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Lead Management or CRM?

Posted on: August 3rd, 2012 by credit

Many businesses confuse lead management and CRM or customer relationship management thinking that they are the same. In effect, they also confuse their needs. Some are using lead management systems when what they really need is CRM and vice versa. Although the two systems may seem similar, it does not follow that one will work well with both lead management and CRM needs.

What is Lead Management?

A user-generated definition in Wikipedia says that lead management is “used to describe methodologies, systems, and practices designed to generate new potential business clientele, generally operated through a variety of marketing techniques.” Meanwhile, Rao Vallabhaneni in his book Corporate Management, Governance, and Ethics Best Practices defined the term as “the process of rapidly and effectively creating, nurturing, distributing, and analyzing leads. The ultimate goal is to increase the likelihood that a lead will convert to a qualified sale opportunity and then a new, satisfied customer.” Applying lead management now to dealership context, automotive lead management is the process of generating leads through various dealership marketing efforts and converting them into sales.

Automotive lead management systems, on the other hand, are the ones that automate monitoring, measurement, and all the management processes involved from the time a lead comes budding until when it blooms into a sale. These are tools, models, or software that make the process easier for dealerships and other businesses.

You need lead management systems to:

  • Contact leads fast. Leads grow cold quickly. Studies show that leads receiving a response within five minutes after they dropped their query in are most likely to turn into sales. Quick response time also give a dealership a higher customer satisfaction rating.
  • Speed up sales process. Lead management systems allow you to monitor the performances of the various lead generation techniques you are employing and improve those that appear ineffective. You can also track the status—needs follow-up, closed, or not yet contacted—of the leads and ensure that they are qualified.

What is CRM?

According to Samara Lynn of PCMag.com, CRM is a “strategic business tool that helps companies streamline their business processes…and can increase revenue by attracting and retaining customers…and shortening the time it takes to close a sales deal.” CRM systems focus on fostering your and your salespeople’s relationship with your dealership’s prospects and customers.

You need CRM systems to:

  • Build relationship with prospects. CRM systems make data collection easier. They also help your salespeople understand the needs of customers, which is essential in almost all sales approaches, and provide solution for them. This helps build trust and rapport with prospects and customers.
  • Foster customer loyalty. CRM systems help you serve your existing customers better, keep a record of customer complaints and resolve them, and modify sales and marketing approaches according to shifting customer behavior and needs.
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