What Is Lead Management and Why Is It Important?

Mark Kosin
25 minute read
Mark Kosin
25 minute read

Marketing is like a puzzle: it takes a lot of interconnected pieces to fit together just right.

You start with the campaigns, the consumers, your product or service offerings. Then to connect it you bring in your lead generation strategies, your tech stack, and your partners. But sometimes you can bring all these parts together and still not get the full picture and “complete” the puzzle.

For many, the missing piece of the puzzle is lead management.

Lead management is the process of capturing, tracking, and managing inbound leads for conversion or distribution. It is the way that businesses can analyze and manage their sales funnel. It also provides a crucial link between the performance of the marketing and sales teams.

What makes lead management so important is that it follows a lead throughout the entire customer journey. Lead management can include the following: lead tracking to learn the attribution for inbound leads, lead sorting so that leads are efficiently organized and accounted for, and lead distribution so that leads can be routed to the right destination for conversion.

A cloud-based lead management system handles all these tasks and makes sense of the resulting data. Also known as lead management software, a digital lead system allows for the tracking, organizing, and distribution of leads in one cloud-based platform.

For businesses looking to get the final piece of their marketing puzzle, understanding and leveraging a lead management strategy and lead management software is critical.

What is Lead Management?

Lead management begins with a business or affiliate marketer generating leads. As leads are generated, it becomes necessary to manage the influx of leads with an eye towards efficiency and earning revenue. Lead management is an important tool to make sure that leads are guided along towards conversion in a way that benefits the business and the consumer.

There are differences in inbound leads that can impact how those leads are managed, which is why it is so important to have an advanced lead management system. Not all leads are created equal, and so marketers need to be able to identify how leads are characterized to make decisions about lead distribution and their campaigns.

In fact, there is even a fundamental difference between what constitutes a lead and a customer.

Leads vs. Customers

Sometimes there can be confusion between leads and customers. Both are vital to businesses and should remain the focus of their marketing strategies, but knowing the difference is key to building a successful lead tracking strategy.

Customers are people who the business is actively providing with their product or services: those who have already decided to patronize the business and spend their money. A customer is an individual that has already converted.

Conversely, a lead is a customer who has yet to convert. These are people who have shown interest in your product or service and have taken some action, usually filling out a form or calling a phone number, but they have not made the decision to spend their money yet.

In some cases, a lead might not even be interested in your specific brand, but simply have an interest in whatever product or service your brand provides. Someone who has looked up the best auto insurance rates and called an insurance company is most interested in having their insurance needs met. They are an auto insurance lead—it’s up to the individual business to convert them from a lead to a customer.

Before a lead takes an action, they are sometimes referred to as “prospects,” as they are potential (or “prospective”) leads or customers. A lead funnel is a brand’s efforts to identify prospects, then turn them into leads and eventually have them become customers.

The lead funnel should be the centerpiece for any brand looking to generate leads and convert them into customers. The best way to ensure an optimized lead funnel is implementing lead management and lead tracking software.

Lead Management Process

The lead management process is the workflow for leads as they move through your lead funnel and into your business for conversion or distribution. The fundamentals of the lead process are lead generation, customer acquisition, and lead distribution.

Lead Generation

Lead generation is the broad effort to identify potential leads and customers and encourage them to engage with your content and explore your brand’s offerings. Lead generation can take many different forms, from digital efforts like PPC ads and blog content, to advertisements on podcasts or television, or offline methods like billboards.

In some cases, lead generation can be outsourced to third party partners, often known as affiliate marketers. Companies work with groups of affiliate marketers, known as affiliate networks, to get access to a vibrant source of many leads.

Customer Acquisition

With customer acquisition, the lead management process enters the lead funnel and brands seek to guide a lead along a path that will eventually end with them converting into customers. A major part of customer acquisition is the nurturing of leads. Brands must provide their leads with content that can prime them for conversion—emails, blog articles, white papers, and one-on-one interactions are all vital in this process.

Lead Distribution

While many brands are focused on converting the leads they generate, others (like affiliate networks and other lead generators) are set up to distribute their leads to businesses who would like to purchase the leads and convert them. Many companies put their focus on advertising through these affiliates, or publishers, and then buy the leads at a competitive price. The process of strategically sending leads to either internal sales groups or to a marketplace of interested third party partners is known as lead distribution.

Lead Management Components

The process of lead management is defined by how inbound leads are received, evaluated, nurtured, and distributed to either your sales team or a third party. When it works effectively, with all the right components, lead management should set up the leads you generate for conversion.

When businesses are evaluating the benefits of lead management, they will often identify three key components: lead definition alignment, lead scoring and nurturing, and lead management software.

Lead Definition Alignment

It’s not uncommon for internal departments to disagree over what constitutes a lead. In marketing, leads are seen as any prospect who engages with a marketing CTA, be it by providing an email or dialing a number, but sales departments may only think of leads as ‘qualified leads’—meaning an individual who is truly engaged and more likely to convert.

These discrepancies can be cleared up with lead definition alignment—an internal process of defining what constitutes a lead. Paying attention to lead definition alignment takes away any ambiguity that might exist between departments or partners.

Lead Scoring and Nurturing

A critical part of moving leads through the lead funnel comes from lead scoring and lead nurturing. Lead scoring is the process of ascribing a numbered value (or lead score) to a lead to quantify the value of the lead, or how likely a lead is to convert. Individual businesses can set up their own lead scoring system, or decide if they have enough volume to implement such a system.

Lead nurturing is the process of moving a lead through the lead funnel and closer to conversion with targeted marketing materials, often triggered through automation, such as emails or use of other informative content. Products or services with more complexity and value may require a great deal of lead nurturing—sometimes the lead nurturing process can take weeks or even months.

Lead Management Software

The way that companies accomplish their goals of lead nurturing or lead distribution comes from implementing lead management software. Using lead management software, it is possible to automate many functions, such as getting leads to third party buyers or sending emails as part of a drip campaign. Lead management software also helps to organize leads and lead data, making operations more efficient and providing analysis that fuels growth.

The Problems Solved By Lead Management

Businesses employ lead management because it helps solve problems that might otherwise exist, especially for businesses that don’t utilize automation from lead management software.

Manual Lead Sorting – Businesses that use manual methods to collect and sort leads are going to run into errors and will find it impossible to scale. With lead management software, businesses can automate their lead sorting with filtering and accessing lead details that can be used to separate high quality and lower quality leads.

Lost Leads – Many types of manual lead solutions, such as Excel spreadsheets or desktop folders, are prone to human error which can cause some leads to be lost. Lead management software ensures that every lead is accounted for, meaning that businesses don’t miss out on revenue because a lead was overlooked.

Wasted Reject Leads – It’s not uncommon for organic leads to get rejected because they don’t meet your criteria, but lead management can open opportunities for this “decline traffic”. Automated lead management can help you distribute organic reject leads to interested third parties.

No Lead Nurturing – Without lead management, it becomes very difficult to do the necessary work of nurturing your leads. Lead management software solutions can be used to automate your lead nurturing by sending emails or SMS messages to leads to move them further through the lead funnel.

Not Maximizing Revenue – All businesses want to be able to make decisions that will help them increase the return on their marketing investment. Lead management makes it possible by providing key data in fast-loading reports that can give marketers a precise indication of where to focus their efforts.

Why Use Lead Management?

As companies fit together the puzzle pieces of their lead strategy, invariably they get to the point where they need lead management to connect them all. Any business that works with leads should have a singular strategy to organize and manage their leads.

A lead management solution will not create a strategy, but it will give marketers a strong foundation from which they can build out their gameplan.

Why is Lead Management Important?

Businesses who don’t use lead management software may not be aware of the pitfalls of not having lead management. There are plenty of organizations that still rely on manual lead systems or don’t have a cohesive lead strategy. Doing so can create a number of issues for your business.

Without a lead management solution, your marketing department—and your whole business—is essentially “flying blind.” Companies that don’t use lead management won’t be getting critical attribution data from lead tracking, and as a result won’t know how to adjust their lead generation and marketing initiatives.

A lack of lead management can make it easier to lose leads or make it difficult to find new value for organic decline leads. Without automation and an easy-to-use interface, leads can slip through the cracks or never end up at the right destination. This is an issue of great concern because it amounts to a business watching their best efforts to generate leads become wasted. As a result, it will become nearly impossible for a business to scale and grow without accounting for every lead.

Lead management prevents these issues from befalling a business, paving the way for more strategic efforts that create long-term success.

How Does Lead Management Improve Your Marketing?

Lead management is a clear way for brands to have more control over their lead efforts. There are a number of practices that businesses can undertake that will have a positive impact on their marketing.

Targeted Efforts

To start, lead management helps businesses dramatically improve their marketing by giving them a way to create more precise marketing campaigns. You can use lead tracking to learn the attribution of your leads, showing which marketing efforts drove the most leads. Then, you can leverage that data to make strategic decisions about where to invest more energy and resources. By creating a targeted marketing strategy, and not just hoping for the best, businesses can see major improvements on their return on investment (ROI).

Quick Response Time

When leads aren’t organized, it can take time to respond to interested leads. If leads don’t get contacted soon after they have taken an action, brands will have a much harder time converting that lead.

Lead management ensures that new leads are organized, while also providing companies with automated tools that let them quickly respond to new leads. With automation from lead management software, leads are significantly less likely to get lost or forgotten, which improves the likelihood of them being converted.

Redistributing Decline Lead Traffic

It’s not uncommon for lead generation businesses to take in a certain amount of leads that don’t meet their specific criteria. In many cases, this can cause a number of otherwise fine leads that had been generated to be wasted. However, a business using lead management software has an opportunity to create new value from those leads.

With lead management, businesses will be able to access tools that let them redistribute decline traffic to interested buyers. They can build their own settings so that certain organic leads that they are not able to use can become additional revenue after being sent elsewhere.

Ways Lead Management Benefits Businesses

There are a number of ways that companies can take advantage of lead management to improve their marketing. With these innovative advances, it becomes easy for businesses to reap the many benefits that can be directly derived from using lead management software.

Benefits of Lead Management

  • Data-driven Marketing Strategy

When companies use lead management, they get access to valuable data about their inbound leads and customers. This attribution data can be viewed in helpful reports that show side-by-side comparisons and reveal top performing publishers. All of these insights can be used to build an optimized marketing strategy based on data.

  • Transparent Customer Journey

Without lead tracking and lead management, it’s difficult for businesses to have a complete picture of each customer’s journey. This is critical, because knowing what marketing efforts brought in a lead, especially what journey eventually led to a lead conversion, can tell you how well your current workflow is operating. Lead management provides the tools to see the entire customer journey.

  • Streamlined Sales Process

It’s critical that businesses get a clear view of their customer journey because this process can also see where automation can be implemented to help streamline the sales process. It might be possible to automate an email drip campaign or set up automated calls to leads that take manual work off the desk of the sales team, letting them be more productive and focused.

  • Multi-channel Integration

A key benefit of lead management is when businesses are able to use lead management software that has the ability to tap into multiple digital channels and other cloud-based solutions. Having integrations for calls, email, and other critical marketing platforms is a substantial benefit from using lead management software.

How Does Lead Management Work?

Lead management works as a critical bridge between multiple parts of your business, notably linking your marketing efforts to your sales team. By understanding how lead management operates, company leaders can see how the different aspects of lead management can impact every aspect of the business, right down to the bottom line.

Lead Management Step-by-Step

The lead management process can take many forms: some businesses have a lead funnel that can nurture leads for weeks, while affiliate networks and others are set up to generate leads and quickly distribute them to lead buyers. There is, however, a general process by which lead management works—one that is worth taking a step-by-step look at.

Step 1: Capture Leads

The critical first step is that of lead generation and lead capturing. This is the beginning of your lead funnel and requires businesses to ask many critical questions: what kind of leads are being targeted? What kind of information are these leads searching for?

Determining the answers to these questions allows the formation of a lead strategy.

Step 2: Nurture Leads

The next step in the lead journey should be lead nurturing. In many cases, this makes up the majority of the lead funnel. Your lead funnel should bring leads along the three stages of Awareness, Consideration, and Conversion. During this process, leads should receive emails and targeted ads that nudge them towards a better understanding of your brand and its benefits.

Step 3: Distribute Leads

In certain cases, businesses may distribute their captured leads to other brands and allow them to engage their own lead nurturing program. This can be the relationship between a lead generator or affiliate network that is working with a direct advertiser. Lead distribution also requires a data-driven strategy: the right lead management software will offer automated routing that promises profitability for all leads distributed.

Step 4: Lead Conversion

Making the leap from nurtured lead to conversion is a question of timing, effort, and strategy. Push leads through to sales too quickly and they won’t be marketing-qualified or primed to convert. Spend too long nurturing your leads and they may lose interest or go with a competitor.

Lead management shows its immense value on helping marketers get their leads the right amount of engagement before it’s time to convert.

Step 5: Lead Tracking and Analytics

The final step and one that can have the most long-term impact on a business’s success is focusing on lead tracking and analytics. The process of tracking and measuring your leads and lead marketing is critical to understanding how your lead strategy can be improved.

There are multiple ways to get critical data

  • Measure marketing performance with lead tracking
  • “Close the loop” on your leads by tracking lead conversions
  • Use analytics to measure the ROI of sales and marketing

Lead Analytics and Reporting

There are many features of lead management that make it valuable to businesses, but the aspect that does the most to help companies build long-term success is lead analytics. Using lead analytics, and analytical reports, marketers are able to see the most positive impact on their lead strategy.

Lead tracking is the tool that allows analytics data to be compiled and leveraged by marketers; this process captures data on all of a business’s lead generation efforts. This means discovering whether leads came from blog forms, PPC campaigns, email marketing, or offline marketing methods such as billboards or subway ads.

Once analytical data is collected, marketers leverage reports that help to reveal insights. Comparison reports offer side-by-side views of performance so that numbers can be judged on a day-to-day, week-to-week, or even year-to-year basis. Other reports can show cases of duplicate leads or give snapshot views of publisher traffic, all to give marketers perspective on their lead efforts.

With the knowledge pulled from lead analytics and reporting, marketers are able to make adjustments that can improve their ROI and pave the way for company growth.

Best Lead Management Practices

When a business uses a lead management solution, success can be achieved by following only the best lead management practices in the process of capturing, nurturing, and distributing leads.

It can be important to utilize certain best practices across all aspects of lead management—one such guideline is to focus intently on lead quality or leveraging predictive analytics. Generating and acquiring more quality leads is a worthwhile goal, because it lets companies get more value out of every lead.

How to Focus on Lead Quality

Filter for Quality – Take every opportunity to optimize your lead funnel with filters so you maximize your chances of acquiring more quality traffic.

Use Buyer Personas – Targeting the audience groups that are most likely to convert will help you get better lead quality. This can be done by creating buyer personas: these highly researched profiles give marketers a firm idea of critical audiences.

Campaign Testing – It makes sense to test campaign messages and efforts wherever possible. Simple A/B testing of email subject lines or PPC headlines can reveal important trends in your marketing efforts, opening up the door to create higher-performing campaigns.

How to Leverage Predictive Analytics

Predictive analytics are a tool that marketers can use to make decisions about the future of their campaigns by viewing predictive modeels that show likely outcomes of campaigns.

Marketers begin by employing lead tacking to get data on their inbound leads from all their campaigns. This data is then plugged into predictive models that use past campaign performance to reveal likely outcomes of future campaigns.

What makes predictive analytics especially useful as part of a lead management platform is that marketers can change certain variables to see the impact of changes to campaign performance.

By using predictive analytics and adjusting the times of your campaigns, what states you’d like to run in, or other targeting data, you’re able to see how these modifications would affect your outcomes without risking your marketing budget. In this way, predictive analytics removes the idea of “trial and error” from your marketing strategy.

In total, lead management has many moving parts that all require a high level of attention to operate. The best way to connect all your lead management operations is with a lead management software solution.

Lead Management Software

With all the clear benefits of lead management for businesses, it’s no surprise that there are a wide array of lead management software solutions for marketers to pick from. Once you know all the value that lead management provides, it is important to recognize that lead management software is what brings all the benefits to your team.

It’s important to know how lead management software works, as well as what companies should be looking for in a lead management software solution. The ideal lead management software should not only cover all the basics of lead management, but also offer an assortment of tools that make it easy to leverage all your lead data, plus integrations to other platforms and solutions.

Understanding the capabilities and options that are available with current lead management software is key for businesses that are looking to improve their lead strategy by implementing lead management software.

How does lead management software work?

Lead management software can vary depending on the platform. It’s important that businesses look for lead management platforms that have an intuitive display with a wide host of functionalities. LMS SYNC is the lead management platform from Phonexa.

Phonexa lead management software has the following key components

  • Dashboard
  • Performance Summary
  • Lead Details
  • Analytics and Optimizations


The dashboard gives an overhead view of all the lead management key performance indicators (KPIs). Here, both affiliate publishers and lead buyers can see how their lead generation campaigns are performing.

While the dashboard is set up to show KPIs for both lead generators and lead buyers, users can edit which tiles are visible, customizing the dashboard so it only shows the information that is most relevant to the user. It also makes it easy to compare performance in relation to the prior day or week. Users have the ability to measure results using a line item graph that makes for an easy visual comparison.

While the dashboard provides you with an overview of lead activities and campaigns, the Phonexa platform allows users to get more detailed insights from a variety of reports, starting with the Performance Summary.

Performance Summary

The Performance Summary is a hub detailing where all lead traffic is coming from and where it’s going. It gives users the ability to get deeper insights into publishers and buyers.

Users can view lead data in a number of ways with grouping options for date, hour, or source. Once they’re grouped, users have the option to filter summaries on each page based on date range, publisher source, and more.

In this interface, users are able to analyze lead quality by looking at such metrics as average call time, duplicate lead percentage, and how many leads were sent versus how many were sold. More specifics about a user’s leads are available using Lead Details.

Lead Details

The Lead Details section of LMS SYNC gives users a deeper look into each individual lead.

Utilizing the options in this section, users can pinpoint the most relevant data sets and track unique customer journeys.

It is possible to get a line-by-line description of each lead, including whether the lead was sold or rejected, the time stamp, where the lead came from, which buyer it matched with, and—especially significant—whether or not the lead resulted in a product or service sold, a data point visible in the buyer disposition column.

Analytics and Optimizations

LMS SYNC users access analytics and optimizations in order to get a competitive edge for their lead management by creating opportunities for a better return on investment and allowing the discovery of new sources of revenue.

Users access the Comparison Report in order to identify important trends and opportunities by viewing different data sets side-by-side. It’s possible to compare up to four unique batches of information and spotlight key performance indicators.

Some of the most useful Analytics and Optimization tools include:

The Per State Comparison, which lets users zero in and fine-tune campaigns from a state analysis level. Using the Per State Comparison, businesses make decisions regarding the states to focus on by seeing which states are netting the best ROI.

The Traffic Flow is a report that lets users analyze the quality of lead generators by revealing if a lead has been seen before. This is a key component for users who want to know whether publishers are providing a “first look” on the leads they send.

The Filter Analyzer is a way for users to uncover “hidden” revenue. The Filter Analyzer identifies where buyers are losing volume as a result of any filters that are set up.

Lead Management Integrations

A key determination of whether lead management software is useful to a business is how well the software integrates with other solutions and parts of a company tech stack. There are three significant categories for these types of integrations: additional marketing channels, CRMs, and data enhancement solutions.

Marketing Channels

With incredible reach and capabilities, Google AdWords and Google Analytics are critical assets for any marketer. Phonexa’s lead management software offers integrations with these Google platforms, making it easy to share data and access critical Google Analytics reports.


Businesses using lead management are smart to seek out integrations that can work with the CRM (Customer Relationship Management) software they may also be using. In order to provide users with the tools for a truly integrated marketing strategy, Phonexa lead management software integrates with widely used CRMs like Salesforce and Hubspot.

By integrating Phonexa lead management software with CRMs, users are able to build a bridge between their lead management efforts and any nurturing strategies or customer retention.

Data Enhancement 

Compliance and lead certification are a significant part of any lead management strategy. It’s important, then, that marketers are able to integrate tools that allow them to monitor data and protect against fraud.

Phonexa users are able to integrate their lead management software with established providers like TrustedForm from Active Prospect. Being able to work with an impartial issuing authority is important for flagging sensitive data and providing peace of mind.

Lead Management Software vs. CRM

One common question that arises is the difference between lead management software and a CRM. These solutions are used in similar ways, but there are important differences. Most notably, a lead management system is most important in facilitating the customer journey from prospect to lead to customer. A CRM helps with that journey, but goes beyond with an eye towards customer retention, cross-selling, and customer service.

A simple way to remember is that any business whose primary focus is leads will get the most out of lead management. Many companies have a sales funnel that is largely concerned with generating leads and getting them sold with no need to keep the lead in a customer lifecycle afterwards. This is the case with many performance marketers, financial services, or other affiliate or lead generation professionals.

Businesses that use a CRM are often required to keep in touch with customers after the point of sale. This can apply to a number of companies that work in tech, insurance, or other service-based industries. CRMs are for businesses that require maintaining a long-term relationship with a customer, hence the description as “Customer Relationship Manager.”

Many have come to view the CRM as a “must-have” for businesses, but lead management software like Phonexa can actually be more efficient for companies when it comes to moving prospects through the lead funnel and providing options for lead nurturing. As a multi-channel solution, Phonexa lead management software has functionality for email marketing and retargeting that provide great benefit to users who don’t need the extraneous capabiltiies of a CRM.

Lead Management: The Final Puzzle Piece

For any business that is dependent on leads, pulling together all components of their lead processes can be a bewildering challenge. With traditional manual methods of lead management, leads can be lost or ignored, and even when leads move through the lead funnel there is no automated method to nurture them.

Marketers can also struggle to create effective campaigns without key data that can be gathered from lead tracking. Without lead management software, marketers could be wasting portions of their budgets on efforts that aren’t successful.

Even if a business is able to fit together all of these disparate efforts, it may still leave them with gaps in their funnel or create difficulties as they try to integrate with other marketing platforms or parts of their tech stack. It can be impossible to see the full picture.

This is how lead management brings value to marketers: bringing it all together. With lead management software, all stakeholders can get a clear vision of their lead funnel and operations. Businesses are able to integrate their lead management with other platforms or partners. Reports make it easy to see if any piece of the puzzle is missing, and with the right lead management solution provider business have help in connecting everything.

For any company, their leads represent their current and future success. The last thing marketers want is an incomplete picture. Lead management software ensure that every part of the lead journey is visible and that, like a perfect puzzle, all the pieces fit together just right.

Got Questions?

Get in touch! We are available 24/7.

Mark Kosin avatar
Mark Kosin
Mark Kosin was a Content Writer at Phonexa, covering topics such as SaaS technology, call tracking, lead generation, and digital marketing.
Related Posts

How To Turn Phone Calls into Quality Leads With Phonexa

We’ve put together this comprehensive call tracking guide to share our knowledge and help you...

Read more

Comprehensive Guide to Mastering Affiliate Marketing on LinkedIn

Affiliate marketing on LinkedIn involves leveraging the platform’s professional network to promote products or services...

Read more
SGE (Search Generative Experience) & SEO Strategy Adaptation SGE & Future of Organic Lead Generation

Google SGE: Adapting Your SEO To Search Generative Experience

While everyone is raving about the martech power of ChatGPT, another big storm is brewing...

Read more
Get Your Personalized Consultation Now
Book a Free Demo