Acquiring customers starts with lead generation. The more leads you have in your pipeline, the more customers you’re likely to land. Managing leads becomes easier when you have the right software to assist you. But which one is right for your business – customer relationship management (CRM) or lead management software? And what’s the difference?

The Differences Between CRM and Lead Management Software

Software solutions for CRM and lead management are sometimes seen as the same or similar. That’s because both can be used to manage leads. There are, however, some notable differences between the two. Let’s look at where they differ.

Lead Management Software

Lead management software is primarily the tool of sales teams, and focuses on capturing, storing, and tracking leads. Once a lead becomes a customer, the function of lead management software essentially ends.

The benefits of lead management software are:

• Efficient management of inbound and outbound leads. Leads are everywhere – some you may actively pursue while others may come from your Website, social media, or via email queries. With so many leads to track, some may fall through the cracks. Lead tracking software keeps your sales team up to date on the status of all leads in the system and prompts you to take action on stalled or unattended leads.
• Easy lead filtering and segmenting. Not every lead is a potential customer for your business or suited to every product you sell. A good lead management system should help you determine which leads are more likely to convert. You’ll also be able to filter and sort leads for more relevant and personalized targeting.
• More effective lead nurturing. Nurture leads from initial contact to retargeting campaigns.
• Better workflow and team collaboration. Being purely lead focused, lead management systems are designed for more efficient workflow and easy communication between agents.
• Cost effective. Lead management software doesn’t have as many of the features that CRM software has; therefore, it typically costs less to purchase.

CRM Software

CRM is a broader system used by both sales and marketing people to manage the customer’s journey from lead generation through to customer retention.

A lead management system helps you acquire customers. A CRM system, however, helps you increase your customers’ lifetime value. The two systems can complement each other. Let’s say you use both a lead management system and CRM system: The leads that turn into customers can be moved over to your CRM system.

The benefits of a CRM system:

• Manage all sales and marketing activities in one place. For some businesses, it makes sense to have one consolidated system.
• Improve customer service. Some CRM software can integrate with a helpdesk system for more efficient customer support.
• Boost revenue. With a CRM system, you can continue to nurture existing customers and identify opportunities for cross-selling and upselling to increase revenue.
• Scale your sales outputs. Many CRM systems are scalable, allowing you to expand your sales activities as your business grows.
• Get better sales insights. You’re able to generate reports on conversion rates, repeat sales, customer shopping history, and sales trends – all of which can help you in your sales forecasting.

How Are Lead Management and CRM Software Similar?

Both are designed to support sales and marketing teams. As such, they both simplify processes with dashboards that provide a 360-degree view of a prospect profile so agents can quickly see where leads are in the sales pipeline.

Both systems are designed for easy access to information and optimized communication between agents. Features include omnichannel support, call and appointment scheduling, notifications that alert agents to follow up on outstanding action, and reporting and analytics capabilities.

The Right Choice for Your Business

The one you choose depends on the size of your business, your goals, and the structure of your sales and marketing teams.

If you want to cut the clutter and keep your sales team focused, lead management software is more action oriented, pushing salespeople to take the next step.

CRM systems are ideal for businesses that want the convenience of an all-in-one customer relationship management system. CRM systems are also the best option if you want to integrate with other business systems such as accounting and inventory systems.

For small businesses, a lead management system may be a good starting point. As your business grows, you can consider investing in a more robust CRM system if necessary.

If you decide to have both, make sure your lead generation software can integrate with your CRM system for easy transfer of data so your marketing team can seamlessly take over the management of new customers.

When choosing a sales software solution, remember: Not all lead management and CRM software systems are created equal. To find the right one to fit the needs of your business, do some research and take advantage of trial periods to test the product.