After attracting high volumes of leads, what should you do next? Leads are not made equal, and separating the good, quality ones from those that aren’t can be challenging. This is where a solid lead scoring model comes crucial.
According to a report by APSIS, only 44% of companies are using a lead scoring system. By maximizing this methodology, you can leverage your company from your competitors by uncovering insights to improve your processes and sales funnel. In fact, it even exceeded expected benefits such as increased conversion, sales productivity and effectiveness, and measurable ROI.
Before delving into how you can build a killer lead scoring model, let’s talk about whether you should have one and why. It is a tedious process, hence, it’s important to determine if it’s suitable for your business to ensure you won’t waste time, effort, and money dedicated towards it.
Why Implement Lead Scoring?
Lead scoring doesn’t come as a ‘one-size-fits-all’ solution. In fact, not every business needs an advanced lead scoring model. Lead scoring is a methodology that gives you an automated and scientific way to rank your prospects, in a quantifiable sense, their perceived value in your organization.
For instance, Melinda, a marketing director, visits your website. Since you don’t know anything about her yet, she starts from the score of 0. As she interacts with your website more, her score increases: you get information about her title (+10 points), she requested a demo (+10 points), she’s from a startup company (+5 points). Once she reaches a certain point (based on your criteria) where she’s deemed sales-ready, it’s time for your sales team to reach out and try converting Melinda into your customer by closing a sale.
Lead scoring is mostly used for improving sales process, aligning sales and marketing, prioritizing leads, and creating higher quality conversions. To determine if it’s necessary for your business, here are some questions to consider:
- Do you have a high volume of leads that are more than what your sales team can follow up with?
- Do you have enough data for lead scoring?
Do you often have leads that are not fit or qualified when your sales team contacts them?
- Do you have a specific content from a strategy that needs to be delivered to a lead at a certain point in their buying journey?
- Do you think your sales processes can be more efficient and effective?
If you answered yes to all or most of these questions, then you’re ready to start with your lead scoring system. Otherwise, you may first focus on generating more leads, establishing a service level agreement (SLA) between your sales and marketing teams, and collecting and tracking the right information from your forms and website.
Implementing a lead scoring model is difficult to accomplish manually because a lead’s activity can change every day. You need technology for optimal results. FinancesOnline, a trusted SaaS software review platform, evaluated the top 20 online CRM tools, many of which have excellent lead management including Freshsales. We strongly suggest you pick a preferred software to implement the modeling we’ll discuss below.
Basic Framework of Lead Scoring Setup
According to SiriusDecisions, 68% of B2B organizations are implementing lead scoring. However, only 40% of salespeople have reported to get value from it. Various factors contribute to the failure of the remaining 28%, but starting on the right foot when implementing a lead scoring system is beneficial down the road, especially when your lead management becomes more complex and advanced.
Two categories of data are needed to successfully build the foundation of your setup and implement lead scoring. This helps you prevent foundational mistakes and avoid generic, ineffective data.
Demographic Lead Scoring
First, you need to outline what your business needs are by identifying your ideal lead. To start, you need to determine your demographics based on your lead’s characteristics. Who is most likely to purchase your product or service compared to others? Is it small or large businesses? In what industry? In what level?
Lead-capture forms help you collect this information. You can easily identify four demographics:
- Job title or role
- Company size or the number of employees
- Company type or industry
Assigning points is based on your ideal lead. For your company type, B2B may get the highest points while B2C gets lower points. This also goes for the lead’s industry (such as HR, finance, or legal, among others) and seniority (is the lead a VP, director, or manager?).
Behavioral Lead Scoring
The next type of data you need is how a lead interacts with your website. This scoring is based on the actions your lead performs to indicate their interest. Behaviors such as opening an email, requesting a demo, and attending a webinar receive positive points as they show interest from your lead. Meanwhile, unsubscribing gets negative points as it’s a sign of disinterest from the lead to go further down your sales funnel.
Lead intelligence data and closed-loop analytics are helpful during this stage. These are some examples of the types of interest you can observe from your leads:
- Web pages they viewed
- Emails they opened
- Content they downloaded
- Webinars they signed up for
In addition to the trends in their behavior, it is also essential to consider your lead’s activity level. Set the number, frequency, and time span before a lead becomes sales qualified based on the typical engagement that your website receives. Here are some examples:
- Number of viewed web pages
- Number of completed forms
- The typical sales cycle for your company
How to Build a Killer Lead Scoring Model
Once you completed your basic framework, you may proceed with combining the two together to paint a complete picture. Today’s systems recommend you to keep a separate and combined score of the two. It is because demographic data tends to be stable while behavioral data may change in certain periods of time.
Like we mentioned before, lead scoring is a tedious process. Getting your behavioral and demographic data is only the start. After you have established both categories of data, you can proceed with the following:
1. Identify your criteria
Using your framework, you already have the foundation on the criteria that make your MQL (marketing qualified lead). Your MQL is the lead who—compared to other leads—is more likely to convert into a customer based on their demographic and behavioral data. To set up your lead scoring system, you’ll have to assign points or scores as a basis.
During this stage, it is crucial to look at your company’s unique attributes including customer base, sales cycle, and key differentiators. In order to extract insights, having lead intelligence and analytics in place is crucial. When done right, focusing your efforts on high quality leads results to more conversions. In a Lenskold-Pedowitz study, lead scoring was found highly effective and efficient by 68% of marketers as it enhanced the revenue contribution of their programs.
2. Assign values
Figuring what the score should be may be one of the hardest parts of lead scoring. With the help of your MQL analysis and careful planning with your sales and marketing teams, however, this stage can be streamlined.
In most cases, the threshold for the scale is from 0 to 100 but you can set any point value you like. To determine the individual lead score, you will have to add up points based on your criteria.
Here’s an example: Going back to the demographic and behavior lead scoring, you’ve set points for each input or behavior. If your ideal lead is an SMB, a company with 100 employees may get 8 points while a company with 1,500 employees gets one point. Meanwhile, a student may get a negative point. Behaviors such as opening an email (positive factor) and unsubscribing (negative factor) are to be included as well.
In Freshsales, there are three main categories: hot, warm and cold. A lead falls on a certain category based on their lead score. Hot leads have a score above 70, warm leads get a score between 30 to 70, while cold leads have a score below 30. You may also customize the range based on your business needs.
3. Determine sales-ready score
At what point is your lead ready to purchase your product or service? This is the main point of implementing a lead scoring model, after all. By identifying leads who are sales-ready, your sales team can prioritize who to follow up with to maximize time. This is crucial as Gartner reports poor follow up loses you 70% of leads. Additionally, it helps you identify the leads who need more nurturing and avoid reaching out to leads who are not yet ready to buy.
When deciding which leads should be handed over to sales, you need to look at the activity from your previous leads. As per Marketing Sherpa, 73% of leads are not yet sales-ready. This is where lead scoring becomes more important as you have to ensure your sales team will only reach out to your lead once the time is right. Since the lead score can change from day to day, a tool such as a CRM solution with lead scoring feature updates the score in real-time based on your criteria.
Freshsales, for instance, automates lead qualification where you can see a lead has been active and view which page they are visiting to respond in an efficient manner. If a lead is visiting a product page, you can grab the opportunity to send a personal email and invite them for a product demo while their interest is still high.
4. Test your model
The three steps we mentioned above are the most crucial factors to cover. But to maximize your efforts on your hottest leads to drive more sales, taking a step further will set you apart from your competitors by covering all bases.
Lead scoring models aren’t perfect and set in stone. By testing it in real-world scenarios, you’ll get your hands on more reliable results by considering more factors. For instance, false positives may be present such as leads with high scores but don’t convert or, conversely, leads with low scores that convert. You may monitor the model for a couple of months first before implementing it or analyzing past leads.
5. Aim for continuous growth and improvement
Most importantly, a lead scoring model that’s developed for growth is the real game-killer. Be open for maintenance, testing, tweaking, and improvement. Developing your lead scoring system takes time, but it can always be improved.
You may check in monthly or biweekly to make sure everything is working fine and updated. In addition to your CRM tool that automates solution, you may identify scores, especially for behavioral lead scoring, that needs to be reset over time. Also, work hand in hand with your sales department as they are more experienced in handling your leads, hence, they should be involved in the process.
About the author
Editor-in-chief of FinancesOnline and a head of their review team. Specializes in writing about the SaaS and B2B software market and the role of software and cloud-based solutions in helping companies grow and acquire more customers.