A lot of things can go wrong on the journey from prospect to qualified lead.
Here’s just a few of them that marketers and sales pros run into.
The lead isn’t:
- ready to buy on a timeline that makes sense for your enterprise.
- the actual decision maker with “dotted line” buying authority.
- interested in your product or service in any way whatsoever.
- fully qualified according to your own internal sales criteria.
- fully qualified based on opinion of the sales representative.
With all of that, it’s almost a wonder businesses find qualified leads at all.
We’ve discussed how you can use BANT lead qualification to accelerate the process of turning a marketing qualified lead into a sales qualified lead. Using the right qualification framework can save a lot of time, money, and aggravation in the long run.
To fully qualify your leads, however, you need to go one step further.
You need to get into leads’ heads and predict the likely sales outcomes.
In short, you need lead scoring.
What Is Lead Scoring?
Lead scoring uses the whole history of all your past sales to evaluate how likely it is that a lead will ultimately become a customer.
Based on criteria derived from the activities of previous customers, your lead scoring system assigns a quantified value to each lead. This value increases as the lead takes actions consistent with a future purchase.
It also provides you with a framework to understand lead behavior and take proactive action. For example, it’s easier to determine what stage of the buyer journey a lead has reached and when you should follow up when you have structured historical data to rely on.
Why Is Lead Scoring Important?
Scoring your leads by their behavior and interests helps you determine which ones are the most qualified to pursue in your efforts to increase your revenue and the power behind your sales and marketing teams.
Leads are reading your content, downloading your offers, and displaying their interest in your business in multiple ways, but certain behaviors or more indicative of being sale-ready than others.
The data you get from lead scoring will help you differentiate between leads that are qualified to be labeled as prospects and unqualified leads that are just passing through. It saves your team a ton in time and resources when you can easily spot the difference.
Lead Scoring Factors to Analyze
As with so many things in scientific marketing, scoring your leads relies on choosing the right data. You don’t want to get bogged down with vanity metrics, but it’s also not a matter of “the more, the merrier.” There are specific data points that create clearer scoring.
They break down into two categories:
- Explicit data mainly centers on enterprise buying factors; some is available publicly.
- Implicit data consists of the signals a lead sends when accessing your web content.
Let’s take a closer look at how these work out.
Explicit Factors in Lead Scoring
1. Job Title
Even in today’s world of complex B2B consensus sales, you can usually determine whether a lead is viable based on the good old company org chart.
Usually, job titles will make it clear that the lead is both in the right department and at a suitable level for strategic procurement decisions.
Let’s face it. You’re not going to get very far trying to sell a product or service to the wrong industry.
When you serve multiple different verticals, however, those that are more desirable (in terms of cycle time or deal size) may result in a higher lead score than the ones that are secondary.
3. Company Size
Most sophisticated business solutions only really reach peak value when an enterprise is at a certain scale.
Some are targeted at SMBs (small- and medium-sized businesses) and may be less useful to larger companies. Whatever the case, this is definitely something you want to keep track of.
4. Annual Revenue
Annual revenue is a huge factor in setting the “ceiling” for what a reasonable strategic buy looks like from the lead’s perspective.
Just like you don’t want B2C customers taking out a second mortgage to afford you, find the comfortable middle ground for your B2B leads.
5. Number of Employees
Most solutions fit in smoothly with a certain headcount.
For example, if you’re trying to sell marketing automation software, it makes sense to pitch it to a “team of one.” If you’re in an area like compliance or data security, your value increases with headcount.
Implicit Factors in Lead Scoring
6. Page Views
Page views are a vital early metric in judging interest. When someone is intrigued by what you have to offer, they’ll usually view more pages and have longer, deeper sessions.
Of course, your site should also be set up to drive conversions with lead capture and AI chat bots.
Return traffic that delivers multiple visits from a single user is a huge sign you are on the right track with someone.
It means they are looking forward to your updates or they’re getting more information – for example, from a colleague – then returning to evaluate your claims.
8. Type of Content
The content types that someone views is one of the best indicators of what buyer journey stage they’re in and what their next move might be.
As visitors progress toward bottom of the funnel content like whitepapers and case studies, their lead score should obviously go up.
The sooner you get leads to take action, the better. Recency helps you understand just how motivated someone might be.
Ideally, they’ll move smoothly from one step to the next and jump on that purchase! If they fall idle, then their lead score should go down.
Most lead scores are based on points ranging from zero to 100, added together across these models that each represent a particular characteristic of your customer.
How to Calculate a Lead Score
There are a variety of ways to go about lead scoring, but the most simple method is manually do it yourself. Here's the four basic steps of doing so:
1. Calculate Your Lead-to-Customer Conversion Rate.
Your conversion rate is equal to the number of new customers you earn divided by the number of leads you generate. This rate should be used as your benchmark.
2. Select Which Attributes Will Indicate Higher Quality Leads.
These attributes could be anything a customer does, from downloading a tipsheet to working in a B2B company.
It's kind of up to the sales rep to decide which attributes qualify for a certain amount of points, but it's important that they're basing their judgements off of the right data.
3. Calculate the Close Rates of the Selected Attributes.
When you calculate the close rate of every action, you can build a proper strategy or response to those actions.
Determine how many leads actually convert to customers based on certain behaviors and how close they are to your ideal customer. You'll be able to reference those close rates when scoring other leads who display similar activity.
4. Assign Points Based on Close Rates of Attributes with Your Overall Close Rate.
As you examine the behavioral attributes of a lead, look at the close rates for each attribute respectfully. Identify which ones are significantly higher than your overall close rates or benchmark.
From there, choose which attributes will be assigned points and how many points they'll warrant. It's important to be consistent in your scoring so that all leads are sent through a standardized qualification process.
Lead Scoring Best Practices
Lead scoring is a pretty flexible practice that you can adjust to your team's standards and who your customers are. There are some best practices to keep in mind though in an effort to keep yourself organized and productive.
Keep Score Ranges Small.
No one attribute should be worth an excessive amount of points. A window of one to 10 may be too broad and can lead to a misinterpretation of a lead's qualification.
Work in smaller scales, like one to five, when scoring a lead. That way, interpreting lower, middle, and upper scores is easier.
Generalize Scoring Attributes.
Regardless of which smaller actions are taken in what order, your lead should be able to reach certain milestones in their scoring.
If you learn that the conversion rate for someone who has opened 15 emails is the same as someone who has downloaded a free demo, then prioritize them equally.
Leads should be able to accumulate points based on iterations of the same behaviors, which will lead to better conversations between them and your sales reps.
Add All the Scores Together for a Maximum Score.
As your leads accumulate different scores for different attributes, adding the points together for a total score will help your sales reps organize and prioritize their contacts.
There isn't a specific formula for a lead to qualify as a prospect. The criteria should be mixed, with leads being able to accumulate points through actions that fit their needs and process.
Don't look for the same patterns in every contact when qualifying and scoring a lead. Simply look at what their actions are adding up to, which in turn allows your team to stay agile and accurate.
Lead Scoring Example
Let's run through a quick, easy scenario:
Your company's preferred customers are B2B companies. You just earned a new contact through a landing page form for an ebook.
The new lead is a manager of a B2B company. Their title and their industry earn them some points:
Role: +10 points
Industry: +5 points
They downloaded an ebook on leadership skills. Not necessarily one of your high-traffic offers, but they still expressed interest.
Ebook download: +5 points
They also opened one of your sales reps' emails and replied with a friendly introduction!
Email open: +10 points
It's safe to say that this new visitor is interested in your business. It's a good idea to keep an eye on their behaviors and continue engaging with them.
Total: 30 points
Scoring Your Leads Can Double Your Qualification Conversion Rate
Just a few years back, the majority of enterprises were building up their own mechanisms for lead scoring by chaining together different data points from various analytics systems.
While you can still do it this way – and it may be a great learning experience for some marketers – it’s no longer necessary to do everything by hand. You can save time and be accurate.
A great customer relationship management (CRM) system will synthesize your lead scores for you using the data about your prospects it correlates from other systems and collects itself.
Lead scoring makes life easier for sales and marketing alike. Implement it today and zoom in on those hungry leads!