Targeting the leads during each stage of a sales funnel is critical to converting them into loyal customers. To make this happen for your business, you can work on different lead qualification strategies. Among these, lead scoring is the most reliable process to convert prospective customers into sales.
If you wonder what is lead scoring, this article can help you understand the key aspects of this process. So, let’s dive in!
A Simple Explanation for Lead Scoring
Lead scoring is a process that involves ranking various leads depending on different factors and attributes. Lead scoring also gives insight into the key data points for assessing the intention of a prospect to buy a product or service.
For this purpose, marketers take advantage of a predetermined scale, which helps identify valuable leads and increase conversion rates. If a lead meets specific criteria, it becomes a qualified lead. After that, the lead is diverted to the sales department.
Why Lead Scoring system is So Important?
Striking your prospective customer at the right time and with the most relevant message is critical for generating a sale. This is the area where lead scoring software can enhance the performance of your team and bring more business.
Lead scoring can help with implementing different sales and marketing strategies. This is so, as it helps to identify the most promising leads. Besides, it also makes it easy to decide whether to continue with a particular lead or not.
By following an effective lead scoring methodology, it is possible to promote a longer sales cycle. Apart from this, when done right, effective lead scoring system can save precious time and lower lead generation costs. It also creates a better alignment between sales and marketing departments.
Popular Lead Scoring Models
Lead scoring is based on different types of data collected about prospective customers. Since the data of a customer depends on its demography and interests, it is imperative to find a perfect predictive lead scoring model.
Discussed below are the most prominent lead scoring models to work with:
- Engagement Model
- Purchase Intent Model
- Demographic Model
- Negative Scoring Attributes
Lead scoring model: Engagement
This model gives you an indication of whether a lead has shown some interest in your product or service. As a result, you can assign different scores depending on the interest or engagement of the lead.
Similarly, the interaction of the leads on your social media channel also indicates the level of interest. For instance, you can score leads by taking into account interactions like comments, shares, and likes.
Lead scoring model: Purchase Intent
With the purchase intent model, it is possible to gauge the probability of a lead converting into a sale. For this purpose, you need to take a look into the web activity of a prospect. You can easily collect intent data via different digital sources.
Lead scoring model: Demographic and firmographic data
The demographic lead scoring model relies on the data collected through the demographic information of a prospect. This can help you curate some of the most relevant information. By implementing this model correctly, it is possible to find leads that are more likely to become your customers.
Lead scoring model: Negative Scoring Attributes
There are certain lead interactions that show little or no interest in buying your product or service. Through negative lead scoring, a marketing team can adjust the ranks of the least interested leads and remove them from the process.
Here are some of the negative scoring attributes:
- Someone visiting the career page
- Spam submission
- A prospect who unsubscribed
- An internal team member
- A competitor signing up for the newsletter
How to Score Leads: Step-by-step guide for marketing and sales teams
Calculating the lead score might tend to be a tough task for some. This is so, as the process of scoring leads could be a confusing one. The most challenging part is the selection of the most appropriate models and attributes.
If you want things to sail smoothly, just take a look at the lead scoring steps provided below:
Step 1: Make Sure to Calculate the Conversion Rate
For analysis purpose and improve your lead scoring model, you first need to calculate the conversion rate for all leads. The conversion of a lead-to-customer rate is equal to the total number of new customers divided by the number of generated leads.
For instance, if you have acquired 100 customers out of 700 leads, your conversion rate is 14%.
Step 2: Use High-Quality Converted Customers to Create Your Attributes
By utilizing the explicit and implicit data sets (Top 10% Revenue-Generating Clients for example) it is a lot easier to develop attributes. However, to make your data more productive, make sure to develop attributes by analyzing the demography and behavior of your current customers. Besides, you also need to optimize the attribute over time.
For instance sales and marketing teams, take the customer data and analytics to select the best targeted audience. In some cases, a sales team can also help with finding the most relevant target audience. Although using data is critical to make attributes, it is also necessary to test some of the data to identify the exact characteristics of the leads.
Step 3: Define Each Scored Attribute
Relying on well-designed lead scoring criteria makes it easy to analyze and prioritize potential leads. These criteria are usually based on factors like lead’s behavior, demographic data, engagement level, etc. Once you have done some initial research, it won’t take long to get the answers to the following questions:
- Who are your leads?
- How they behave on your site
- What turned the leads into sales?
You need to find the answers to these questions and organize the information thus obtained to define your lead scoring rules and criteria. Lead scoring criteria usually include the following attributes:
- Company size/Revenue
- Job Title / Job Seniority
- Website Visits
- Industry
- Downloads and registrations
- Email opens and clicks
- Free trial usage
Here are the three most widely used types of lead scoring criteria:
Behavioral Criteria: To create such criteria, you need to analyze the actions performed by a lead on your website. This could help gauge the level of engagement exhibited by such a lead.
Profile Criteria: Setting these rules allows for differentiating a casual visitor from a lead. With sufficient profile information, you can find the most promising prospect.
Negative Criteria: This field includes behavior or characteristics of a lead that are least desirable or not even relevant.
Sometimes, you'll need to label raw data to derive scores from these labels rather than the raw data itself. For instance, scoring a job title can be challenging due to the variety of formats that exist. However, if you generate a job seniority level from the job title using an AI API like the GPT model, scoring based on this criteria becomes much easier.
For example, a lead attending a webinar could be of more worth than a lead that only downloads some content from your site. The sales team can also offer insight into the fact that what attribute can have a higher impact and could result in more leads, improving the conversion rate.
Step 4: Assign Points by Comparing the Values
After calculating the score for each action or attribute, the next step is to compare the value depending on the actual conversion rates. If some of the attributes offer higher conversion rates than the baseline set by you, don’t forget to include them in your lead scoring formula.
For example, if the close rate of leads filling out the website form is 25% and your conversion rate is 1%, just award 25 points to such leads. You need to complete this pattern for almost every attribute to ensure that their point values reflect the true lead quality.
Tip: Since it’s a manual process, you need to monitor and analyze your lead scoring formula after some time.
Step 5: Define a Threshold Score for Sale-Ready Leads
This step requires you to define a threshold score for sale-ready leads. When implementing the lead scoring, it is likely that you might not find leads with maximum or desirable scores. So, you need to establish a threshold score for diverting the leads to sales reps.
The threshold doesn’t need to be perfect at first, as you can make the required adjustments to it. You can first start with a high threshold score if you have a lot of leads in the pipeline or a low threshold score if your demand generation team don't generate enough leads for now.
Step 6: Create the Lead Routing Strategy
After setting up the scoring criteria, it’s time to perfect the lead routing strategy. Lead routing involves distributing the leads to the most appropriate sales reps. You need to ensure that the qualified leads and high-scoring leads are assigned the most experienced sales rep.
Even if a lead scores low, you can send it to the marketing team for further interaction and nurturing. Furthermore, you can also segment your leads depending on factors like company size, location, referral source, etc.
Lead scoring won’t do any good if you don’t know what to do with the generated leads. Therefore, make sure to create an effective lead routing strategy for better conversions.
Step 7: Automate the Lead Scoring Process with the Right Tools
Scoring leads manually is a time-consuming and less efficient method. It could be helpful only when you have a small team and there are only a handful of leads entering the funnel. On the contrary, if you expect a consistent flow of leads, it’s time to rely on an efficient lead-scoring tool.
Collecting data and performing the lead scoring procedure is a breeze with the right tool. For Instance, you can take advantage of a visitor-tracking tool to get information about the lead’s behavior. So, automating the lead scoring process can make a huge difference.
What are the Best Lead Scoring Practices
Below are some of the most prominent lead scoring practices:
- Define sales qualified lead criteria
- Evaluate and adjust scores
- Assign points to every action and attribute
- Consider the conversion process
Make Sure to Define the Criteria for Sales Qualified Lead (SQL)
To start with, you have to find the factors that contribute to a better lead conversion. You can also need to set a criteria for disqualifying leads. When it comes to lead scoring in B2B, it is essential to prioritize the company’s budget and size. On the other hand, local companies should pay attention to geographical data.
Adjust and Evaluate Lead Scores
It won’t be a good approach to set and forget the processes associated with lead scoring. So, try to adjust and evaluate the lead score over time. This is so, as the customer’s journey from lead to buyer could change after some time. To generate leads constantly, it is necessary to adjust your score models and attributes.
Every Action and Attribute must be Assigned with Points
It is also essential to assign higher points to those attributes that are closer to conversion. For example, visiting the home page or signing up for a newsletter might not be that important. On the other hand, more attention should be given to leads, which are interested in contacting the sales team.
Keep in Mind the Conversion Process
It is easy to conclude how close a lead is to conversion. For this purpose, you need to analyze the behavior of such a lead. For instance, a Sales Qualified Lead (SQL) normally subscribes to a newsletter prior to joining a sales demo.
Final Thoughts
Lead scoring proves to be an effective way to assess the qualifying leads. Through this process, you can share the required data and analytics with your own marketing teams and sales team.
For this purpose, you can take advantage of different criteria including behavioral activity, engagement, and demography. Buyer intent data and purchase intent data are some of the key elements that can improve the performance of a lead scoring model.
With the most appropriate model, it takes less effort and time to align your own marketing efforts and sales team to target the best leads and improve conversion rate. Having said that, make sure to convey the right message at the right time. By doing so, you can easily boost your bottom line and make long-term customers.
