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Leads are the seeds that grow into revenue. They’re the core of your sales pipeline. But generating leads is only the first step in the sales process. You need lead management to maintain a healthy, predictable pipeline that will ultimately bear fruit.

In short, lead management is how you turn prospects into customers—and revenue.

What Is Lead Management?

Lead management is the entire process of attracting, qualifying, and converting prospects into happy customers. It covers the whole customer journey: problem awareness, solution awareness, and product awareness. 

Most companies manage leads using a marketing funnel, which typically includes lead generation, lead engagement, lead nurturing, and lead conversion.

Pro Tip:

Your current customers are leads, too. Remember to keep nurturing your customers after the close to maintain and expand your accounts.

Horizontal marketing funnel on a green background. Stage 1: Generate LeadsStage 2: Engage LeadsStage 3: NurtureStage 4: Convert
The lead funnel outlines the stages of the buying process, from generating leads to converting leads into paid customers.

Why Do I Need A Lead Management Process?

An airtight lead management process makes your pipeline more predictable. It helps you track and nurture potential customers to keep them aware of your brand and interested in your offerings. That way when they’re actually ready to buy, you’ll be the one they contact.

Here’s why you need an effective lead management process:

  • Lead generation is only the first step. It’s what you do with those leads that turns them into Closed Won deals.
  • Without lead management, you’ll be committing Random Acts of Sales and have no idea what actually made your deals close.
  • Repeatable lead management processes = more predictable pipeline.

Benefits Of Lead Management

There are near-endless benefits of lead management, but let’s start with the most obvious:

Better Resource Allocation

Revenue teams today are leaner and scrappier than ever. Efficiency is necessary. Lead management can help you figure out where your team should focus their energy to increase customer conversion.

Resilience Against Market Disruptions

Lead management provides valuable insights into customer behavior that help you weather economic turbulence. You can even see how customer behavior changes in different market conditions and track that to be more prepared for disruptions.

Revenue Growth

At the end of the day, isn’t it all about growing revenue? Lead management provides a steady, reliable stream of qualified prospects that you can increase conversion rates. It’s no surprise that companies with effective lead generation practices see a 133% increase in revenue.

Challenges Of Lead Management

Yes, there are also lead management challenges that you’ll need to overcome. Beyond the fact that you need to invest time and money into lead management for it to work, you also have to make sure you’re focusing your efforts in the right places.

Accurate Contact Tracking

Bad data will have you targeting the wrong prospects with the wrong message. Contact tracking will help you get in front of the right people, the ones who are most likely to convert into qualified customers.

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Sales And Marketing Alignment

Everyone on your go-to-market team needs to have the same lead management definitions and tracking in place. Otherwise, you’ll be siloed and managing leads differently. Your pipeline will be a mess.

Speed To Lead

If you’re not first, you’re last. A whopping 78% of B2B buyers purchase from the vendor that responds first. Yet, speed to lead is still a huge issue for revenue teams. Only 0.9% of companies respond within 5 minutes.

The Lead Management Process

Process is the not-so-secret way to create a more sustainable, reliable sales pipeline. It’s the way you turn your sales strategy into action.

These are the key pieces you should have in your lead management process:

Lead Generation

There are two main types of lead generation: Inbound and outbound.

Inbound leads, also known as hand-raisers, come to you. They typically find you through organic growth channels like content marketing and email marketing. These leads are typically more ready to buy because they’re actually looking for a solution to their problem.

Outbound leads are prospects you connect with through paid marketing and cold outreach. They’re usually completely cold leads who haven’t even heard of your brand before, so they typically take longer to convert to customers.

Ideally, your team needs to do both inbound and outbound lead generation in SaaS to maintain a healthy pipeline. 

Inbound lead generationOutbound lead generation
Relies on organic growth channels like social media posts, search-optimized blog content and referrals from reviews.Uses paid marketing campaigns like social media ads, Over-The-Top ads, Pay-Per-Click ads, and Local Service Ads
Higher quality leads because they show interest first. Lower quality leads because you’re casting a wide net. 
Harder to personalize for one person. Mostly segments. Easier to personalize for one person.  
Reaches a lesser but more tailored audience. Reaches a large but less tailored audience.
Easier to measure the results Harder to measure efforts 
Cost less over a longer durationCost more over time 
Less control over sales processMore control over sales process

Lead Capture And Retrieval

Lead capture determines which prospects to connect with and how to manage their lead data. You can use forms and analytics tools integrated with your website to collect lead information. (Don’t worry; there’s plenty of lead capture software to help you.)

Lead retrieval helps you capture customer data, qualify leads, and enhance your lead management. It’s all about determining which inbound and outbound leads are the most likely to close. 

Lead Qualification

Not every inbound and outbound lead is worth your revenue team’s time and energy. You have to qualify your leads so your sales reps don’t get stuck in meetings with prospects who aren’t likely to buy your product. Your qualified leads are basically the ones that are ready for the sales process.

You can qualify your leads asynchronously with detailed demo forms or even a lead scoring model. Or you can run discovery calls with your SDRs (sales development representatives) to figure out if they’re worth booking time with an AE (account executive).

Lead Conversion

All the lead generation, lead capture, lead retrieval, and lead qualification is leading up to one critical moment: lead conversion. The marketing team hands over qualified leads to the sales team to provide personalized outreach and follow-ups until the deal closes.

This is the moment of truth. It will determine if all that effort was worth it. Not to be too repetitive, but if you have a strong lead management process, you should see a high percentage of your leads get to this point in the sales funnel.

Components Of Lead Management

Now that you know the whole lead management process, what are the components you need to understand? Here’s how everything breaks down.

Types Of Leads

The types of leads you value will depend heavily on your team’s definitions and processes. Is your company focusing on sales-led growth? Product-led growth? A different sales model?

In any case, here are the types of leads you may want to track:

  • MQL (Marketing Qualified Lead) - A lead that marketing has determined meets the minimum criteria to pass over to the sales team
  • SQL (Sales Qualified Lead) - An MQL that sales has determined meets their minimum criteria through either a qualification call with an SDR or lead scoring
  • PQL (Product Qualified Lead) - A prospect who has some experience with your product already (free trial of your product, interactive demo, etc.)
  • IQL (Information Qualified Lead) - A less common lead category where a prospect provides their contact info in exchange for something of value like an ebook, case study, or webinar
  • Service Qualified Lead - Another less common lead category where a prospect indicates to your service team they’re ready to have a conversation with one of your sales reps

Lead Scoring 

Assigning a numerical value to your prospect with lead scoring will help you route the right leads to the right rep faster. Remember, speed to lead is the most important factor in closing the deal. In fact, organizations that use lead scoring see a 77% increase in ROI.

Lead scoring ranks your leads based on demographic info (like whether they fit your ideal customer profile) and behavior (like opening an email, registering for a webinar, or visiting certain landing pages on your website). 

Lead scoring example on a yellow background
Speed to lead is one of the most important factors in closing a deal. A lead scoring model helps you quickly qualify and pass the right leads to the sales team.

Lead Segmentation

Segmenting your prospects will help you keep leads organized. That way you’re sending the most timely and relevant outreach to the right leads. The most basic segmentation is to figure out if they’re cold (still unaware of your brand and the problem you solve), warm (showing some interest through lead scoring), or hot (nearly ready to buy your product).

Lead temperatures on a yellow backgroundCold leads = learningWarm leads = interestedHot leads = ready to buy
The most basic lead segmentation categories are cold (still unaware of your brand and the problem you solve), warm (showing some interest through lead scoring), or hot (nearly ready to buy your product).

Lead Nurturing

Once you’ve segmented your lead list, you can set up lead nurture campaigns to stay top-of-mind with the most relevant prospects. Lead nurturing will ideally guide your prospects through your sales funnel until they become customers.

Only 3% of your prospects are actually ready to buy now, which is why nurturing all your other leads is so important. Companies that implement an impactful lead nurturing strategy wind up generating 50% more sales-ready leads and see a 33% lower cost per lead.

You can nurture leads with retargeting campaigns, email marketing, relevant webinars, and more. Here are 5 lead nurturing examples if you need some help getting started.

Pyramid of buyer readiness on a yellow background. Only 3% of leads are active buyers and 7% intend to change. The remaining 90% are in varying stages, but are not being ready to buy.
Most leads aren't ready to buy, making lead nurturing crucial. Companies that implement an impactful lead nurturing strategy generate 50% more sales-ready leads and see a 33% lower cost per lead.

Lead Tracking

Tracking sales leads will help you monitor leads as they move through your sales funnel. Lead tracking helps you prioritize the best leads, identify the most effective lead sources to prioritize spending, and more accurately forecast your pipeline. The more lead gen metrics you know, the better you can allocate your team’s resources and grow your top-line revenue.

How To Get Started With Lead Management

Now that you understand what lead management is and why it matters, how do you get started? Here are the steps you can take to manage your sales leads so they convert into revenue.

Define Your ICP

It’s going to be hard to target the right potential customers if you don’t know who they are. Before you do anything else, figure out what your ideal customer profile (ICP) looks like. 

Here are some questions to ask:

  • What are their hopes, dreams, and desires?
  • What does a day in your dream buyer’s life look like?
  • Where does your buyer hang out and congregate?
  • What is your buyer’s preferred form of communication?

Once you know who you’re trying to reach, you’ll have an easier time managing your leads and nurturing them through the sales cycle.

Create A Lead Management Strategy

After you’ve figured out your ICP, it’s time to create your lead management strategy. Think of this like being a skilled gardener. Your garden (your market) is full of various types of plants (potential paying customers or leads). Each of your leads needs a specific kind of care. To make sure you’re growing each unique account in the right way, you need to capture data about them, segment campaigns, and score them in your CRM.

Invest In Lead Management Tools

Knowing your ICP and developing your lead management strategy are the first two steps to take. But once you know who you want to reach and how to reach them, you can start tracking and automating everything with the right lead management tools. 

Types Of Lead Management Tools

There are endless lead management systems to choose from, and it can be overwhelming. We’ve been testing and reviewing lead management software since 2022—and we’re revenue operations leaders ourselves—so we know how critical the decision is. Here are the first places we recommend you look.

Lead Management Software

There’s so much lead management software available, which can make it challenging to streamline it. Here are the 18 best lead management software options we’ve found. And if you’re a scrappy startup, here’s free lead management software you can try first before you buy it. Some of the software even has plans that are free forever.


The CRM (customer relationship management) software is your main hub for managing your leads, so it's crucial to choose the right one—one that you can customize based on your business’s unique needs. Of course, there are many CRM options to choose from, so again, we’ve compiled a list of the best CRM software to help you choose. There’s more than just Salesforce, HubSpot, and Pipedrive out there.

Marketing Automation Software

Targeting your customers everywhere they are (email, web, social, text, etc.) is exhausting (impossible even) if you’re doing it manually. That’s why marketing automation software is such a worthwhile investment.

Sales Software

There’s so much sales software to help you with lead management. It goes beyond the CRM into numerous integrations, including revenue intelligence, sales enablement, pipeline analytics, demo tools, and so much more. While you should definitely start with a CRM and lead management software, you’ll want to expand your tech stack so your sales team can stay as efficient and effective as possible.

Lead Management Best Practices, Tips & Strategies

You know you need to manage your leads, but what are the best practices, tips, and strategies that will make you great at it?

Lead Data Management

Your pipeline is only as good as your data. If you have the right lead data, you’ll know which prospects to focus on and more accurately predict your pipeline health. CRM data management will help you compile more accurate lead data from all the sources potential customers are engaging with.

Lead Intelligence

How much do you really know about your sales leads? Which are good leads? Which aren’t? All the data your company collects about prospects can be considered lead intelligence. This includes contact information, demographics, page views, company information, and brand interactions.

Lead intelligence will help you provide more personalized lead nurture campaigns that will get you to Closed Won more often. According to McKinsey & Company, 71% of consumers expect companies to provide personalized interactions, and 76% get frustrated when outreach isn’t personalized. 

Lead Routing

Proper lead routing is the fastest path to qualifying your sales leads and closing them. It’s the process by which you assign incoming leads to different people on your sales team. You can choose to route leads in a number of different ways, including by territory, deal value, lead scoring, or hierarchy. You can also run lead distribution through round-robin availability. 

There are lead routing software options to help, of course. Salesforce lead routing tools are particularly helpful. If you did this manually, it would take forever and slow down your sales cycle.

More Lead Management Resources to Read

Lead management is an ongoing journey. Here are three of our favorite resources for improving your lead management process now that you’ve got the basics down:

  1. The 5 Core Principles Of Lead Management To Know - If you’d prefer the TL;DR over the ultimate guide, this is a great place to start. You’ll learn how to focus on your ICP, create a lead nurture plan, and ultimately close the most potential buyers possible.
  2. What Is A Lead Management Strategy? Here’s How To Create One - Create a plan to understand potential customers and capture all the data you need to close them. Learn how to build buyer avatars, generate leads through marketing, score leads in your CRM, and more.
  3. 18 Best Lead Management Software Reviewed For 2024 - You can’t do it all on your own. Lead management software will help you streamline the process of acquiring, nurturing, and converting leads into customers.

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By Kate Erwin

Kate Erwin is a writer specializing in revenue technology. She writes for several SaaS companies via Beam Content and has previously managed blogs for sales tech companies like Contractbook and Mailshake.