Operating at the highest caliber in business means trimming inefficiencies. For the sales team, this means abandoning cold leads and cozying up to warm ones.
But, hold on a minute, how does one grade a lead, anyway?
Well, there’s a term for that, and it's called lead scoring.
Lead scoring involves sifting through your business’s leads and evaluating their perceived value, usually through a quantitative grading system. The resulting outcome reveals a lead’s underlying quality, guiding your sales team to follow up, nurture, or temporarily abandon them.
This methodology is great for sales teams and marketers because it assigns each lead a number value. This helps them focus their marketing efforts on the top-of-the-list leads.
While this concept may seem straightforward enough, the execution can be tricky. It can also give rise to the following questions:
- What variables affect lead scoring?
- How to create an effective lead-scoring system for my business?
- What underlying attributes differentiate a warm lead from a cold one?
If you want to find the answers to these points and learn more about lead scoring, read on.
What Is Lead Scoring?
Lead scoring is the systematic process of assigning a score to a set of business leads. It’s a system used by sales and marketing teams to hone in on high-value and qualified customers that can contribute to business growth.
The ranking is based on accumulated points based on predetermined metrics of your company’s choosing. The higher the score count, the higher your leads’ probabilistic chance of buying your product.
Businesses can use two main data segments to create lead scores: implicit customer data and explicit customer data.
- Implicit customer data: This data tracks how customers engage with your company website. It is inferred based on customer behavior and website interactions. Some behavioral metrics it tracks include website visits, email opens, click-through rates, content downloads, video views, and time spent on the page. Businesses can gather this data through website tracking tools and marketing analytics tools.
- Explicit customer data: This data encompasses direct information provided by the lead, such as demographic details, age, job title, company size, and geographical location. The consumer provides this data directly through sign-up forms, surveys, and online reviews.
Both implicit and explicit data points provide a comprehensive look into your average customer profile.
Let’s illustrate an example of implicit customer data. If a customer performs a certain trackable action, say, opening a marketing email, this can increase their score by a certain value, say +5. If their email bounces back because it remains unverified, subtract -20.
If they open your website’s career page, you can decrease their score by -10 or -15.
As for explicit data, you can look at the survey results and add or subtract their score if the lead fits certain conditionals.
Let’s say your company is targeting business owners. If a lead labels himself or herself as a CEO in the sign-up form, you can add a value of +10 to their name.
If they’re a marketing intern, an associate, or any other professional, you can leave the value as is.
Tallying the results of these actions can give you a lead’s individual score. Doing this across multiple leads helps you highlight the best potential fit for your company and the ones you should nurture.
Ultimately, the value you associate with specific actions or attributes depends on your own company standards (we do have specific models you can take inspiration from, but more on that later).
Why Lead Scoring is Important
Lead scoring is critical for sales teams for a variety of reasons.
The first reason is that it helps sales teams prioritize their lead conversion efforts better. A lead scoring system helps the sales department segment and prioritize leads with the highest likelihood of conversion.
For companies with strained resources or limited budgets, narrowing down sales and marketing efforts to the most interested segment increases the chance of closing deals and targeting the customers who most need your product.
The second reason is that it helps optimize your marketing spend. Instead of spreading your marketing budget thin across a wide subset of leads, you can tailor your campaign to the most qualified leads. This not only lowers your customer acquisition cost but also enhances engagement through a more targeted campaign.
4 Lead Scoring Models
Demographic Scoring
The demographic lead scoring methodology evaluates leads based on a customer’s profile. Businesses using this model typically rank leads based on a customer persona, considering factors such as job title, gender, age, and location.
The closer the lead fits the business’s ideal customer profile, the more qualified it is and the higher it will be in the lead score list. Furthermore, the farther away a lead may be from your desired scope, the less desirable it will be for your sales team in terms of acquisition.
You can subtract points for categories of people that don’t fit your lead profile. For instance, if you only sell to Australian citizens, you can give a negative score to people based in Europe or the USA.
Generally speaking, your sales and marketing team will prioritize individuals at the top of your list when pushing out marketing materials. This helps connect your company with the best leads.
Firmographic Scoring
If you’re operating a B2B business, then another way to score leads is by considering their attributes in a professional context.
Rather than looking at a lead’s individual characteristics, you look at their position in the company, the nature of their company, the size, and other key business metrics.
For instance, you may choose to prioritize nurturing CEOs of large technology enterprises as opposed to CEOs of a small mom-and-pop shop and grade them accordingly.
Firmographic scoring data is based on explicit data that the lead fills up, typically in sign-up forms or surveys. Using your own lead criteria and the lead score, you can give or deduct points to leads based on their association with a particular business or industry.
Behavior & Suitability Scoring
How customers navigate your website can tell a lot about their motivation. If a lead has gone through multiple pages and downloaded some informational materials, then they may be a highly qualified lead and need to be graded accordingly.
Conversely, if a lead has only looked through your website’s home page and career page, this may indicate a bad lead and would need to be graded lower.
That said, leads can and do change their behavior over time.
If a previously qualified lead starts to engage with your website less and less over time, then you should move them lower down your lead score list.
Be sure to actively look for leads using lead-finding tools and nurture your current ones to ensure you have a healthy and active user base.
Email Engagement Scoring
According to lead gen statistics, 78% of marketers believe that email outreach remains the best way to generate and capture new leads. And it’s not hard to see why. Metrics such as open rates and click-through rates provide insights into a lead's interest and engagement.
An engaged lead would score higher than one that rarely interacts with your emails.
Using email automation and marketing tools, you can gather information and give appropriate scores for your leads. This helps in narrowing down your marketing efforts to the more engaged of the lot, improving the effectiveness of your cold outreach strategies.
Understanding Lead Quality
Before you assign values to leads using a lead score model, you need to know what constitutes a good-quality lead.
Warm leads are the customers you want to attract, as they’re interested in your offering and about to make a purchasing decision.
On the other hand, you wouldn’t want to spend anything more than a dime on cold leads, or people who show little to zero interest in your brand.
If you’re struggling to find and attract good leads, there are many ways to secure, high-quality leads. This includes:
- Making sales funnels
- Using lead qualification tools
- Creating good content
- Promoting personalization
- Engaging with the sales team
In addition, you can also use lead finder tools to get your name and business in front of your ideal prospect’s email.
Key Takeaways
Lead scoring hinges on data, particularly, implicit and explicit data. By leveraging these data points in your lead scoring system, you can improve your conversion rates and lower marketing spending to manageable levels.
But don’t forget: before testing any lead-scoring methodology, you need to find leads in the first place!
Need a tool to help propel your lead acquisition efforts? Get started with Instantly.a today.
