Lead scoring, a methodology which both sales and marketing teams rely on, is used for ranking leads based on their readiness for sale. Basically, it’s a system that allows you to determine whether a lead is going to move to sales or if it requires more nurturing. You can assign points or letters to denote rankings, or use terms such as ‘hot’, ‘warm’ or ‘cold’. However, to designate these ranks, marketers resort to two types of scoring: implicit lead scoring and explicit lead scoring. Both of these take into consideration behaviors and demographics, but in different ways.
After understanding the concept of lead scoring, it’s time for you to establish your own strategy. Here are the steps you can confidently follow to be successful.
Step #1) Make Sure Your Lead Scoring Team is Ready
Contrary to what some experts believe, lead scoring is an activity where sales and marketing should collaborate to ensure its success. Hence, create a team that comprises equally of sales and marketing personnel, so that both can share their insights and determine the traits defining ideal prospects. Remember to pick your team wisely, since its members will be meeting regularly to assess results, provide feedback and carry out necessary improvements.
Step #2) Define the Criteria You’ll Use for Ranking Leads
Study historical deal data and existing sales data to identify traits associated with closed deals, as well as those with transactions that either fall through or take a much longer time than expected. You should also have your marketing automation and website analytics data in hand, as they provide you with behavioral attributes such as which pages appeal most to your clients, what content they download the most, and which forms they’ll happily fill out. The key to successfully tackling this messy task is to start simple and identify a few key indicators of success or failure, rather than starting with a large amount of data points.
Step #3) Establish a Scoring System
After collecting and analyzing your data, it’s time for you to create your own lead scoring strategy. Use the following steps to get started.
- Decide Which Criteria Matter the Most – You may have a lot of scoring criteria on mind, but some may be far more important than the rest. For instance, viewing a video on your product is more valuable than just visiting your site’s home page. Similarly, a Fortune 500 visitor is a better prospect than one from an unknown company.
- Clearly Mention Which Criteria Doesn’t Matter – You’ll need to determine criteria for less qualified and useless leads as well. For instance, a software provider’s sales team can pursue the interest expressed by a system administrator, but choose to keep a sales engineer as a last option. Establishing criteria for prospects less likely to buy will help both sales and marketing save their time and effort, especially if the teams have new members. Better yet, consider embracing the concept of negative scoring. For instance, if a CEO is spending time on your white papers and viewing your demo videos, you’ll need to subtract his points because he’s outside your target market and ultimately an unlikely prospect.
- Establish Scoring Thresholds – Decide how to segment your leads based on scores. Be it through letter grades, points, or the ‘hot-warm-cold’ grouping, establish thresholds for others to know the precise difference between each rank. This may be a tough process at first and you may need to tweak it regularly, but you’ll have enough time to experiment as long as your lead scoring team members work together smoothly.
Step #4) Create an Action Plan
Taking action based on lead scores would mean sending ‘hot’ leads to the sales team and discarding ‘cold’ leads. However, you need to do more than that. First off, you need to define the process for delivering top ranking leads to sales representatives. Determine how quickly the leads should reach, who should approve and route them, how to transfer leads to the sales pipeline, as well as other technical issues. Next, define the process for ‘warm’ leads. The best solution for these is sending them to a nurturing program that engages and prepares them for sales in the future.
Finally, establish a policy for dealing with ‘cold’ leads. If you don’t believe that engaging them on any level is possible, create a plan to properly discard them. For example, you can stow them away in a database if you think they’ll offer 10% value or simply hand them over to another company that may be interested in having this type of leads.
Step #5) Track Your Progress
In order to join the ranks of successful companies, you should always set some time for testing your lead scoring models. The best way of doing so is by comparing them to your actual results. For example, track the behavior of your ‘hot’ prospects to see if they’re contributing to more closed deals. If you do spot a problem, communicate its details to your lead scoring team immediately to correct it. Another way to track your progress is by reviewing data from your marketing and sales automation systems, to find patterns indicating the success of your strategy. To be very thorough, define metrics which you can use to measure the ROI of your lead scoring program. That way, you’ll be in a better position to prove just how effective your efforts have been.
Step #6) Refine Your Strategy
Don’t expect your current strategy to remain the same, especially if the testing phase uncovers discrepancies. Even if you don’t notice any issues, never be afraid to experiment, to further improve it. After all, you’ll need to abandon some old assumptions you’ve made in the past, to match the constant changes taking place in your market.
In a nutshell, if your business is ready for lead scoring, don’t hesitate to implement this strategy after perfecting it. You should especially take this opportunity to bridge the gaps between sales and marketing and to establish a robust lead nurturing strategy. With these in place, you’ll be prepared to see higher conversion rates, higher ROI and more revenue.