It is not easy discovering purchase-ready customers; however, lead-scoring can help you in this regard. It is important to remember that only 4% (approximately) of the visitors to your website may be ready to purchase. Therefore, if you invest one dollar per visitor for conversion, then only 4% of this investment is worthwhile leaving you with a waste of 96 cents. With the help of lead scoring, you can find out which leads need to be ignored and which ones to pursue.
This definitive guide to lead scoring informs you regarding the basics of scoring leads alongside helping you to create a functional lead scoring model. And you can use this model to find purchase-ready customers for your business.
What is Lead Scoring?
Lead Scoring is the method of assigning values to every lead, which is generated for your business.
In other words,
Lead scoring is a methodology used to rank prospects against a scale that represents the perceived value each lead represents to the organization. The resulting score is used to determine which leads a receiving function will engage, in order of priority.
This value is often assigned as numerical points. You can use numerous attributes to score the leads, such as
- Professional information regarding visitors
- How visitors have engaged with your website
- Brands across the internet
The sales and marketing team may benefit from the lead scoring process in the following manner.
- They can prioritize the leads
- Appropriately respond to these leads
- Increase the lead conversion rate (converting leads into customers)
Every business may have a unique model for the allocation of points to score the leads. However, the data from the past leads are commonly used in order to design the value system.
- At first, search for the contacts that became customers and learn what they have in common.
- Find out the attributes of the contacts that did not turn into customers.
- After looking at the data from both sides, you can identify the attributes that need to be weighted more based upon how likely they are to specify if someone is the right match for your services or products.
Importance of Lead Scoring
Marketing teams may use the ‘lead scoring’ method to rank their leads with accuracy based upon various data points. Your marketing team can focus on the leads with the most likely ROI (leads that are more likely to make a purchase) based upon the lead scoring. They can target the best leads and can direct the lead nurturing and marketing efforts towards them.
We used to think it was about increasing lead volumes to give salespeople more at-bats, but now it’s about lead scoring and prioritizing. — Denice Hasty, CMO, Comcast Business
Lead Scoring Models
Lead scoring models ensure that the values assigned to every lead represent their actual compatibility with your product. Many lead scores are based upon a point-range of 0 to 100. However, every lead-scoring model that you develop has to support a specific attribute of the core customer. You can develop six types of lead-scoring models based upon the type of data collected from the people who showed interest in your products or services.
You can use the forms on your website’s landing page to ask the leads demographic questions and may use the answers to find out how well the leads fit in with the target audience. You may use this information to deduct points for the people who do not fall into the category of your consumers. For example,
You are selling to the people of a particular geographic location. In this scenario, you can assign a negative score to any lead that falls outside the proper location (city/state/country/zip-code, etc.)
You can keep some of the form fields optional, such as phone number, and may award additional points to the leads providing that optional information.
If you run a B2B organization and you ask yourself whether you are interested in selling to a particular industry or to an organization of a particular size and type. You may even ask yourself whether you are more interested in B2B or B2C organizations. You may use these queries on the landing page forms. It enables you to assign points to the leads that fit within the category of your target audience and may deduct points from other leads.
Online Behavior of Leads
You can learn a lot about how interested the leads are in purchasing from your website if you analyze how they interact with your website. You may collect the following information after analyzing the behaviour of the leads who became your customers
- Which offers and how many offers did they download?
- Which pages and how many webpages did they visit before becoming a customer?
It is equally important to take into account the type and number of the forms and webpages when assigning scores to the leads. You may award higher scores to the following leads.
- Leads that filled out high-value forms (demo request)
- Leads that visited high-value pages (pricing pages)
- Leads that visited a higher number of webpages in comparison to others
It is equally important to consider the leads whose behaviour has changed over time. If a lead stops visiting your website or downloading the offers, then it may be a sign of a decline in interest. In this scenario, you can subtract the points of the leads that stopped visiting or engaging with your website for a certain period of time. This timeline is different (10 days, 30 days, 90 days etc.) for different businesses depending upon the sales cycle.
A lead may opt-in to receive e-mails from your business. However, it does not show how interested this person may be in purchasing your products or services. Use the ‘Open and Clickthrough rates’ to learn about the interest level of the leads. It enables a sales team to learn the following facts.
- Who opened all the e-mails in the lead nurturing series?
- Who clicked through offers or promotion emails?
Based on such information, the sales team can find out the leads that seem to be most engaged with your products/services. Assign a higher score to the leads that click through on high-value e-mails, such as demo offers.
You might have some idea regarding how interested the leads are in your brand based upon how engaged they are with your brand on social media. For example,
- How many times did the leads click through on your company’s Facebook posts or tweets?
- How many times did they share the posts or did they re-tweet?
You can assign points to the leads with certain numbers of followers if they are active on the social network.
You may award negative scores to the leads that filled out the landing page forms in a manner that seems like spam. For example,
- Did they capitalize the first name, last name, or name of the company?
- Did the lead complete any form fields by typing side-by-side letters on the ‘QWERTY’ keyword?
Take into consideration the type of e-mail addresses used by the leads. For example, if you sell to businesses, then subtract the points from the leads using Gmail or Yahoo! email address.
How to Determine Important Metrics for Lead Scoring?
If you have lots of data to weed out, then it may become difficult to determine which data is more valuable. You can consult with the sales team to find out important data. Conduct interviews with the customers or use the reports available through analytics. Thorough research enables you to determine the type of content that will be useful for the lead conversion or that enables you to attach points to certain e-mails, offers, etc.
Collect Information from Sales Team
Sales representatives communicate with the leads who turn into customers and who do not. They know which pieces of marketing materials may encourage conversion. Through sales representatives, you can learn about the offers or blog-posts capable of converting the leads. You can assign points to each piece of collaterals based upon their effectiveness.
Talk to Customers
It is equally important to have the customers’ opinion with regards to the type of favourite content. The sales team may claim that certain types of content are more useful for lead conversion. You may find out that the people who have gone through the sales process have different opinions with regards to the content.
You may interview a few customers to learn what encouraged them to make a purchase from your brand. You have to interview customers who had ‘short sales cycles’ alongside interviewing those with long sales cycles. It enables you to receive different perspectives.
You also have to consider the hard data of the marketing analytics when scoring the leads, as the attribution report enables you to find out which marketing efforts led to conversions throughout the ‘sales funnel’.
- Looking at the content that converted the leads to customers is not enough. It is equally important to find out what types of content were viewed by the visitors before they turned into leads.
- You may award particular points to the visitors who downloaded that content that turned them into leads and may award a higher number of points to those who downloaded the content that converted these leads into customers.
Use the ‘contacts report’ to find out which pieces of content on your website are valuable with respect to the conversion. This report enables you to find out the number of contacts or the amount of revenue certain marketing activities (e-mail campaign click-through, offer-downloads, etc.) has generated. You also have to note down the activities that tend to be first-touch or last-touch conversions (and so on) and have to assign the points accordingly.
The easiest way to score the leads is to set varying thresholds and assign points to each which provides the ranking. For example,
If you want to have the leads from large businesses and may ascertain that a particular action (downloading something from your website) is likely to convert the leads. You can create a lead scoring model after that and divide it into three categories – hot, warm and cold.
In this scenario, you may consider a target persona (from a business with more than 250 employees) to be cold if an eBook is downloaded from your website. On the other hand, if a target persona from the same company downloads a demo of your products or services, then you can consider this lead as a ‘hot lead’. And score this lead with 100 points when using a 100-point system.
The leads with the highest score may be purchase-ready. However, it does not mean that the leads with a lower score will fail to achieve the same status. A prospect may turn into a lead or an MQL may turn into a SQL and move up the rankings over time based upon their actions, such as social media comments, e-mail opens or eBook downloads. It shows an increase in interest.
What are the Methods of Lead Scoring
You can calculate the lead score in the following manner.
Manual Lead Scoring
- At first, you have to calculate the lead-to-customer conversion rate of all leads. To get this rate, you have to divide the number of new customers by the number of leads.
- The following customer attributes represent higher quality leads and you have to find out such attributes.
Customers who requested a free trial of something at some point
Customers in the finance industry
Customers with 10-20 employees
You can select the attributes based upon the conversation with your sales team, the data collected from the analytics and so forth. However, determining which customer attributes seem useful has to be your decision.
- You have to calculate the close rates of each attribute and may accomplish it in the following manner.
- By calculating the ‘close rates’ of every type of action that a person takes on your website
- By calculating the ‘close rates’ of every type of person taking an action on your website
- You have to compare the ‘close rates’ of each attribute with the overall close-rate and have to assign ‘point values’ based upon the result.
- At first, you have to search for the attributes with ‘close rates’ higher than the overall ‘close rate’.
- Then, you have to choose the attributes that will receive points and how many points to assign to each attribute.
- At last, you have to base the point value of each attribute upon the size of individual close rates.
This method of lead scoring is considered to be a mathematically sound process, as it uses a data mining technique. It is a complex process which is why it is more intuitive to the actual close rates.
You have to build a formula in an Excel sheet wherefrom you will learn about the probability of a lead converting into a customer. The logistic regression is considered to be a holistic method of lead scoring, as it considers how all types of customer attributes interact with one another. These attributes are –
- Company size
- Whether or not someone requested a trial
Predictive Lead Scoring
This is a data-based method of scoring leads.
- It analyzes the data around successful leads.
- Collects internal information from the marketing automation solutions and CRM
- Includes digital footprints from the third-party sources
Predictive scoring finds out the information that your customers have in common or the leads that did not close have in common. It comes up with a formula that classifies the contacts by the level of importance based upon their potential to become customers. Thus, the sales team can prioritize the leads and try to engage those who are interested in your business.
The lead follow-up strategy always remains optimized with predictive lead scoring, as it uses machine-based learning.
Start Scoring Your Leads
A lead scoring project may seem complicated. However, you will reap the benefits right after executing the lead scoring system. You need not wonder which leads are the best and you will not send unqualified leads to the sales team. This leads to an improvement in the efficiency of your sales team alongside increasing the company’s productivity. The organizations using lead scoring systems have noticed around 77% improvement in lead generation ROI. Hence, it is worthwhile having a lead scoring strategy for your business or company.