Lead Scoring: Identifying and Prioritizing High-Value Prospects
Following up on leads is no longer a one-size-fits-all mentality; rather, it’s a calculated, feedback-driven strategy that allows you to best allocate resources, prioritize your leads, and ultimately generate new business in the most efficient way possible.
What is Lead Scoring?
Lead scoring is a process sales and marketing teams use to assign points to prospects based on a combination of their demographic attributes (title, company, etc.) and user behaviors (page visits, downloads, etc.). This strategy helps prioritize leads, standardizes a process through which leads are handled, and sets roles and expectations among sales and marketing teams.
Lead scoring also clearly defines the point where prospects are handed off from marketing to sales. This threshold is known as the SDR-ready score. Because this target score is set based on data, sales teams consistently receive higher-quality leads with a greater likelihood of closing.
Benefits of Lead Scoring
Lead scoring is a powerful tool for your sales and marketing teams to make the most of their resources. Ultimately, it helps you spend your time on better leads so that you can gain more revenue, faster.
1. Improves efficiency and productivity of sales teams
Lead scoring allows you to quickly prioritize leads based on criteria you’ve agreed upon with your team. A solid lead-scoring process also makes sure you’re getting the right contacts at your prospective customer companies, meaning your sales team isn’t wasting time chasing down that right person to influence the purchase. When your salespeople have more time to reach out to the people who you’re confident are closer to buying, you can reduce buying cycles and improve close rates. In fact, Marketo’s Definitive Guide to Lead Scoring notes that even just a 10% increase in lead quality can equal a 40% increase in sales productivity.
2. Faster revenue growth
When you’re spending more time with sales qualified leads that have an overall higher buying potential, you can increase your conversion rates, generating new revenue at a higher rate. Creating a solid, reliable pipeline of quality leads also means you can better direct your resources toward channels that are already proven to more efficiently generate revenue. You’ll also mitigate the risk of losing revenue by dropping prospects since your buying cycle will be shorter and more efficient.
3. More effective marketing campaigns
The process of creating a lead-scoring methodology involves deeply understanding who your ideal prospects are and what most influences them to buy (more on this below). With this in mind, you can create campaigns that you already know deliver value to your prospects by repeating patterns that have proven to be effective.
Lead scoring also helps you segment your leads based on both demographic characteristics and behaviors that you deem a good fit for your customer base. This allows you to create separate, highly specific campaigns on different segments. This way, you can deliver the most value to each type of prospect. More tailored campaigns deliver five to eight times higher ROI.
4. Better alignment across teams
Lead scoring helps close the gap between sales and marketing teams by setting expectations, improving the handoff process, and opening the ever-important lines of communication. When sales and marketing teams aren’t aligned, efforts can be duplicated, miscommunications can happen, and frustrations can arise—all resulting in poor performance and wasted time and resources. Sales ignore up to 80% of leads sent by the marketing team. Overall, companies waste around $1 trillion annually due to misalignment between sales and marketing departments.
When everyone agrees on what makes a quality lead (and has a voice in the discussion), marketing knows exactly how to find sales-worthy leads, and sales knows how to provide constructive feedback that helps further improve the process. Plus, when everyone’s roles and expectations are clear, they can focus on new ideas and optimization, and not the headache of miscommunication.
How to Build and Optimize a Lead-Scoring Model
1. Begin collecting data to identify patterns
The process of choosing attributes and assigning scores hinges on the integrity of your data. The work you do up front to ensure rich, accurate data is a crucial foundation to be able to later identify patterns and validate your assumptions.
You’ll first want to make sure you’re collecting important data up front for anyone entering your CRM. Use lead forms to capture basic demographic information, such as their name, email, title, company, and whatever else you deem appropriate based on what you understand about your prospects.
Tip: Make sure your form fields are standardized from the start! Wherever possible, use a dropdown list instead of relying on user-submitted information. Titles, for example, have so many iterations of the same thing, and that doesn’t even account for possible misspellings! Variations add up and can make analysis a pain in the future.
In addition to gathering data from incoming leads, dive into your customer data and try to recognize behavioral patterns. If possible, talk with your customers directly. Ask them what their pains were before buying and what they felt was most valuable to them during their journey.
Another great resource is your sales team. Take the time to sit down with them and ask what, in their experience, helped move the needle to closed/won deals. Which types of prospects show less friction in the buying process? The goal here is to make life easier for your teams by seeking out leads that are urgent. If you can solve their problem and move things along quickly, these leads will find value in your solution and remain customers for longer.
2. Determine which demographics and behaviors are best for your business
Once you’ve gathered data from your leads, customers, and sales team, try to identify patterns in both the types of prospects that are most valuable to you as well as the behaviors that signal intent to buy. For this step, you’ll want to look at the demographic attributes of a prospect, as well as their behavior. These are what you will be basing your scores on, so make sure to choose based on what you’ve seen makes a quality lead!
While the attributes you’ll use for scoring will be specific to your company, some common demographic characteristics are:
- Title: Who, ideally, will you be selling to? Based on your research, you should have a good idea of who will resonate with your solution the most. Depending on your solution, this could also be whoever has access to budget, or is the main decision-maker. If your product is particularly expensive or technical, you may be talking to multiple people at a company. More ideal titles should have a higher score.
- Email: Is the submission from a corporate or personal email? Often, emails with corporate domains are more valuable than, say, a Gmail or Yahoo! account.
- Company: Ideally, you have a list of target customers. Any prospect from this list (or a lookalike list) should rank highly. Information such as industry can also help you prioritize prospects that may be a better fit.
- Location: Is your solution only available in certain countries? Language limitations, local regulations, and market potential are all factors that can affect how you score.
- Size: Not only does a company’s size indicate buying power, but it can also give you insight into whether or not they have a need for your solution. They may be so large that they have a full-time team that serves the same purpose as your solution. Conversely, they may be too small and not yet ready for your services.
The more specific you can get with your demographic fits, the easier it is to prioritize (and score) your leads. Often, it can be tougher to source lead information with a simple online search. If you find you’re often met with scarce data, consider investing in a tool such as ZoomInfo, which can automatically pull in demographic information to a high degree of accuracy. (Read more about automation in Step 6).
If software like this is not in your budget, consider sponsoring a smaller conference targeted at your profile customer. Often, event sponsors will receive a list of prospects as part of their package with a wealth of important lead information. This is more favorable than simply purchasing a lead list as you have a common touchpoint—the event—to connect over during an initial reachout.
While who your prospects are is very important, you’ll also want to score leads based on their behavior and engagement score. Behavioral attributes help you discern whether a prospect has a specific pain that your company can solve for.
Behavioral attributes may include:
- Downloading a resource such as a whitepaper, checklist, or e-book.
- Attending a webinar
- Visiting certain web pages
- Signing up for a trial
- Engaging in an email campaign
- Lead source
Scoring based on behavior is more complicated, especially in B2B lead scoring. Someone’s title and company size, for example, is pretty straightforward. Lead behaviors, however, fluctuate and can be trickier to track. The key here is to choose behaviors that signal intent to buy. Quickly opening an email shows a different level of intent than, say, looking at your pricing packages.
3. Assign scores
Which attributes you choose to score can be as unique to you as how you score them. Many companies scale their leads from 1-100, but ultimately you can choose what best serves your team. Choose the demographic and behavioral attributes that matter most to your company and score accordingly.
One method to determine the numerical scores is to find your overall close rate and compare that to the close rate of each of your chosen attributes (titles, time spent on page, etc.). The higher the close rate, the higher the score. That way, with each new lead that comes in, you’re assigning points based on their likelihood to close. Remember: the first iteration of your lead-scoring system is not going to be perfect. Play around with how you score behaviors and assess what makes the most sense!
As you collect more data on each lead, you’ll want to use negative scoring to subtract points from leads that don’t fit your ideal profile. This may mean assigning negative points for entry-level titles, email unsubscribes, unengaged time, or emails that resemble spam.
Once you’ve assigned scores to the attributes you’ve chosen, test your framework on current customers and leads that you already know are a fit. Does your scoring system accurately reflect what is a good lead? If you analyze their past behaviors and demographics and they don’t even meet the SDR-ready threshold, you may want to adjust your scoring.
4. Agree on your SDR-ready score
Once you’ve created a scoring scale, it’s time to decide the score at which a lead is passed from marketing over to sales. This is your SDR-ready score. The exact score will depend on what your score range is, as well as what you’ve determined is the right point for a lead to move over to sales. Ideally, any lead that hits this score should have a 10-15% close rate.
Once you’ve decided on your SDR-ready score, stress test it to make sure it’s best serving your team. Temporarily lowering the score will introduce sales a little earlier in the lead’s journey, which could potentially reduce the sales cycle even further. If you’re finding your sales team is having a hard time keeping up with their pipeline, or they report that leads are consistently less ready to buy than anticipated, consider raising your threshold.
5. Communicate and refine your scoring strategy
Once you get your lead-scoring process in motion, don’t stop there! This is an ongoing, dynamic strategy that will grow and scale with your company. Check in frequently with your sales teams; do they feel like their pipeline is full without overwhelming them? Do they feel like the leads they’re getting are still good quality? On the marketing side, make sure to audit any materials used in drip campaigns. If many prospects seem to get stuck in a specific score range, look for ways to encourage them along.
Additionally, you’ll want to make sure you are seeing tangible growth. Ideally, the number of leads you send to your sales team should decrease, while the number accepted by sales and your win rate should increase. Regularly meet with your teams to assess your progress and make changes as needed.
6. Automate and supplement your lead-scoring process
As your company matures, you’ll want to begin supplementing your sales and marketing teams with automation and other data management tools. Consider investing in sales tools that automatically fill in certain demographic information. These tools can eliminate the need for lengthy form fields and allow you to focus on analyzing behavior. In fact, shortening your form fields can increase conversion by 30% or more, further increasing your sales efficiency.
If, up until this point, you’ve been using several different tools to track your sales and marketing data, it might be time to find a solution that meets the needs of both teams. Not only do disparate tools make it difficult to track leads, but it also wastes valuable time pulling together data from all over your organization. Tools such as Improvado can serve as a single source of truth for all your marketing data, eliminating the need for cumbersome back-and-forth.
Lead-Scoring Strategies for Each Stage of a Company’s Development
Lead-scoring methodology for early-stage companies
In the early stages of your company, you’ll be focusing on finding your product-market fit. Your lead volume will be relatively low, so the need to prioritize and filter leads won’t be as important. To keep leads engaged, a single drip campaign will do.
However, this is a great time to begin gathering important data points that will serve you as you scale. As discussed above, the integrity and richness of your data will have a huge bearing on the success of your lead-scoring framework. Creating a system to gather important data up front will set you up well as you implement a more complicated lead-scoring system in the future. Begin to track user actions and see which lead actions make them most likely to convert.
Lead scoring for growth-stage companies
Once you enter the growth stage, you can begin to implement an early lead-scoring process. Using the processes above, you can start testing what works for you and segmenting your prospects. You’ll want to begin using lead scoring to distinguish who has urgency and needs your solution, and who is simply learning more and needs to be nurtured. With this data, you can allocate marketing and sales resources to the channels with the highest ROI.
In the growth stage, you can also begin to tailor your communication to differently scored leads. Instead of a simple drip campaign, you can begin to customize communication around different lead types based on what you know will provide the highest level of value and be the most compelling for each segment. This can be both for different behaviors as well as the different types of prospects you’ve been identifying.
Lead scoring as your company matures
By the time your company has entered the mature stage, you can begin using all your data to enrich your lead-scoring process with more pattern analysis, data, and even automation. At this point, your marketing materials should be highly segmented, appealing to each vertical, profile, and buying journey.
Common Lead-Scoring Mistakes
With all of the moving parts involved in lead scoring, it can be tempting to implement everything at once. Be aware of a few common mistakes before you start, so that you set yourself up to be in the best shape you can!
1. Implementing a one-size-fits-all approach
What works for one company may not work for yours. Creating a lead-scoring process without taking into account your company’s specific needs or historical data will only burden your teams with an ineffective process. Take the time to understand your data up front so that you can enjoy the benefits listed above.
2. Setting your first iteration in stone
The lead-scoring process is all about trial and error; don’t fret if you don’t get it right on your first try. Don’t get discouraged if you don’t see the results. What isn’t working for your company can be just as informative as the wins.
3. Scoring trivial actions too highly
Be careful not to put too much importance on trivial actions, such as email opens, that can overinflate a lead score and make a lead appear to be a better fit than it really is. Choose to score behaviors that clearly demonstrate an intent to buy. Use additional marketing efforts to encourage prospects to take those high-intent actions.
4. Overinflating scores for high-ranking titles
The CEO of a company might not be your best bet. Make sure you’re prioritizing people who are going to be champions for making a purchase; that is, those whose lives you’re seeking to make easier. Seniority does not always equal influence.
5. Neglecting to analyze content in general
Perhaps you’re seeing a low CTR for marketing materials in certain segments. In addition to wondering whether it resonates with your audience, don’t forget to question whether the content is potentially lacking in value overall or is improperly differentiated from your competition.
6. Relying too heavily on gut feelings instead of statistics
While what you have observed and think are important data points is a great launching point, make sure that your hypotheses are backed by data. Your idea of who is resonating with your marketing might be a different story once they get on the phone with sales.
As your company continues to grow and garner new leads, it’s up to your sales and marketing teams to establish an effective lead-scoring strategy. With this system in place, you can have confidence in your pipeline as you drive growth with high-quality leads who are ready to invest in a solution like yours!
Whether you’re just starting out with your lead-scoring model or simply looking to improve your strategy, the team at Improvado can help. Relying on clean data, the marketing and sales team can make better, more informed scoring decisions.