Just as the score of a sports game determines which team is the best competitor, lead scoring allows companies to determine which sales lead is the strongest, or the most ready for sales. And, just as the score of a sports game tells a story of practice, teamwork, coaching, challenges, and failure, the score of a lead reveals a complex narrative of a company’s behavioral patterns, demographic information, and sales-readiness.
What Exactly is Lead Scoring?After inbound marketing helps your business attract large volumes of leads, the challenge become separating the high quality leads from those that are just in the initial stage of research. This is where lead management, and specifically lead scoring, comes into play. Essentially, lead scoring is the process of enumerating a lead’s level of interest and sales readiness, or attaching a value based on the lead’s quality. While these leads can be scored in a variety of ways (such as with numbers, letters, or words), what is important is that the score takes into account demographic attributes, behavioral patterns, budget, need, and timeline considerations.The purpose of lead scoring is three-fold:
- To maximize the efficiency of your sales and marketing teams by easily identifying and working with only the leads that are sales-ready,
- To build leads for the future by identifying those who are not yet ready to buy and nurturing them, and
- To create an alignment between the marketing and sales departments of your company.
The Importance of Lead ScoringPut simply: all leads are not created equal. Throughout the buying process, different organizations are at different stages of sales-readiness. It is essential for your business’ marketing and sales divisions to know where each company stands in order to increase productivity and, in turn, revenue. Companies that are close to buying, for instance, should be put in touch with a salesperson, whereas more hesitant prospects would benefit from further nurturing by the marketing division.Oftentimes, the marketing department will receive a list of thousands of leads. When searching through all the potential prospects, it is important for a business to be able to decide efficiently and accurately which lead is most important to pursue. In business terms, a high lead score will make a prospect MQL (or SQL; for the purpose of this post, we’ll use them interchangeably), which stands for a marketing/ sales qualified lead. When a lead is SQL, that lead is assigned a salesperson. The process of lead scoring ensures that a salesperson does not waste valuable time pursuing prospects that will not convert into lucrative opportunities.
Behind the Number: How a Lead is ScoredCompanies must consider two different types of information when approaching lead scoring: explicit and implicit data. By definition, explicit scoring is based on data the prospect gives you directly, such as his or her contact information. Implicit data, however, is based on information that your company observes or infers about the prospect, such as his or her online behavior. By fusing together these two scoring categories, companies are able to gain a holistic view of the prospect’s sales-readiness and their future value to the business.Implicit and explicit scoring can be further broken down into two distinctive categories: Behavior (implicit) and Profile (explicit). Prospects’ behaviors are interpreted as actions that express their interest, such as opening an email, visiting a website, and downloading a white paper. Their profile, however, is their specific role or position within a company. For example, your business might be more interested in the profile of a Vice President than a student, who could very well just be completing a research project. More specifically:
- Profile Scoring, also known as demographic scoring, encompasses lead information like job title, industry, business size, and annual revenue. Higher scores are awarded to businesses or persons that are within your business’s target audience.
- Behavior Scoringare activities such as responding to offers, opening emails, or clicking on web pages. The specific web page makes a difference; for example, visiting a career page shows a lesser interest than visiting a product-pricing page. Both visits, however, should be incorporated into a score, although weighted differently.
Also thrown into this complex calculation is an acronym called BANT, which includes the following considerations:
- Budget: Is your product within the target’s price range?
- Authority: This goes hand-in-hand with the Profile of your prospect (explicit scoring). Is your prospect a decision-maker? Does he or she have the power to allocate funds?
- Need: Does the target need your solution? What is driving the need? Answering the latter question will allow your company to target other similar prospects.
- Timeline: When will the prospect be ready to buy? Is this a one-time investment, or will it be recurring?
The Lead Scoring ScaleThere is no standard scale for lead scoring; the method of enumeration depends on the business or company. Teleark, for example, uses a scale from 0-10 (based on both profile and behavior) in order to determine the quality of a lead. A lower number correlates to a prospect that is less likely to pursue a sale, while a higher number means that a sale is extremely likely. Other companies might quantify their leads on a scale of 0-100, while others may even assign letter grades (and who wants a lead with an “F?”) Oftentimes, these numbers or letters are accompanied by words like “Cold” (0-2 on a 10 point scale), “cool” (2-6), “warm” (7-8), and “hot” (9-10). The exact number in and of itself is relative; what’s important is whether the number is generally high (warm to hot) or low (cool to cold).Action is determined based on these qualifiers. While the range varies by company, a sample business may, for instance, choose to send leads between 0-4 (or 0-40) to marketing in order to nurture potential prospects, leads within 5-6 to telemarketing for qualification, and then leads 7 and above to salespeople. Again, this varies by company and by the sheer quantity of qualified leads available.It is important to remember that, because a lead’s activity can change from day to day, a lead’s individual score can also fluctuate across time.
Lead Scoring = Lead Quality
Lead scoring allows a business to identify the highest quality lead possible by taking into account both behavior and demographics. The quality of a lead, therefore, directly corresponds to how high or low the lead score is. According to Stu Schmidt, the Vice President of Solution Sales at Cisco Webex, a 10% improvement in lead quality can have as much as a 40% improvements in sales productivity. Determining lead quality is absolutely essential, and it is nearly impossible without quantifiable lead scoring.
Approaching Lead Scoring: Basic and Advanced TechniquesBefore a company begins implementing lead scoring, a few basic decisions must be made. First, marketing and sales should be aligned in what their ideal “target audience” is and in what constitutes a “sales-ready lead.” Then, this sales-readiness should be assigned a score threshold (such as 8+), so that the sales department will know when a lead is hot. This score should be within the chosen lead scoring methodology, such as using points (0-10 or 0-100), letter grades, or terms such as “cool” and “warm.”The next, and perhaps easiest, step an individual company should take in lead scoring is assessing the profile of each prospect. Numbers should be assigned based on this profile; for example, a Vice President might be assigned two points, a Director might be assigned one point, and a student might be assigned negative points. Location, as well as company budget, should also be taken into consideration.Scoring the behavior itself can be inundated with complexities. Straightforward places to start are by considering the number of events the prospect attended, the quantity of web pages visited, the amount of time spent on the web pages, number of downloads, and overall company engagement. Advanced techniques to begin approach the scoring can include:
1) assigning lead scores according to implicit data, such as the online clicking behavior of both known and unknown website traffic,
2) generating automated marketing campaigns, and then incorporating lead score triggers within them, and 3) setting up sales team alerts when lead score thresholds are met.
Common Lead Scoring ErrorsThe complex methodology behind lead scoring can sometimes lead to inaccurate scores. Three common lead scoring pitfalls to look out for are:
- Inaccurate explicit information: When prospects are required to self-enter information, such as an email address or phone number, there is the risk that the data will be inaccurate. According to MarketingSherpa, phone numbers are most likely to be unreliable, as prospects may not want to be contacted before they are sales-ready.
- BANT inaccuracies: Similarly to above, a prospect may inaccurately fill out BANT information because they are too early in the buying process to want to be contacted or are not the decision-makers capable of making buying decisions.
- Data misconceptions: It is generalized in lead scoring methodologies that higher positions should receive higher scores, and bigger companies should merit higher scores than smaller companies. However, this may not always be the case. For example, the CEO is rarely the person looking into departmental-level products and services; instead, the director or VP is likely to be the decision-maker and should therefore have higher points. Similarly, one should not assume that large companies deserve the best scores before analyzing the value potential from other mid-market prospects.
Teleark’s Lead Scoring ApproachThe majority of the time, it is more cost-effective and time-efficient for a business to hire a lead generation company to develop an individualized lead scoring methodology. Teleark’s approach to lead scoring is two-fold, with input from both the marketing and the sales side. With the aid of marketing automation, Teleark is able to use email marketing to effectively reach a broad audience. This audience is then assigned a score based on their actions with the email campaign, such as clicking on links or downloading an attachment. From a sales perspective, Teleark then follows up with the warmest (7 and above) leads through personalized emails or phone calls. They then also attempt to set appointments for follow-up. By using this two-sided approach, Teleark is able to improve its chances of setting an appointment by only contacting the best leads after pre-established behavioral patterns. Software is then used to analyze and sort through the results.Teleark’s approach is distinctive from other lead generation companies. While other services require the client to set up the lead scoring system and to implement the marketing automation system themselves, Teleark packages these services together, making them responsible for both the lead scoring functionality and the follow-up email or call on behalf of the customer.
What Happens After the Leads are Scored?Once the leads have been scored, they are delivered to the salespeople or placed into marketing’s nurture campaign. Now what? It is essential for companies to continuously review their lead scoring techniques in order to continue generating quality leads. Companies should continue to:
- Review scores of won and lost opportunities. Why the end result? Should score thresholds be adjusted?
- In particular, review leads with “warm” or “hot” scores that did not convert into sales opportunities. Could scoring be improved in any way so that these prospects did not appear to be a top priority for sales?
- Review scores based on demographic segments, such as title and company, in order to see if score adjustments based on profile or business are needed.
- Look over online behaviors to determine if the best leads are being properly reflected based on a consumer’s behavior, or lack thereof.
- Search for new ways to track prospects’ behaviors. For example, an emerging trend is using social media in lead scoring. If a prospect tweets that he or she is looking for opinions on your product, their lead score should increase as they are indicating that they are closer to sales-readiness. A social media monitoring tool should be implemented.
Lead scoring is a complex, ongoing process. But, when done correctly, lead scoring can drastically increase a company’s sales and revenues. Trusting lead generation experts, such as Teleark, with your lead scoring will ensure that no high-quality lead gets left behind.