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If you’re a business that generates and communicates with a large amount of leads, it can be difficult to know which of them are more likely to become customers. One key strategy that has emerged to streamline the sales process and ensure that efforts are focused on the most promising prospects is lead scoring. If you're new to the concept or looking to refine your approach, this guide will walk you through what lead scoring is, its benefits, and best practices for creating an effective lead scoring model.
What is Lead Scoring?
Lead scoring is a methodology used to rank contacts against a scale of specific criteria that represents the perceived value each lead represents to the organization. This criteria can include traits such as a contact’s industry and demographic information, the number of interactions a contact has had with the business’ content, specific actions a contact has taken, and much more. The resulting score (usually having a threshold of 100 points) is then used to determine which leads should be prioritized by the sales team. Typically, this scoring is based on a combination of explicit data (information provided by the lead such as company information and job title) and implicit data (behavioral data observed through interactions with your company such as web page views, form submissions, etc.).
Benefits of Lead Scoring
There are a variety of benefits when it comes to implementing a lead scoring model for your business. Some of these benefits include:
Improved Efficiency and Focus
By more accurately identifying and prioritizing the leads that are most likely to convert, sales teams can focus their efforts where they are most likely to see results, saving time and resources.
Better Alignment Between Sales and Marketing: Lead scoring fosters collaboration between sales and marketing teams when determining which specific criteria makes a contact more likely to convert. Along with the explicit data provided by the contact, Marketing can nurture leads through such content as marketing emails, content offers, etc. until they reach a score that indicates readiness to buy, ensuring sales teams receive high-quality leads.
Enhanced Customer Experience: By understanding the interests and engagement levels of each contact on specific content, businesses can tailor their communications to unique contact segments and offer more relevant content, creating a more personalized experience.
Increased Conversion Rates: Focusing on high-scoring leads increases the chances of conversion, as these leads have shown higher levels of interest and engagement with your company.
Data-Driven Decisions: Lead scoring provides insights based on data, such as what interactions are leading to contacts reaching the lead scoring threshold the most. This in turn helps organizations to refine their marketing strategies and better understand what drives their prospects.
Best Practices for Creating a Lead Scoring Model
If you are considering implementing a lead scoring model of your own, or if you currently have a model in place but want to learn how to improve upon it, consider these best practices:
Identify Your Ideal Customer Profile (ICP): Start by defining what your ideal customer looks like. This includes demographic information, company size, industry, job title, etc. The clearer your ICP, the more accurate your lead scoring will be.
Determine Scoring Criteria: Identify the explicit and implicit data points that will be used in your scoring model. Remember that explicit data might include job title, industry, and company size, while implicit data might include website visits, email opens, content downloads, and social media interactions.
Assign Point Values: Not all actions or attributes are equal. Assign different point values based on the importance of each criterion. For example, a webinar sign-up might be worth more points than a website visit. If you need assistance with this, work together with your marketing and sales team to review recently closed won customers. Look into what specific explicit and implicit criteria these customers have in common (i.e. they all submitted a specific form, they watched a certain video, etc.), and score these criteria higher.
Set Thresholds for Sales Readiness: Determine what score indicates that a lead is ready to be passed to sales. This threshold will vary depending on your business model and sales cycle, however a threshold of 100 points is generally the default threshold.
Regularly Review and Adjust: Lead scoring is not a set-it-and-forget-it strategy. Regularly review your scoring model at least once every quarter to ensure it remains accurate and reflective of actual conversion rates. Adjust point values and criteria as needed based on performance data and feedback from sales, new products or services offerings available by your company, as well as changes in the market, industry, or customer behavior.
Incorporate Negative Scoring: Not all actions are positive. Implement negative scoring for behaviors or data points that indicate a lead is less likely to convert. For example, a lead that unsubscribes from your newsletter or a company that is located in a country you do not service might receive negative points.
Leverage Automation Tools: Use marketing automation platforms to streamline the lead scoring process. Tools like HubSpot can help automate data collection, scoring, lead nurturing, and passing contacts over to sales when they’ve reached the scoring threshold, making the process more efficient and scalable.
Examples of Lead Scoring Criteria
There’s a variety of ways that you can create your own lead scoring model if you’re just getting started. Below are some examples of scoring criteria that you can use as a starting point for your lead scoring model:
Explicit Data
Demographic Information:
- Job title
- County
- State/Region
- Age
- Income
Company Information:
- Industry
- Number of Employees
- Annual Revenue
- Street Address
- Time Zone
Implicit Data
Online Behavior:
-
Number of Specific Pages Viewed
-
Bottom-of-Funnel Form Submission (i.e. a “Contact Us” form)
-
Content Offer Downloads
-
Webinar Registrations
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Viewed Specific Landing Page
-
Converted Through PPC Ad
Email Engagement:
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Number of Emails Delivered
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Number of Emails Opened
-
Number of Emails Clicked
-
Replied to Specific Email
-
Marketing Email Subscription Enrollment Status
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Number of Bounced Emails
Time-Delay Actions:
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Submitted Contact Us form in the last 30 days
-
Clicked a link in an email within the last 60 days
-
Viewed a page on a specific domain within the last 90 days
With the scoring criteria above, we can then create an example of a customer journey that a contact may take with specific criteria chosen. For this example, we’ll have the lead score threshold be at 100 points:
- Contact Income is greater than or equal to $75,000 - 5 points
- Company Location is in California - 5 points
- Number of Employees is greater than 100 - 10 points
- Viewed greater than 5 pages on the company website - 15
- Downloaded a content offer - 25 points
- Marketing Email Clicks is greater than 3 - 15 points
- Submitted “Schedule a Demo” Form - 50 points
With the example above, the contact would reach a score of 125 points, surpassing the lead scoring threshold and classifying him as a marketing qualified lead. Remember that the scoring criteria used above are only part of the example, and that your own lead scoring model, criteria, and scoring will be unique to your business.
Once you are satisfied with the lead scoring setup, there are several ways you can utilize it to meet your needs:
Automated assignment: Create a list of high-scoring leads and set up a workflow to automatically assign these leads to a contact owner.
Deal tags: For high-scoring contacts associated with deals, create deal tags to categorize them as hot, medium, or cold leads. The best part is that you can color-code these tags for easy visual identification within the sales pipeline.
Performance reports: Generate monthly or yearly reports to evaluate the performance of contacts based on their scores and lifecycle stage.
Task creation: Create tasks for high-scoring leads that have been inactive for more than 30 or 60 days to ensure timely follow-up.
Lead scoring is a powerful tool that, when done correctly, can significantly enhance the efficiency and effectiveness of your sales and marketing efforts. By more accurately tracking and focusing on the most promising leads, you can improve closed won rates, better align sales and marketing teams on the definition of a marketing qualified lead, and make better data-driven decisions. Remember, the key to successful lead scoring lies in continually refining your model based on real-world data, industry changes, and feedback. With these best practices, you can develop a robust lead scoring system that drives your business forward.