Lead Generation vs Lead Management: 6 Key Differences
In this article, I’ll explain what the two terms mean and how lead generation vs lead management differ in several ways.
Lead generation and lead management are two distinct but interconnected aspects of the sales process.
To put it simply, lead generation is at the top of the funnel, bringing in new interest, while lead management takes those interested leads and follows them through their buying journey.
Combining the two processes produces customers who directly generate revenue for your business.
In this article, I’ll explain what the two terms mean and how lead generation vs lead management differ in several ways.
What is lead generation?
Lead generation is primarily a marketing process that attracts potential prospects towards your products/services.
The intention is not to push their interest into a sale right away. Instead, it is just to pique their curiosity enough to get them into exploring your offers.
Lead generation practices require creating free, valuable resources that solve a prospect’s genuine concerns. And in return for your content, you ask for a way to contact them in the future, usually their email address.
For example, you could generate leads through a business calculator on your website. Allow the users to explore it, and after they’ve used it, ask for their email address so you can send them more detailed insights about their calculation.
This is a fair deal because you only get their contact details consensually after offering a helpful solution.
What is lead management?
Lead management is a broader term, a combination of marketing and sales, that includes lead generation. It is the process of following a prospect’s journey from their first interaction with your business until they finally become ready to be a paying customer, and then maximizing the money they bring into your business.
The key stages of lead management include:
- Lead generation: Creating the interest of potential prospects in your product/service and capturing their contact info
- Lead qualification: Assessing which leads are most likely to convert into customers based on their level of interest and how closely they match your ideal customer profile
- Lead nurturing: Maintaining regular, personalized communication with these high-quality leads to move them closer to making a purchase
- Lead distribution: Assigning your nurtured leads to the right sales representatives
- Lead conversion: Turning nurtured leads into paying customers via sales strategies, such as limited time offers, promotions, etc.
Lead generation vs lead management: Key differences
Here’s a quick overview table of the differences between lead generation vs lead management.
In the following sections, we’ll look at these differences in detail.
1. The Objectives
Essentially, lead generation aims to increase the volume of leads coming into your sales funnel, which means making sure there’s a consistent flow of new opportunities.
At this point, you don’t care how much money they will bring in or if they will bring any. All you want is to gather the contact information of potential clients to whom you could pitch your product/service.
Leag management, on the other hand, ensures that each lead information is utilized to the best capacity. The purpose of managing leads is to move them through the sales process in a way that maximizes their potential to convert into actual customers.
You want to ensure that no lead is left unattended and that leads are prioritized based on their likelihood to convert.
2. Primary Activities Involved
Based on the objectives described above, both lead generation vs lead management use a different set of activities.
Lead generation, for example, requires campaigns that will draw people in.
Content marketing, which requires creating genuinely helpful and SEO-optimized content for the web and social media platforms, attracts a lot of new people who then check your website out.
According to Forbes, 74% of companies agree that content marketing brings in new leads.
Running ads on Google or social media is another common lead generation strategy.
Many businesses employ email marketing campaigns that offer valuable resources like eBooks or webinars in exchange for contact information.
Lead management, however, deals with what happens after you’ve got those leads. For instance, you’ll track and categorize quality leads in a CRM system to make sure they’re easily accessible and organized based on their level of interest or stage in the buying process.
It requires sending personalized emails or scheduling follow-up calls to build relationships. You also work on qualifying leads to see if they’re a good fit for your business, using scoring methods to prioritize them.
3. The Tools You Need
Since lead generation vs lead management require different baseline tasks, naturally, the tools you use for both also differ.
Lead generation tools are usually marketing automation or social media management software that helps you take charge of your content and advertising.
You also need SEO tools to optimize your content and bring in more organic traffic. Custom form-building solutions to gather customer data are the most important component of your lead generation toolkit.
Lead management tools are more focused towards handling lead data effectively. A customer relationship management (CRM) system is the backbone of lead management. It keeps all your lead data organized, tracks interactions, and helps you see where each lead is in the sales funnel.
Then, there are lead scoring tools, some of which are built into CRMs, that help you prioritize the hottest leads based on their activity. You might also want to use workflow automation tools to connect different apps and automate your repetitive tasks.
4. Type of Interaction With Prospects
Generating new leads requires intriguing interactions that invoke interest and curiosity. At this stage, your communication is pretty broad and you don’t push for a sale right away.
Instead, the interaction relies heavily on sharing valuable content, like blog posts, social media updates, or free resources. In return, you may ask for a simple commitment, like signing up for a newsletter or downloading a guide to get on the prospect’s radar.
Contrarily, lead management leans towards more personalized, two-way interactions. By now, you’ve gathered some information about your prospects, so your communication becomes more targeted. Google reports that according to 90% of top marketers, personalization in lead interactions plays a major role in boosting business profitability.
Lead management interactions include interactions that address the specific needs of your leads and answer their questions. You may send follow-up emails or schedule calls to understand their pain points or invite them to a product demo.
5. Nature of the Effort
Lead generation requires a short-term and campaign-driven effort that focuses on numbers to a great extent. The more leads you generate, the better your chances of converting some of them into customers.
Lead gen processes catch the attention of as many people as possible, even if they aren’t all perfect fits for your business right away.
On the flip side, lead management takes a long-term approach. It nurtures the leads that you already have in your lead management system over time by keeping them in touch through regular communication.
The efforts during lead management are super personalized and targeted to earn the trust of your customers such that when they do finally buy, they'll want to choose you.
6. Key Measurement Metrics
Both lead generation and management are measured through a different set of metrics.
Here are the most important lead generation metrics that determine the success of your content marketing and advertising efforts:
- Number of leads generated: How many new leads you’ve brought in during a specific period?
- Cost per lead: How much did you spend to acquire each lead? You figure this out by dividing your total marketing costs by the number of leads generated.
- ROI for your marketing campaigns: The revenue generated from leads compared to what you spent to attract them
The metrics that measure lead management efficiency include:
- Sales pipeline velocity: How fast leads move through your sales pipeline? It takes into account the number of leads, the average deal size, and the length of the sales cycle.
- Customer acquisition cost: How much does it cost to acquire a new customer, including all the expenses involved in lead generation and conversion?
- Customer lifetime value: How much revenue you can expect from a customer over their entire relationship with your business?
- Sales cycle length: How much time does it take to convert a lead into a paying customer?
- Lead conversion rate: What percentage of leads turn into paying customers?
Generate and Manage Leads with Formaloo!
Formaloo is an all-on-one marketing and sales hub that helps businesses with both lead generation vs lead management.
You can create custom lead gen forms that cater to the unique expectations of each prospect. Unlike standard forms, which yield low conversion rates, Formaloo uses conditional logic, where you ask relevant questions based on user responses.
Formaloo’s custom CRM enables you to manage those leads. You can categorize your data using tables, charts, and Kanban boards based on their status and build an efficient sales pipeline.
Formaloo also lets you create automated marketing campaigns where you send personalized follow-up emails and integrate with HubSpot, MailChimp, and 5000+ other platforms.
Start optimizing your lead generation and management processes today with Formaloo!
FAQs
Are lead management and lead generation the same?
No, lead generation vs lead management are very different, though they are part of the same process where you want to get a new customer. However, lead generation is only limited to creating the interest of as many people as possible towards your product/service. Whereas, lead management follows them right from their first interaction until they make a purchase.
What is an example of lead generation and Lead Management?
An online ad that takes anyone to a website upon clicking where they can download a free resource, such as an e-book, by filling out a quick form with their details and email address is an example of lead generation.
But, in addition to downloading the book, if you send follow-up emails that invite the prospect to check out a free demo and answer any questions they have about the demo, as well as a custom discount to get the product is an example of lead management.
