the same content depending on its marketing channel, creating an additional tag to provide more information on your lead’s source.
4. Practice Lead Scoring
Which one is easier to say: “This lead meets five of our traits for our ideal customer profile but seems to have minor issues with the price point and is stalled at the interest stage,” or “This lead has a score of 70”?
Lead scoring helps your marketing and sales team quickly communicate a lead’s qualification and sales readiness by assigning points for specific traits and behaviors that match your ideal customer profile.
Specifically for lead tracking, you may choose to assign points for specific tasks along your sales funnel, so that the further down they go, the higher the lead’s score will rise. By tracking a lead’s score, you can then identify how close they are to purchasing.
Alternatively, it also provides information on the average qualification of sales dropouts and the average qualification score of customers when they make their purchase decisions.
In essence, having a numerical representation of your sales qualification and journey systems makes communication, tracking, and analysis plain easier.
5. Prepare an Email Sequence
As we mentioned earlier, leads at different stages of their sales journey require different levels of appeals and communication depending on their interest and consideration level.
As such, if your sales reps reach out to leads on a one-by-one basis, they’ll need to start out with simpler, surface-level emails to test the waters and progress to more detailed purchase consultations.
To that extent, it would be wise for a company to designate a clear email sequence for sales reps to follow, ensuring that leads are nurtured consistently according to the best practices for your company.
Having a templated email sequence also helps reps respond to leads faster, speeding up the overall sales process. With email automation, you could even set up a program that customizes and sends out the emails automatically!
With different designated emails for different stages of the sales funnel, it then becomes quite easy to determine at what point a lead is in their sales journey, or at what stage a lead dropped out.
Emails also provide a neat paper trail of timestamps, telling you which funnel stages take the longest. Using this information, your sales managers and reps can continuously hone the email sequence for maximum appeal.
6. Schedule Follow-Ups and Reviews
Lead tracking shouldn’t end once a consumer drops out of the sales funnel. Instead, you should accept that these consumers weren’t a good fit and use it as a learning opportunity.
Once you’re sure the ex-lead has no chance of purchasing, send one final follow-up questionnaire asking what parts of the sales process they liked or disliked, whether they felt satisfied with your company’s level of customer service, and what ultimately convinced them not to go through with a purchase. Using this, you can pinpoint the most problematic areas of your sales funnel and improve upon them.
In a similar vein, you should also ask for reviews and feedback from your customers who have completed their purchases, asking what parts of their sales journey were good, bad, or confusing.
7. Use a CRM
For businesses with a more established business process and the capital to spare, our final tip renders most of these previous tips irrelevant: use a customer relationship management (CRM) system. CRM systems are lead management software that allows your company to track and nurture your customers throughout the sales process.
A CRM platform displays your sales funnel stages visually and places each lead in their respective place so sales managers and reps can tell from a glance how many leads are at each stage. As sales reps update each lead’s card with new information on their sales progress, the CRM will serve as a live database of your company’s current leads.
Most of the previous tips and techniques we mentioned can be integrated straight into a CRM system. A CRM system will allow you to:
- Map out and customize your sales process in the CRM
- Add category tags to each lead’s card
- Store stage-specific marketing and sales enablement documents within the CRM for sales reps to access
- Have an automatic lead scoring system integrated into your CRM
- Set up email automation for both marketing and sales workflows
- Set up automatic follow-up messages for removed or graduated leads
While the six previous tips and techniques were useful for tracking your leads and improving your sales process by hand, a CRM digitizes all of these tools into one live, easy-to-manage platform.
Rather than a black box of leads going in and customers coming out, lead tracking sheds some light on your sales process by identifying where potential customers come from and monitoring them through every step of their sales journey.
With a lead tracking system in place, your business can smartly gain more leads and nurture them quickly and efficiently. Your marketing and sales processes will only continue to improve.
A common mistake people make when tracking leads is not tracking all lead sources, leading to misrepresenting where potential customers come from.
Businesses can either attract leads to them using inbound marketing techniques or reach out to leads through outbound marketing or sales prospecting techniques. For each marketing or sales campaign the company deploys, you should be sure to update your lead tracking system to reflect the new lead source.
The second most egregious mistake in lead tracking is not updating the leads’ information as they progress through the sales funnel. If your sales reps log a new lead but forget to record when the lead moves to the next stage or is disqualified, it renders the entire tracking system moot.
As such, sales managers should ensure that reps understand the importance of the lead tracking system and know how to update leads’ information.
While lead tracking software such as a CRM system certainly makes monitoring and nurturing leads more efficient on a large scale, it may not be suited for everyone.
For example, if you run a very small artisanal business with only a dozen customers at a time, you could simply track your leads and customers with an Excel spreadsheet, manually updating the fields within.
However, if you plan to grow your business and take on more and more leads and customers, we highly recommend investing in a CRM to help you track leads. Some vendors of CRM software are HubSpot CRM, Salesforce CRM, and Zoho CRM.
Some best practices for lead tracking are to ensure your tracking system reflects all lead sources and to leverage the information you gather to continuously improve your sales process.
Additionally, ensure that your sales reps are trained in how to update your system to track leads and that they understand why lead tracking is important. If your sales reps are truly recalcitrant when it comes to your lead tracking processes, you may also want to tie their performance reviews and compensation to how accurate their lead tracking is, such as by monitoring their CRM usage.
Finally, we highly recommend automating your lead tracking processes. For example, most CRM and lead tracking tools can automatically move a lead to the next stage of your sales funnel depending on if they complete key criteria: following your social media, visiting your website, submitting a lead magnet form, replying to an email, and having a phone call, just to name a few.
By integrating these digital tools with your lead tracking software, the two can communicate to automatically move your sales lead along the pipeline without any human effort.
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