When it comes to acquiring new customers, most businesses focus all their time, money, and effort on one of two processes: acquiring leads or nurturing leads.
Tons of resources are poured into lead generation activities (e.g., marketing, advertising, blogging, etc.) or lead nurturing activities (e.g., sales calls, email follow up sequences, etc.). In other words, most businesses either focus on what happens before someone becomes a lead or what happens after they become a lead, but what about the process in the middle?
Many marketers and even businesses don’t even know that lead scoring exists, which means that the process of selecting which leads to pursue, and which to ignore, often goes overlooked entirely.
For businesses that get very few leads, this is fine. However, businesses getting hundreds or even thousands of leads per day need to have a process in place that allows the sales team to prioritize which leads to pursue.
It’s important to realize that not all leads are created equal. Some leads are cold and at the top of the funnel, while other leads are at the bottom of the funnel and are literally ready to buy right when they’re submitted. Still other leads won’t even be in the funnel at all, like those sent in by researchers or bloggers just poking around, and would be a complete waste of time to chase down. This is why it’s so important to have a lead scoring system to handle the sales process.
Having a system that assigns numerical values to leads in such a way that will allow a sales representative to go after high-quality leads and disregard low-quality leads will result in better time efficiency and more revenue in the long run. That’s where lead scoring comes in, and that’s what we’ll explain to do in this post.
Lead scoring is the process of assigning values to your leads so that you can label those that are most likely to convert and those that are not. This way, you’re able to prioritize which leads your sales team will contact next.
Without a lead scoring system, leads would be chosen one by one which is fundamentally flawed because many of those leads will end up being a dead end and a huge waste of time.
Having a lead scoring system is an extremely valuable tool for a business since it helps improve the efficiency of the company’s sales team, generates more revenue, and helps prevent the sales staff from experiencing burnout.
Better time efficiency means no time is wasted on bad leads, and no time wasted on bad leads means higher conversion rates and more revenue for the company.
Additionally, since the sales team can see what characteristics and attributes make a high-quality lead, they can relay this information to the marketing team, which should help improve the overall marketing strategy too. With improved marketing, the leads coming into the sales funnel will be even more qualified than they were before, making the marketing and sales process easier, faster and more profitable for the company.
To give a prospect a lead score, you must first come up with a point system with rules. This point system is at the heart of lead scoring and what ultimately allows you to know which prospects are hot and which are cold.
The first step in creating a point system is looking at past and present customers. Look for commonalities between customers—the attributes that they all share or the common actions that these customers took just before becoming a customer (e.g., a download, a click, a form submit, etc.).
The next step would be to assign a numeric value to each of the attributes you have chosen to be good indicators of potential customers. There are different ways to assign points to attributes, but to keep it simple, one way would be to add a higher amount of points to crucial attributes that all customers share and fewer points to those attributes that occur less frequently in customers.
There are three main ways most systems and organizations score leads. The first one is demographic scoring which is when you score a lead based on the data you have collected on the lead submitter. For example, people who live in a certain location or those that are a certain age would receive a higher score. This way, you can ensure that those who fit your target demographic will get prioritized.
The next type is behavioral scoring. With behavioral scoring, you score a lead based off of how they interacted with your website or business. Using behavioral scoring, you might award more points to people who have visited multiple pages of the site, people who have visited the pricing page, people who have downloaded a brochure, etc.
Lastly, there’s negative scoring which is where you deduct points based on attributes that would automatically disqualify someone from being a good lead. For example, you might want to deduct points from leads who have visited the employment page, or who did not include either a phone number or email address on the lead form they submit.
Having a system that utilizes these 3 different types of scoring will allow you to qualify and rank your leads more accurately.
A lead score model needs a set of rules that tell you when to add points to people with certain demographic and behavioral attributes. But how do you know which attributes to award points to?
First, try asking your sales team. Since your sales team is constantly in the trenches, actually interacting with your leads before they become customers, they usually have valuable insight as to what type of attributes indicate that someone will become a customer.
Next, you could ask your advertising department. It’s no secret that advertisers must deliver the right message to the right people, otherwise, their advertising efforts will have been for nothing. To do this, advertisers have a predetermined set of attributes that they use when they’re configuring their targeting settings just before launching a digital ad campaign. Viewing your advertising department’s targeting settings just might give you the insights you need to discover those important attributes that you can assign points to.
You also might be able to find important attributes from your marketing department. Like the advertising department, the marketing department also has a target market—a set of attributes—which they hone in on when they deliver their creatives, content, and collateral. Looking at the marketing department’s targeted demographics can reveal hidden attributes that might not have been obvious at first.
Additionally, you could ask the customers themselves since their inner thought processes are something that no marketer could replicate. Although surveying your customers is more time consuming, it might be worth asking them why they think they became customers or when in the sales cycle they knew they would become customers. You could do this by interviewing your customers, sending them a questionnaire, or by sending them a poll.
Lastly, you could also check your analytics, which is ripe with valuable insights on your customer’s demographics, interests, and behavior (all three types of lead scoring data!). Running an attribution report can uncover which marketing activities convert leads into customers. You could also check which pages of the site leads have viewed before turning into customers or which pages visitors viewed before turning into leads and use this info to assign a higher score to leads that have viewed those pages.
There are a few different ways of lead scoring, however, some methods take longer and are less effective than others.
The first way of doing this is manually, although almost no one ever does it this way anymore as it becomes too time-consuming.
Another method is using a data mining technique called logistic regression. For this method, you must build a formula (typically in excel) that takes into account all of the customer’s attributes and analyzes how they interact with one another, which in the end, will determine the probability that a lead will convert into a customer.
And finally, there are some automated approaches that do all of the heavy lifting for you. For example, some email autoresponders have a lead scoring system already built into them, with a few examples being Active Campaign, Get Response, and Drip. But even that isn’t as effective as another automated lead scoring method called Predictive Lead Scoring.
In an ideal world, your lead scoring system wouldn’t be static, but instead should be a living, breathing thing that changes as the market and your customers change. The criteria and attributes that make a good, high-quality lead might not even be the same from month to month—this is especially true for businesses that are heavily influenced by seasonality.
This is why it’s recommended that you constantly need to be making tweaks to your scoring system so that it stays as accurate as possible. But this can quickly become too time-consuming, stealing the time you need to dedicate towards other elements of running your business. How can you automate the lead scoring system tweaking process and essentially “set it and forget it”? The answer is predictive lead scoring.
Predictive scoring is an AI-based scoring system that uses machine learning to look at thousands of data points to see which attributes indicate hot leads. The scoring algorithm is constantly evolving, automatically making tweaks, updating itself, and sorting your leads to ensure that those most likely to convert remain at the top of your sales funnel.
Admittedly, predictive lead scoring isn’t the right tool for every business. Because the sorting algorithm needs a large number of data points for it to work, predictive lead scoring is best suited for Businesses that have thousands of customers. If you’d like to try out predictive lead scoring, some popular lead scoring tools are MadKudu, Infer, Mintigo, and 6Sense.
No matter what lead score software or method you do end up choosing to use, the important thing is that you try something other than treating every single lead as being equal, as that’s an incredibly inefficient way to handle sales.
Lead scoring is incredibly powerful and the truth of the matter is that most lead-based businesses could benefit from implementing a lead scoring system of some sort, even if it’s incredibly simplistic and done entirely manually.
If you’re looking for ways to increase lead conversion rates, improve sales rep productivity, save time and money, and improve profits, then you need to look into lead scoring!
Darden Faulkner is a freelance writer and product reviewer living and working in Irvine, CA. He enjoys long walks on the beach, learning everything he can about Google products, and has just discovered Twitter! Follow him over on Twitter for the latest life updates