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The primary goal for most businesses – lead generation.But, did you know that 63% of marketers say that generating leads is their top challenge? ☹Moreover, after marketers generate leads with all difficulty, not all leads convert into customers. Then, how do you know which leads are most likely to become paid customers? And, how to optimize marketing campaigns to generate quality leads?Here comes the role of lead scoring 🙂Today, I’ll tell you everything about lead scoring – lead scoring systems with examples, why you need them, types, models, and much more. Let’s begin!
Lead scoring is a method of ranking prospects based on their sales readiness. It’s like preparing a scoreboard for the leads where they are assigned a score (generally, on a scale of 1-100) against each criteria indicating sales qualification. Let’s make it simpler with a lead-scoring example. You determine a few data points or criteria that indicate whether or not the lead is ready to convert. In other words, create a list of criteria indicating sales qualified lead, like,
Now, each lead is assigned a score on a scale of 1-100 against these five criteria based on their activity. Then the sum total of their scores indicates whether or not they are qualified for sales. The lead score tells the marketing and sales teams the buying intention of the lead. The higher the score, the more likely they are to convert into a customer.
Research reveals that only 25% of your generated leads are legit and have the potential to convert. And from these legit leads, about 79% won’t lead to sales. That leaves you with 5 customers out of 100 leads. And that’s awful! 😑B2B lead scoring can make your entire business more efficient. It not only makes your marketing efforts more effective but also helps you align different departments in your organization. Here are a few reasons why lead scoring is important for you.
Lead scoring models help you identify the channels and marketing campaigns that generate potent and high-quality leads. Thus, you can customize your marketing campaigns accordingly and generate more qualified leads.
Your sales reps are no longer required to invest themselves in every lead. Lead scoring helps the sales team segment and prioritize leads based on their scores and desire to make a purchase. Also, your sales reps can follow up on the high potential leads more effectively.
You can collect a lot of lead info during the lead scoring process. This information can help your sales reps to tailor their pitch to genuinely interested prospects. Therefore, you can make better efforts to boost your conversion rates.
Not every lead is worth your time. With a lead scoring model in place, your sales reps can identify the leads who are a priority. They can follow up with these priority leads first. Showing up to the qualified leads at the right time can positively impact your revenue growth.
The marketing and sales teams are often at odds when it comes to lead generation. But a lead scoring system helps to build a clear pathway for lead hand-off to the sales team. A lead scoring model ensures that every lead passed on from the marketing to the sales team is sales qualified. Thus, it can strengthen the coordination between the two teams.
There are two types of lead scoring methods or approaches. Check out what they are and how are they different.
A predictive lead scoring tool or software automatically scores leads using algorithms based on your sales and marketing data. There are other predictive lead scoring software solutions that also use third-party or external data sources to score leads based on more information.
The predictive lead scoring approach is completely automated. It works based on the input data and the software design.
In rule-based lead scoring, you set up rules to score your leads. These rules can be based on your lead activity, available data, and the functionality of your lead scoring software. This lead scoring approach is pretty simple. When a lead triggers your set rule, the lead score will be updated. If you set rules based on lead activity, the score keeps changing according to their behaviors. Further, you can use the lead score to trigger workflows to set a minimum score limit to mark the lead as qualified ✅. For instance, creating a minimum score threshold of 60 will ensure that the leads are passed on to the sales team when they accumulate a score of 60.
Between the two lead scoring approaches, you can pick the one that best suits you. Predictive lead scoring is automatic while rule-based scoring is manual. If you want to set up your own rules to assign a lead score, the rule-based approach will offer you the flexibility to do so. On the flip side, if your priority is lead scoring based on enriched data, choose a predictive approach. Predictive lead scoring can pull data from various sources and assign scores based on that.
There is no one-size-fits-all lead scoring system. It is most likely that every organization has a different lead scoring system. Your lead scoring model must accommodate your business needs. It must be designed in a way that aligns with your business goals and targets. Here are a few examples of things you must consider when designing your lead scoring model.
Build your buyer personas – a representation of your ideal customer. Conduct research, go through the existing customer databases, observe and then create a profile that fits your vision of a perfect customer. The more the buyer personas, the better the understanding of your customers. As a result, your lead scores will be more precise and justified.
Decide the attributes you will assign scores to. That is, make a list of the attributes based on which you will score your leads. Examples:
Choose the data points that are relevant to you and that indicate sales readiness for your leads.
One of the most important things that you must consider when designing a lead scoring model is the minimum score threshold. You must determine what total lead score indicates sales readiness for you. This will need some analysis in the initial stage. You can start with no minimum value and request your sales team to follow up with leads equally regardless of the score. Once the test period is over, you can analyze sales follow-up and the lead score to determine a cut-off point. The leads that accumulate the cut-off point will be qualified for the next level. They will be considered a priority lead and followed up to close the sale.
Manual lead scoring may sound great but it isn’t. If you score leads without a marketing or sales automation tool, it can be a time-consuming and exhausting process. Moreover, it can lead to data inaccuracies and lead routing issues. So, getting a marketing automation tool that takes care of the lead scoring system entirely will be the best idea. All you have to do is enter your lead scoring criteria and the automation tool will assign scores automatically.
Assigning scores to lead is something you must consider before implementing a lead scoring system. For example, who will you assign points to and how much? If leads subscribe to your newsletter, they get 5 points but those who download whitepapers get 25 points. This is because the leads subscribing to newsletters may not turn into high-paying customers. But those downloading whitepapers are more likely to get converted. Your lead scores are based on data. Thus, you must collect as much data as possible. Here’s how you can gather data to build an effective lead scoring system.
You can choose your lead scoring model based on the data available to you. Here are a few lead scoring models that you may consider for your organization.
Also known as the firmographic model, this lead scoring model is great if you target a specific group of people like young adults or a particular age group. In this model, you are to ask demographic/ firmographic questions to your leads like job, industry, geographic location, etc. via web forms or surveys. Then, you can use the leads’ responses to see how well they fit into your target audience group. For example, if you sell your product to a specific geographic location, you can assign points to the leads who belong to the geographic location. Again, for those who do not belong to that specific geographic area, zip code, city, etc. you can deduct points.
The online behavior model considers how a lead interacts with your website. The main attributes to be considered in this model are page visits, content download, blog post visits, web form submission, etc. Using this model, you can score the leads based on their online interactions. For example, you might give higher scores to a lead who visits high-value pages like pricing pages or demo requests. Further, you might also give higher scores to a lead who has more page visits. Similarly, you can subtract points when a lead does not show interest in your product anymore. Like, if they stop visits or content download, you can reduce the lead score.
The email engagement model considers lead interaction with your emails. The attributes of this model include clicks, open rates, clickthrough rates of marketing emails, unsubscribes, etc. These attributes give you a better idea of the lead’s interest in your product or service. For example, you can assign a higher lead score to the people who open every lead nurturing or marketing email or who always click through the email links. Also, you may assign high scores to leads to clickthrough high-value emails like product demos. Based on these data, your sales team can identify the leads most engaged with the company emails.
With the lead scoring models and methods, it can be really confusing to figure out how to calculate the lead score. So, you need a simple way to calculate lead scores. Here’s something to get started if you aren’t prepared to implement a lead scoring model yet.
Lead-to-customer conversion rate is calculated by dividing the total number of new customers by the number of leads generated by your team. For example, if you have 50 new customers out of 350 generated leads, your lead-to-customer conversion rate is 50/350 = 14% approx.Now, use this conversion rate as the baseline for lead scoring.
Consider your high-quality converted customers and start building attributes based on your current customer’s behavior and demographics. Consider both implicit (based on the info you already have) and explicit data (factual lead data verified via call or email). Your attributes can range anywhere from customers who work in the tech space, who attended your webinars, downloaded eBooks, employ 100+ employees, etc. You can choose the attributes based on customer data or the ideal target audience chosen by your sales team. Creating attributes from data may take a bit of assessment to identify the exact customer characteristics that drive conversions.
Most marketers use a mix of demographic and behavioral attributes to determine lead scores. To get the score for each attribute, determine the number of qualified leads becoming customers based on their behavior or demographics. Here are two sample images of scoring demographic attributes and behavioral attributes.
lead scoring model
The more likely an attribute or action results in conversion, the higher the score assigned. You can analyze your marketing KPIs and website or create an attribution report to determine how these lead actions affect the sales process. For instance, X attends a webinar, and Y downloads some content from your website. Here, X may be worth more points than Y. Your sales team can offer insights into the activities that create a higher impact on conversion.
Calculate the score for each attribute and then compare the value to your conversion rate. If the score of certain attributes is higher than your baseline lead-to-conversion rate, that means, include those characteristics or attributes in your lead scoring formula.For instance, leads filling out your web form have a 25% close rate and your baseline conversion rate is 14%. You can give a score of 25 to anyone who fills out your web form. Similarly, you have to do the same with every attribute or action to ensure that the assigned values reflect your lead quality. Since this is a manual lead scoring process, you must constantly evaluate it from time to time.
Finally, when you decide to implement a lead scoring model in your organization, you’ll need the steps to implement the system properly.So, here’s your step-by-step guide. Save it for later! 🔖
Start with making a list of the minimum requirements for a lead to convert into a customer. Take reference from your ideal existing customers.
Gather data, a lot of data, from the marketing, sales, distribution, and customer success departments. If you already know the attributes of your perfect target audience or desired customer profile, your job’s more or less done. The main point of this step is to identify opportunities similar to your existing customers. Similar leads are more likely to convert into loyal customers down the line.
What are the characteristics that define your perfect or dream lead? Are there any unique attributes that indicate that the lead may end up being a high-paying customer? Dig deep and find out these answers.
You can use data intelligence tools to identify your ideal customer profile and to access supporting data like technographic or firmographic data about leads. For example, the lead’s organization, geographic area, industry, the software solutions they use, etc.
Take note of your current customer behaviors. What action did the customers take before signing the contract with you? Which web pages have they interacted with the most? Have they opened your marketing emails? Did they attend your webinar?In this step, you must mention as many activities that indicate the customer’s interest in buying your product or service.
Set up a scoring system based on the different types of lead scoring available. Though you are free to set any scale, generally, scores range from 0-100. Place a block on points on one side with the ‘must-have’ requirements and assign scores. Only leads who accumulate the minimum score can be qualified for the next level.If you want to set up different score templates tailor-made for your business needs, you’ll need a more sophisticated lead scoring model.
Tweak and refine the lead scores when necessary. Over time, your product offering and market growth might demand certain changes in your ‘perfect lead’ picture. So, review your lead score system after regular intervals. Check if there are any low-scoring leads who are now your customers. Or, if there are high-ranking leads that do not resonate well with your sales efforts.Accordingly, tweak your lead scoring model to utilize its maximum potential.
When you have leads pouring in, you cannot always tell which are the good ones. Sometimes it even takes too many emails and hours of conversation only to find out that your sales reps are wasting their time. While you do not want to miss a good lead, you do not want to invest your time and energy on leads that will never close. Lead scoring helps you to manage the lead stuff better. Here are a few benefits.
Are your leads sales-ready? Without proper identifiers, your sales reps will not know how prepared is the lead. They will call each and every lead on a first-come-first-serve basis, thereby wasting their time on leads who aren’t ready to convert yet. Lead scoring can help your sales reps identify the ‘hot leads’🔥. They can prioritize the leads based on scores and connect with them first. Thus, with lead scoring, you can identify leads that match your ideal customer profile and accordingly, prioritize sales activities.
Engagement and lead scoring can help marketers identify different engagement brackets. They can, thus, create customized offers to increase conversion likelihood. Lead scoring can also help marketers to identify the sources that get the most closures. Accordingly, they can allocate the marketing budget across these channels that generate high-quality leads. For example, a marketer identifies Instagram as a source where the engagement score has been high recently. Therefore, you can invest more money and time into Instagram to leverage the platform.
The lead scoring mechanism helps you identify the percentage of engaged leads. Hence, you can create similar strategies to boost engagement. Look into your existing lead scoring data to identify what type of ads or contests, and surveys, have driven higher engagement. Run a similar marketing campaign to nudge the disengaged leads and connect with them again.Lead scoring also helps to understand your customer's interests. By looking at the lead scores you can identify your popular products and services.
Lead scoring gives you an answer – is the lead ready to make a purchase? That is, you get to know the lead’s sales readiness. Therefore, your sales reps can provide leads with the information they want about your product. For example, if they are in the research phase, your sales reps can help them resolve their issue, highlighting how your product/service can be useful to them. Lead scoring helps you identify the leads who are towards the end of the funnel waiting to make a purchase and the ones that need further nurturing. Accordingly, your sales reps can prepare their pitch and provide leads with relevant content.
I know lead scoring sounds like a massive project to take on. And honestly, it is pretty huge. Implementing a lead scoring model can demand a lot of your time, energy, and other resources. But once you implement a lead scoring system, your organizational functioning will be far more effective and productive. In fact, research says that businesses experience a 77% increase in lead generation ROI using a lead scoring system. So, to make your implementation of a lead scoring model easier, you can take the help of an automation tool like RevenueHero. This sales acceleration platform takes care of your lead qualification and routing process, scheduling, and lead prioritization too. Thus, it won’t take long to implement a strong and fantastic lead scoring system. Want to know more? Explore the platform!
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