Lead scoring may be the most important thing you’re probably not doing.
Studies show that companies who adopt lead scoring see better KPI’s across the board — from lead qualification rates to conversion rates.
Ultimately, lead scoring is key to increased revenue growth.
That’s why we’re going in-depth to look at how lead scoring works, plus how you can use it to improve your lead qualification, and by extension, your entire revenue system.
- What is lead scoring?
- The 4 dimensions of lead scoring
- How to score leads
- Who should own lead scoring?
- Prominent lead scoring use-cases
Let’s dive in…
What Is Lead Scoring?
Lead scoring isn’t new. It’s been around for two decades, and many CRM’s include some lead scoring functionality.
But to make sure we’re all on the same page, let’s give a quick definition.
Lead scoring is a method to quantify the quality of a lead from a needs or a fit perspective. This makes it easy to consistently engage with the most sales-ready leads.
The output is simple.
By providing sales teams with an automated score for each lead, they can sort their list of leads and put the strongest at the top.
This can be invaluable. Especially when resources are limited.
Sales and marketing ops managers should never tackle lead qualification without having a close look at lead scoring first.
The 4 Dimensions of Lead Scoring
Broadly speaking, there are two methods of lead scoring: activity-based and profile-based.
Activity based: Activity based scoring monitors a lead’s activity with your company and then gives them an activity score that measures how likely they are to buy.
Interested leads will interact digitally with a business over the course of the entire buying cycle. They visit the website, ask questions via chat, click on ads, download whitepapers, and read your emails.
While each lead’s interaction is unique, there are patterns that can show the relevance of that engagement when it comes to qualifying a lead.
For instance, visits to a pricing page on your website, frequent engagement with case studies, or interest in scheduling a demo are all strong buying signals that increase a lead’s activity score.
On the flipside, irrelevant engagement, such as visiting a company’s career section, will lower the score.
The higher the activity score, the more likely they are to buy.
Profile based: Profile based scoring — also known as fit scoring — identifies which leads most closely fit your ideal customer profile and ranks them accordingly.
Imagine you are selling software for enterprise, SaaS, and sales teams. You’ve determined that a great fit would be a sales operations manager or head of sales working at companies that have 3000+ employees.
Now imagine two leads download a whitepaper. One mentions he’s a student at a university, and the other is head of revenue growth at Salesforce. Obviously the latter is a better fit.
As a sales team, you know which personas are most likely to fit your business offering.
However, it’s not always quick or easy to determine which clients are the best fits. Profile-based lead scoring allows for quick lead routing of the best profile matches using automated work-flows.
Both of these methods can be tackled with one of two approaches: point-based or predictive.
Point based: This approach puts the sales manager or marketing manager in control of the scores.
Point-based solutions allow them to define their own rules and criteria for the activities that increase lead scores.
For instance, they may say that a visit to the pricing page is worth 10 points, while a visit to the career page deducts 5 points, etc.
Point-based lead scoring is a traditional method, it’s easy to implement, and it offers quick results for both activity and fit scoring.
Certain marketing automation platforms include point-based lead scoring natively, but there are also stand-alone solutions such as the lead scoring solution for Salesforce SalesWings.
Predictive: Predictive lead scoring aims to provide a propensity score that indicates “likeliness-to-buy” that is based on an automated or human-trained algorithm.
Predictive lead scoring will take in various data points such as market signals, CRM data, lead activity, and more.
It then looks for correlation between that data and win rates, and provides a “global predictive score” for leads, accounts, and opportunities.
It’s important to remember that it’s not the amount of data that goes into lead scoring, but the quality of the data set and the accuracy of your assumptions.
The level of complexity you use in your lead scoring will depend on your business use-case. For most companies a simple approach will be just fine, but a combination of the above methods and approaches is ideal.
How to Score Leads
This all sounds great, but how do you actually develop a score for your leads?
You need to determine a score threshold at which a lead is automatically passed over from marketing to sales.
The process starts when a lead scoring model is being established.
Step 1: Marketing and sales teams discuss “personas.” Persona A, B, C, job seekers, investors, etc.
Step 2: The team determines which data points (lead activity or lead profile) indicate whether a persona is qualified or disqualified.
Step 3: The various data inputs are given a weight. This weight determines how strongly that data expresses lead/interest relevance. For instance, a visit to a “Buy now!” page may give 10 points, while a visit to a random blog post could give 1 point.
Step 4: When all elements have been scored, you create a few buyer journey scenarios.
For activity-based scoring, you may think about the typical buyer journey of a persona that you would consider sales qualified:
Goes to home page > Looks at products x times > Downloads white paper about product > Clicks on Google Ad, etc. > Visits contact page
Step 5: After looking at a few scenarios, you calculate how many points your model would come up with for each scenario.
Let’s say the actions in our example above would score 40 points, and some others 30. You could then set a “score threshold” of 35 points.
Step 6: Any lead who reaches more than 35 points can thus be considered sales ready and handed off to sales.
The positive impact of this is quite impressive.
You are effectively gaining control over longer, more complex and volatile buying cycles, and “silent” buyers.
This can also help with alignment between Sales and Marketing, which we’ll get into later.
Who Should Own Lead Scoring?
There isn’t a clear answer to this question, apart from “it depends.”
Historically, the rule book will tell you that lead scoring is owned by the marketing team. This is mostly due to the fact that lead scoring became popular with technology, and the marketing team used to be the one with the budget for that.
In small businesses today, it will likely be the head of sales and marketing. The sales manager or marketing manager may also be involved.
In larger companies it could be the head of marketing operations, sales operations, the CRM manager, or the global marketing automation lead — it varies.
When deciding who should be in charge of lead scoring at your org, there are a few factors to consider. Potentially, someone at your company may already have experience with lead scoring from a prior position.
Ideally, there should be just a few people, or even one, who are in charge of its success. However, getting the actual lead scoring model right should be a joint effort from different individuals in your sales and marketing organization.
If you are doing it on your own, you won’t be aligned with the rest of the team. Lead scoring is only as good — or as valid — as your assumptions.
Get input from anyone who has experience using lead scoring in the past: upper management, sales/marketing ops, all the way down to sales reps who speak with good (and bad) leads daily.
Define the inputs together, and get ideas from the various stakeholders. After that, a dedicated champion should be responsible for bringing it all together.
What technology should I use?
Selecting the right tool is a strategic technology decision that needs to be executed based on defined business requirements.
Depending on the complexity and use-case, you can choose all-in-one marketing automation platforms such as Pardot or Marketo, or upgrade your existing solution with a lead scoring solution for Salesforce, Mailchimp, Outreach.io, or any other sales and marketing tool.
The design of the lead scoring model takes real teamwork. Eventually, the responsible champion will be the one who will handle the technology and coordinate the roll out and training to the end users. These are typically marketing operations and sales operations managers for bigger companies.
Prominent Lead Scoring Use-Cases
Lead scoring is about much more than just lead prioritization.
Depending on the size of your sales and marketing organization, it can be used at various stages of your funnel and can serve a wide set of purposes.
Let’s look at 3 common use-cases, moving from the top of the funnel down to the closing.
Inbound lead prioritization
Lead prioritization may not be the only use of lead scoring, but it is one of the most common.
Whether you are a fast growing SaaS company or a large service business, you may be looking at an overwhelming number of leads coming in.
I’ve seen sales team of 50 reps handling up to 800 new leads every day.
The numbers may sound extraordinary. Your company may be much smaller. You may think this doesn’t apply to you. But you’re wrong.
What matters isn’t the number of leads, but the ratio of leads to rep.
If you have more leads than you do reps — which you should — then you need a way for your reps to determine who needs to be dealt with first.
Let’s look at an example of inbound prioritization in action.
1. New inbound leads arrive.
New leads arrive as complete strangers to you business. They arrive through a contact form, they sign up for a webinar, they download a whitepaper, they request more information, or they sign up for a free trial.
“Speed to lead” is extremely important at this stage. The most interested leads should be dealt with as soon as possible.
In fact, the Lead Response Management study found that “reps who called within five minutes of initial engagement yielded 900% more interest than those who contacted potential customers in 10 minutes.”
2. Lead scoring qualifies how “sales ready” each new lead is.
Lead scoring will look at the lead’s profile data (which they submit in your forms), and/or their behavior prior to submitting a form. It will determine which leads need immediate attention, and which can wait.
Therefore, it is important that your forms ask the right questions. Lead scoring can only be accurate with good data.
For activity-based lead scoring, you need a smart, simple approach to weigh different types of behavior quickly.
It helps to compare your marketing activities to a physical store:
Do you see that guy over there looking at your product in the corner? He was in your store yesterday and looked at pricing. Furthermore, he was comparing different models, and today he brought his wife along.
A good lead scoring model will give points for activities that indicate buying interest and score them higher.
3. Lead scoring data gets “activated.”
Good lead scoring solutions will quickly push the lead scoring data to your sales and marketing platforms.
For leads who don’t ask for a demo or a call back, imagine they simply download a whitepaper. When this happens, lead scoring data may be passed into the marketing automation platform, where it can be evaluated for how sales-ready it is.
For leads who show explicit interest, lead scores should go straight to your CRM records, where sales reps will have an easy way to engage the best leads first.
Lead routing, interest profiling, and up-selling
Activity-based lead scoring — which we consider more crucial than lead-profiling since the data set is so diverse — may be used for several other use-cases:
- Lead profiling: to understand what to sell/market to the lead
- Lead routing: to assign leads efficiently
- Cross/Up-selling: by knowing the implicit interests of a lead
At this stage we should know which leads need priority, so lead scoring switches to an individual level.
Here, multiple lead scoring takes center stage.
Multiple lead scoring is a method where you have different scores for different offerings, personas, or markets. Salesforce Pardot calls it category scoring. There are other synonyms, but they all mean the same thing.
Multiple lead scoring is relatively complex when it comes to coming up with a balanced scoring system that allows for true comparison.
It is also harder to manage over time, as you’re adding new marketing content that needs to be scored.
For most companies, a single scoring will be sufficient.
Let’s look at an example of how multiple lead scoring may work in practice. We’re going to consider use cases for the company Salesforce.com.
Lead Profiling
Salesforce.com has different website sections for each product that they are selling. Salesforce Marketing Cloud, Sales Cloud, Datorama, and many more.
Imagine a new lead is visiting the Salesforce blog and downloads their latest “State of Marketing Report” through a form.
Multiple lead scoring will qualify this lead based on their website activity.
If the lead has been mainly looking at Salesforce Sales Cloud, multiple lead scoring will detect that there is a big potential to sell them this product.
Lead Routing
Lead Routing is the process of assigning leads to the right salesperson or team.
In our example, Salesforce.com has a strong need for lead routing.
They have various sales teams that are organized by region, product, vertical, and buying stage (and probably more).
I am personally divided on how effective it is to use multiple scoring for lead routing, but in practice it is frequently used. It would be more effective to use different forms and ask very specific questions to determine the best routing.
Still, when you understand which website or which type of content a lead has been interacting with, you can, in most cases, achieve successful assignment.
By having lead scoring data in a CRM — such as Salesforce — you can then use specialized tools to do automated lead assignment.
Cross/Up-selling
Inbound leads only provide us with limited information in forms. What we ask is crucial for lead qualification.
A lead may tells us “I want X,” but they may also be interested in “Y.”
Their behavior can unveil hidden needs, and multiple lead scoring can help uncover these by providing behavioral insights to your CRM. This allows for a better, and more relevant, sales pitch.
Sales and marketing alignment
One of the most prominent use-cases of lead scoring is sales and marketing alignment.
It is an endless story — Marketing sends a lead to Sales, and Sales sends the lead back to Marketing with a not-so-friendly comment about that lead’s quality.
For marketing managers and sales operations managers alike, handing over the right leads to sales is a very sensitive task.
Bad leads will waste the sales team’s time, and take their focus away from generating revenue opportunities. Unfortunately the industry is often more concerned about the volume of leads than their quality, at the cost of sales-efficiency.
Lead scoring provides marketing managers with an actionable data point to hand over marketing-qualified leads (MQL) to sales — whether it is new inbound leads or “old” leads who are being nurtured over time.
For sales managers, lead scoring is a great way to back up their claims about lead quality. When too many leads with low scores reach the sales teams, they will be able to report on that.
With lead scoring, you can now have your marketing team “nurture” those leads that don’t yet make the cut, and make sure they have generated sufficient interest by the time the lead is ready to speak with Sales.
This also makes it much easier to troubleshoot if leads are consistently not converting.
You can raise your point threshold, or look at what in your scoring may be letting bad leads slip through.
In Conclusion
The Aberdeen research group has done research over the past years, and identified a wide range of positive impacts on your sales performance and key KPI’s — including pipeline thickness, response times, and close rates.
You should be looking at a sustainable growth of your revenue thanks to better close rates for second, third, and consecutive sales cycles.
And the best way to do that is with lead scoring.
It’s a powerful method to rank leads based on their potential for your business, allowing you to improve every part of the qualification process, and consistently improve close rates.
