Justin just dropped a little present in our email boxes on some of the basics on really tracking lead conversion from acquisition to closure. These are absolute imperatives if you want to ensure the effectiveness of your lead generation efforts. It's pretty amazing how few companies actually know, I mean KNOW their conversion rates for leads along the sales cycle, and are doing something about actively improving both the process and the subsequent results.

It is critical that your Customer Relationship Management (CRM) system not only support customer retention but the cultivation of lead conversion. This double duty helps tune your efforts to increase lead quality with less effort.

For CRM to track lead conversion efforts it must:

1. Track lead sources at the point of first contact. Collect everything you need to know to match a lead with a marketing effort; including ad codes, medium, and lead source. These details help you determine the return on specific marketing investments.
   
2. Record every interaction from lead to point of sale. Track everything you do to qualify a lead for a certain solution so that you know what made a sale. Use contact histories to build an understanding of what makes a good lead who becomes a customer.
   
3. Connect with your accounting system to place transaction values on leads. Use real accounting information to gain a clear picture of your cost per sale. This value tells you how much you can invest in lead generation to remain profitable.
   
4. Use reporting to understand the value of a customer across all lead sources. If you're not using a customer profitability scoring system, then at least have reports for Recency-frequency-monetary (RFM) measures. Identify your most cost effective lead generation sources that are most likely to produce a conversion.
   
5. Clearly define your sales pipeline early. Track leads into a sales pipeline with a standard means of developing accurate forecasts. It's critical that you always have a clear picture of potential cash flow as it pertains to your lead generation efforts.
   
6. Sales, marketing, and service departments must all use CRM. Often only pockets of customer-facing professionals use CRM when everyone should use it. Customize each group's access to serve their needs, combine departmental databases into this single interface.
   
7. Make CRM a universal collection point for all interactions. Often today's unqualified leads have a high potential to become buyers later. Use one system to create the most complete picture of everyone who interacts with your organization.
   
8. Let CRM assist in literature fulfillment to new leads. Track marketing materials sent to each lead and how they respond. Most companies don't know which information has influenced a purchase decision; use CRM to make this clear to you.
   
9. Create a single source for all customer account details. From lead generation to repeat purchase, your CRM system can track every detail. Use this system to track customer history as they cycle through your company into leads for other products.
   
10. Maintain and clean your data regularly. You'll save money, resources, and time if you update all your records regularly with standardization tools. If possible, quarterly correct addresses, verify phone numbers, and update demographic information with third party sources.

It's still amazing to watch salespeople turn into "relationship managers" when they can see all the data collected by a combined marketing and sales system. For example, giving a salesperson a list of the Web pages seen by a prospect can help the salesperson know something about what the prospect was thinking -- and how to guide the next sales call.

When CRM works, it works wonders.

Thanks for mentioning my article, originally published in my newsletter Inside Strategic Relations.

I've got 27 more ways to track leads, the key is that a company choose one and actually use it.

Even if you aren't using CRM, a simple spreadsheet can track some basic interactions with customers in a meaningful way.

Sincerely,

Justin Hitt, Strategic Relations Consultant
Helping Executives Create And Keep Profitable Customers
http://insidestrategicrelations.com/