What is Lead Scoring and Why is it Important?
When it comes to marketing, lead scoring is one of the most powerful tools for marketers. Not only does it let marketers identify leads and prioritize them, they also open up long-term sales opportunities. However, it is not really easy to configure lead scoring models because it depends on the product that you market, the industry that you work in, quality to leads and many other factors. It also helps marketers evaluate inbound leads and predict whether they are going to buy from you or not.
Most B2B marketers understand it’s importance in marketing and have lead scoring models ranging from simple interactions to multiple interactions based complex models. In many cases, marketers overlook or wrongly configure lead scoring models thereby losing out on leads. Not only does lead scoring let you identify leads and prioritize them accordingly, they also open up long-term sales opportunities for your company.
What is Lead Scoring?
Lead scoring is a methodology of determining where a lead is in the sales cycle. An effective deployment of the process of lead scoring helps the marketing department to determine which leads should be passed on to sales and which ones need more nurturing before being sent off to Sales for closure.
Lead scores rank prospects against a scale that assigns a specified value to every lead depending on their position on the buy cycle. By utilizing information that visitors on your website enter into email capture forms, marketing department can sort out leads that qualify their lead qualification criteria so that they can be passed on to Sales.
How to setup Lead Scoring Model?
Long before you set up a lead scoring model, you must have correctly identified the buyer personas, positive and negative actions of prospects on your site/app and duration of the sales cycle. There is a slight difference between leads that show interest and leads that show intent. Actions, like downloading a pdf and viewing blogs, should be considered as an indication of interest in your industry/product/ technology.
On the other hand, actions like filling out a contact form, signing up for a free trial indicate that a lead is interested in your product and ready to receive product related information. You have won have the battle if your scoring model can differentiate between these two.
The next step is to clearly define your buyer persona to qualify the best leads for Sales to follow up on. Set up a customer profile by asking questions to yourself. The questions can range from who you want to sell a product to and what your customers’ needs are.
Make sure that the Sales team does not spend time wasting resources on a high scoring lead that has no intention of buying any product from you, for example, someone who is merely looking for a job in your company.
Positive lead actions include form submissions, content download, specific web page views like pricing page, email opens and clicks etc. and negative actions may include email un-subscription, specific page views like career page views.
How does Lead Scoring help?
- Increased Sales: Lead scoring helps you to focus on those leads that your company seems to be the most valuable. The rest of the leads that do not qualify can be nurtured by the Marketing department until they are ready for handover to Sales. Using this process of prioritization, your Sales department will receive the leads that have a greater chance of closure.
- Better Marketing: Lead scoring helps marketers understand the nature of leads that qualify the most. Depending on their characteristics, marketers can target inbound and outbound marketing programs, providing sales with a greater number of good leads. You will now know which marketing channels work best for you. What are the best-performing marketing campaigns and messages and you may then scale up your best performing campaigns?
- Marketing and Sales Alignment: Lead scoring lays down the foundation of a better relationship between marketing and sales by instilling mutual respect for each other. Sales teams complain about poor lead quality when they miss their quotas and Marketing complains that Sales didn’t try hard for closure. It’s an age old battle and promises to live on, hampering revenue outcomes of the company. With Lead Scoring both marketing and sales are on the same pitch when it comes to lead quality definition. They have a common language to share information regarding lead quality and quantity. Alignment of these two departments also depends on the accuracy of the lead scoring model. A strong scoring model will keep them aligned and increase productivity. If the scoring model starts losing credibility, it impacts the relationship of marketing and sales.
Why is Lead Scoring Important?
- Lead Segmentation: Based on the information provided by leads in email capture forms, lead scoring models tend to segment leads accordingly. Normally you would attract leads through various marketing campaigns and channels. Every lead is unique and they come from different purchasing backgrounds. So each of these leads will approach your product differently. Your lead scoring model will evaluate each of these inputs and qualify lead based on designation, purchasing power, buyer demographics etc. The lead which needs further nurturing can be segmented into a separate list.
- Lower CPL (Cost-Per-Lead): Many startups choose to buy leads from reputable vendors because generating a large number of leads is a bit difficult in the beginning. What startups need to ensure is that the CPL leads to a positive rate of interest. Inconsistency and inferior quality of leads become a concern in these cases, so the only way to determine the quality is to run them through your lead scoring model, which will analyze the leads activities to determine their position in the buying cycle.
- Prioritize Sales: By deploying a robust lead scoring model, the marketing team can efficiently achieve its goals and manage the allocated marketing budget. Such a model saves time for marketers that can be used for other productive tasks. However, you should always tweak and test your lead scoring model to test its effectiveness otherwise it will start to falter.
You may not be able to build the perfect model immediately but take a plunge if you haven’t and strengthen your lead scoring models over time. You should periodically review your model and ask your sales representatives about the quality of leads. This will help you make necessary changes to your predictive lead scoring model when needed. Data is the key when it comes to lead scoring, whether it is data that helps you qualify leads or it is data that helps you correct your model.
According to Sirius Decisions, “Now there are 14 times more B2B organization with Predictive Lead Scoring models than there were in 2011.”
If you want to get started with lead scoring then please feel free to email us at [email protected] and we will be glad to work on your lead scoring model.