Data is the lifeblood of a sales team. Without it, you’re selling blind, constantly making the wrong pitch to the wrong customer at the wrong time, and, as a result, constantly getting rejected.
To be effective, a salesperson needs a deep understanding of the customer journey and what sales leads respond to at each stage of the process. That requires extensive tracking of certain metrics, with one of the most important things to monitor being the current status of each lead.
By tracking lead status, you not only collect that all-important data, but you know what interactions have already happened and, therefore, what the next interaction with that potential customer should be to get them closer to making a buying decision. This can have a dramatic impact on your conversion rate and overall revenue.
This guide breaks down what tracking lead status is all about, why it’s important, and how to implement it in your own business.
Overview: What is lead status?
The lead or sales status is where a potential customer stands in the sales pipeline. For example, the lead status of a customer who has just been identified would still be in the lead qualification phase, whereas a customer who has been exposed to multiple sales pitches and has expressed interest in the product may be considered ready to close.
As sales teams generate leads, it is important that they track the lead status of each potential customer so they know which action to take next, such as scheduling a pitch meeting or attempting to get a purchase decision.
3 benefits of tracking lead status
Tracking the lead status of prospects provides the following three benefits to organizations.
1. More conversions
By tracking sales lead stages, a salesperson isn’t going in lacking important information when they talk to a customer. They know specifically how much knowledge the customer has and whether it’s a warm lead or a cold one.
As a result, they are aware of what to say and when to ask for the sale, and, consequently, they are more likely to have a higher conversion rate. A salesperson is also better able to anticipate obstacles and proactively overcome them before the customer even asks.
For example, if a certain lead status is when a customer typically balks at the price, the salesperson can be prepared with a range of financing options to present rather than have to go back and get the information for a follow-up call.
2. Identify best sourcing outlets
By tracking lead status, salespeople are better able to identify the best sourcing outlets, which improves the lead qualification process and ensures they’re getting prospects who are more likely to buy.
By identifying a customer’s lead status at each step in the journey, you create an audit trail and data you can crunch later to see which customers seem to respond better to your pitch and identify the sources giving you those leads.
3. Enhanced understanding of the customer journey
Monitoring lead status also helps you and your sales team to better understand the customer journey. You’ll see exactly where your sales pitch typically stalls out, which gives you an opportunity to improve how you approach the customer at that specific lead status.
For example, you may find the customer declines when you attempt the close, indicating that you need to work on either your closing techniques or on establishing value during your pitches.
3 sample values for tracking your lead’s status
In addition to tracking lead status, it’s helpful to record certain values and data to examine later. Here are a few examples of some data points you could track along with lead status.
1. Opportunity size
Not all customers are created equal, and some are more valuable than others. So, by recording the average opportunity size of a lead when you closed on them, you will better identify which lead sources are more profitable than others, allowing you to focus on them and get more targeted leads as a result.
2. Conversion rate
Conversion rate is always important to track when you’re in sales. You want to understand how successful you are in convincing customers to buy your product. Generally, a higher conversion rate indicates a good sales operation, and a low rate indicates it needs some work.
It’s not necessarily bad to have a low conversion rate if you’re closing on big deals, but if your opportunity size is limited and your conversion rate is low, it’s time to take a closer look at your operation. By making a note of a converted sale as part of your lead tracking, you’ll provide this important data point to your team to analyze afterward.
3. Win rates by opportunity owner
Tracking win rates for individual members of your sales team will help you understand better who are your elite performers and who needs additional training. Detailed lead status tracking should help you identify specifically when team members make mistakes, giving you a chance to make a simple adjustment to dramatically improve their conversion rates.
3 best practices when working with the status of leads
Before you start tracking lead status, learn and implement these three best practices to maximize your chances of success.
1. Develop an intuitive approach
If you’re not careful, you risk giving your sales team a massive new data entry chore that eats into their sales activities and actually reduces your sales. The purpose of tracking lead status is to help your team, not hinder them, so you need an intuitive and simple approach that fits seamlessly into their current process.
It should be easy for a sales team to manage and quickly allow them to identify areas for improvement. It should also be flexible enough to adjust if changes in the market make that necessary.
2. Invest in a CRM
Customer relationship management (CRM) software does a lot of lead status tracking automatically, so why force your team to reinvent the wheel? Plenty of CRM software options are inexpensive or even free, so cost shouldn’t be an obstacle. And they can automate a lot of tasks and crank out custom reports with minimal manual entry on your team’s part, allowing them to focus on their customers.
3. Track as much as possible
If it’s not too much of a hindrance on the team, track as many lead statuses as you can. You never know when that data will come in handy. Any interaction with a potential customer should be logged so you can fine-tune the customer journey.
Better to collect too much data than too little — as long as it isn’t time-consuming for the team, that is. However, a CRM should be able to help you here, so shop carefully for one that fits your business.
Overhaul your data-tracking practices
Chances are, your data tracking leaves a little to be desired right now. That’s OK since it’s a constant struggle for many businesses. But now that you know you need to track this critical information, it’s a good time to sit down with your team, figure out which metrics you need to track, and figure out a way to do it.
That probably means CRM software, so first come up with the metrics you want to track and how you want to do it, and then try out a few software options to see which ones do it best. It shouldn’t take long to do this, and it will have a big impact on your sales team’s effectiveness, so don’t delay.