What is Lead Scoring?
Lead scoring evaluates each lead and gives them a numerical score. Based on certain characteristics, the leads each earn a higher or lower score. This score matches their likelihood to buy your product or service. The higher the score, the more likely the lead will buy.
Lead scoring helps sort through data to find the leads you should focus on. Data includes many factors making the process somewhat complicated. Set a benchmark by analyzing the conversion rate for all leads and compare future leads to this benchmark. Sales teams can use this data to prioritize their list of leads.
Lead scoring helps with inbound marketing, where fostering relationships is critical. Knowing which leads to nurture helps ensure the most efficient use of resources.
Lead Scoring Models
To assign an accurate lead score, you need to look at several points of data. Known as lead scoring models, these factors help categorize leads to better determine a lead’s likeliness to buy. These data points help assign a score to each lead.
Here are some of the most common lead scoring models:
To sort through data, you must find which data points matter. Reducing the number of spam entries helps refine all data points and increases accuracy. Look for entries lacking punctuation or capitalization in the names. Also, compare email addresses to your current customers and pay attention to any outliers.
Demographic information plays a huge part for every business looking to analyze their customer base. Demographics include factors like age, race, gender, income and location. Add points to the lead score for leads that fall into the group you sell to. Subtract points for those outside your target audience.
Demographics help put qualifiers and definitions on who buys your product. Analyzing demographics helps figure out who buys your product versus who you intend it for. Knowing the difference helps prepare adjustments to your marketing strategy.
Every lead’s behavior on your website helps determine the likelihood of that person buying your product or service. Factors including time spent online, pages visited and offers selected make up a lead’s online behavior. Examine your website’s traffic data and give a score to each lead using these factors.
Quality and quantity for all online behavior matter greatly. Certain pages on your website should score higher than others. For instance, a lead who views the landing page twice should not score as high as those viewing pricing pages. Each page and offer should have an assigned value. Add these up to score the overall online behavior of each lead.
Additionally, the time between engagements alters a lead’s score. Deduct points for leads who do not view your website after a certain amount of time.
B2B organizations need to evaluate leads based on industry, size and/or type of business lead. Leads that fall outside of your business’s range receive no or negative points. Look at the industry as well as the place within that industry. You can determine this information through questions on your landing page.
For B2B organizations, company information is basically demographic information. Find the qualifiers within your range to prioritize your leads.
Look at your social media metrics to examine leads based on social engagement with your company. Award points to leads who interact more with shared links and posts. Leads sharing your posts who have a large following base should score higher as well.
Social engagement also helps figure out additional demographic information when collected correctly.
Customers who receive emails can give a lot of data. Finding who opens your promotional emails and follows those links helps determine all leads’ likeliness to buy. Signing up for an email list might get one lead point. When a lead opens emails and clicks on links or offers they get more points toward their lead score.
Include a read receipt on every email you send, and include some sort of link or offer. Interaction with this included material shows higher levels of interest and gives leads a better reason to buy.
Which Factors Matter Most?
Lead scoring takes so much data into account that it can get tricky sorting through it all. Knowing which data points matter most makes your scoring process easier and more accurate.
Each business has its own needs. To find your own business’s important data, focus on sales teams, customers and analytics.
Interview your Sales Team
Sales representatives man the front lines of all sales-oriented businesses. Their experience and knowledge can prove invaluable when it comes to understanding your customer base. They know what makes customers buy.
Talk to your sales representatives to figure out which marketing materials tend to work best. There might be a piece of information that really gets customers interested. Knowing this allows you to assign a better score based on exposure to this information or material. Additionally, it also helps focus on refining your marketing strategy around the solution that works.
Talk to your Customers
Sales teams and customers might have a different opinion about what led to a sale. Hearing it from both sides allows for a more objective understanding of what closed the deal. Interview a few customers regarding what made them buy. Each data point helps paint a better picture of who buys your product and why.
Once cataloged, this information better helps the whole lead scoring process. Conduct interviews whenever implementing a new marketing strategy to keep updated information. Also, look for diversity in the customers you speak with. You want a good measure of customers exposed to a long and short sales cycle for more accurate data.
Look at Analytics
Hard data always helps put a number score to every factor. Use your marketing analytics alongside information from interviews with your teams and customers. Analytics can better help capture information even those exposed to it are not aware of.
Make sure you capture analytical data pertaining to each step of the marketing funnel. Not only must you know what made a customer buy, but also what made that person become a lead initially. A lead’s first impression might determine whether or not he or she buys. Knowing this impression helps determine what factors influence your conversion rate.
How Many Lead Scores are Enough?
The number of lead scores you need to look at depends on the size and scale of your business. More customers often require more lead scores to make an accurate assessment. A small pool of customers generally produces simpler data and larger ones need more attention.
Differences in your business over time create a need for more lead scores. New introductions to your product line or service area produce more factors. Multiple lead scoring systems help cross-reference data pools to find leads scoring high in several areas.
Here are a few lead scoring systems to keep in mind when implementing your own:
Interest vs. Fit
Just because a customer appears interested in your product or service does not mean he or she can receive it. You can create a strong lead scoring system by comparing interest levels with fitness. Fitness includes factors such as location, industry and ability to purchase. Finding a customer who fits with your business model helps determine a possible conversion rate.
Keeping in mind both a customer’s desire for your product and ability to purchase helps find the best leads.
The number of products or services you offer requires a different number of lead scoring systems. Interest and fitness can be taken into consideration for each lead regarding each specific product. That way, you can send the lead to the right sales representative.
Just because a lead does not want one product does not mean the lead will not buy from you at all. Multiple personas allow you to get the most out of each lead. Using data regarding your customers allows you to place the lead on the right path.
Cross-selling, Up-selling and New Business
Existing customers and new customers exhibit different patterns. Once they already buy, you need to look at what factors retain their business. Leads outside of the continual purchasing pattern do not need as much attention as those who continue buying. Focus the efforts of your sales team on the customers likely to buy or keep buying.
Consider the likelihood of customers purchasing from you in the future. You can determine this by looking at what they bought. Sometimes, a customer will return for accessories or other products within a type of product ecosystem. Lead scoring continues well beyond a customer’s first purchase.
Calculating a Basic Lead Score
Now that you know all about lead scoring, here are some ways to calculate it:
Manual Lead Scoring
This process requires manual value assignment for different data points. Follow these steps to perform manual lead scoring:
Calculate the Lead-to-Customer Conversion Rate of All Leads
Find this conversion rate by dividing the amount of all new customers by the number of leads. For example, five new customers out of 20 leads results in a conversion rate of one customer per four leads.
Examine Different Attributes of Higher Quality Leads
Determining what makes a high-quality lead varies due to subjectivity. A factor important to one business might not matter to another. Use your own knowledge, data and judgment to place leads on a quality scale. Once you sort high-quality leads out from the pack, look at what attributes produce this higher quality.
Use these attributes to compare future leads to, and also check the correlation between these attributes and sales. Assign a score to these attributes after confirming their relation to the conversion rate. Attributes consistently present in a buying customer receive higher scores.
Calculate Individual Close Rates of Each Attribute
Look at the actions each lead takes in relation to their assigned attribute. These actions include web pages visited and purchases made. Use the data from these actions to better determine the close rate of these attributes.
Finally, Compare Attribute Close Rates with your Overall Close Rate
Attributes with higher rates of sale than your baseline need to be given a scoring value that represents this data. Therefore, your lead scoring system will correlate with the attributes that create and reduce sales.
Logistics Regression Lead Scoring
This data mining technique uses Microsoft Excel to create a functional and accurate lead scoring system. The complex nature of the logistics regression method makes it difficult to use. However, its greater accuracy produces a more stable lead scoring method. Information entered into a spreadsheet must be as accurate as possible to avoid skewing data. The inclined can use this webpage to better understand how to create a logistics regression analysis.
Predictive Lead Scoring
Although creating and updating a lead scoring method has tons of benefits, it takes a lot of time. You must constantly update information and parse through additional data to keep a lead scoring system accurate. Predictive lead scoring offers a solution to this time-consuming process.
Using machine learning, the predictive lead scoring system automatically looks through all customer and lead data. These systems analyze common attributes amongst both those who do and do not buy. This data allows for a more comprehensive understanding of your buyer. It also helps you understand what goes wrong when a lead does not convert into a customer.
The system finally ranks all leads on the likelihood of making a purchase. This helps you better organize your sales team to prioritize high-quality leads. Not only does it save time, but the predictive lead scoring system handles all data. Nothing gets missed or overlooked.
Improve your Lead Scoring Today
Lead scoring allows you to better understand which leads to focus on and which to leave alone. However, by now you know that it is not an easy process. Thankfully, you do not have to do it alone. Here at Selling Revolution, we specialize in improving leads to pushing toward the sales goals your business needs.
We help our clients discover the attributes that make for a high-quality lead. But we do not just stop there. We continue with our clients as long as they need to help create a sales method that works. Get started improving your business today by scheduling a 20-minute introductory call.
Selling Revolution makes the difference for businesses of all sizes and experience levels. Reach out today and take part in the Revolution.