The behavior of today’s buyers has changed. Your prospects resort to online channels to research your offerings, find out about the best practices of your industry and skim through thought leadership, before making a purchase. To get them to pick your brand, you’ll need to engage them early in the buying process. However, engagement costs money; you need to be selective and pursue prospects that’ll prove to be profitable in the long run. This is where lead scoring comes into the picture.
Defining Lead Scoring and its Types
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.
Explicit lead scoring is based on information that is either observable or shared with you via online forms or during the registration process. For the demographics aspect of this scoring method, marketers consider demographic and firmographic attributes such as job title, company size and industry. As a result, they can determine how a prospect compares against their persona of an ideal buyer. As for behaviors, BANT (Budget, Authority, Need and Timeline) attributes are analyzed to assess sales readiness.
- Budget: Analyzing the budget allows you to determine whether or not the prospect can afford your offerings. It also helps you identify individuals who may be willing to spend generously.
- Authority: Each business has different types of authority: decision makers, influencers and end users. You’ll need to know which of these you’re addressing, before investing time on winning them over.
- Need: Find out whether your prospects need what you’re offering. You should especially focus on identifying what drives their need and market accordingly.
- Timeline: The timeline defines when the prospect will be ready to buy from you, be it prior to a large event, or simply around the time budgets are allocated at year-end.
However, your prospects may not share this information right away, which is why you need to use implicit scoring as well. By definition, implicit scoring entails tracking your prospects’ behaviors to determine how interested they are in your products or solutions. For instance, opened emails, responses to offers and completed forms may be signs of your prospects’ readiness for a sales pitch. As for the demographics attributes, these include inferred geography, data quality factors, etc. collected via tools on your website.
The Importance of Lead Nurturing
According to HubSpot’s survey in 2013, 67% of marketers think that lead scoring plays a fundamental role when it comes to reaching their marketing goals.International marketers agree as well, with 75% of them considering lead scoring important, while 41% believe that lead scoring is of utmost importance. However, lead scoring wouldn’t have such a high approval rate, if it wasn’t for successful lead nurturing.
While lead nurturing and lead scoring aren’t necessarily dependent on one another, the surveys show that B2B businesses which implement both, have a higher rate of success when it comes to closing deals. Lead nurturing is a way to keep your potential buyers engaged, by delivering content which is sufficiently valuable and which matches their interest. Through the different marketing channels, you will be able to build a relationship with a lead, long before scoring, which will stay active until he’s ready to buy. Here are some of the key benefits of using lead nurturing:
Converting the marketing leads into sales
According to MarketingSherpa, only 21% of marketing leads convert into sales. The reason for this poor performance is that the leads haven’t been nurtured enough sending them through the next steps.
Ensuring that the leads are valid before being passed to sales
If the leads aren’t nurtured enough, you will fail to understand their business and their needs, since you didn’t spend any time on building a connection with them or keeping them invested in your brand; not knowing your leads makes a dent in your business. MarketingSherpa says that because 61% of B2B marketers send their leads to Sales, without having any built foundation, a whopping 73% of those leads prove to be unqualified. On the same note, only 56% of B2B companies actually verify their business leads before sending them to Sales.
Generating more sales
Lead nurturing, as well as lead scoring, have a poor establishment percentage among B2B marketers (35% and 21%, respectively), despite being the lifeblood of such businesses. Statistics show that nurtured leads are 20% more likely to materialize the sale opportunity than non-nurtured ones. The Annuitas Group says that nurtured leads also make 47% bigger purchases than the non-nurtured.
Lowering your costs
The Forrester Research surveys claim that effective lead nurturing not only boosts considerably the leads which are sales-ready, generating 50% more, but they also reduce the costs significantly, with 33%.
Increasing the email response rate
In comparison to standard emails, the response rate of personalized (nurtured) emails is highly encouraging (up to 10 times more). Such emails also manage to generate 5% more CTR than the non-nurtured ones. When it comes to unsubscribe rates, lead-nurtured emails are in fact 0.5% higher – but this is a positive result, because it means that you are less likely to have leads which are not recommended for your B2B, thus saving you time and money.
Should You Start Lead Scoring as Well?
Lead scoring can easily be integrated into your automated marketing system, CRM, email marketing efforts, content personalization and business directory. However, there’s a reason only 21% of B2B marketers have established their own lead scoring program: it’s not for everyone. Yes, the benefits you’ve just read may be tempting, but there are times when implementing lead scoring is a big waste of time.
To determine whether lead scoring should be part of your lead management strategy, ask yourself the following three questions:
#1) Does the Sales Team Have Enough Leads?
You won’t need to worry about lead scoring if your sales team is effectively managing the leads you’re providing. In fact, if that would be the case, it means you haven’t been providing enough leads for your sales team in the first place. Therefore, until you have too many leads and can no longer touch base with all of them, lead scoring shouldn’t be on your agenda. Instead, focus on generating more leads through analyzing your traffic and visitor-to-lead conversion rates.
#2) Is Your Sales Team Calling ALL the Leads You’re Sending Through?
If your sales team has been complaining about the leads you’ve generated and is hesitating to call them, lead scoring won’t help. Your problems may be running deeper than you expected. There’s a big chance that the sales and marketing teams aren’t aligned, in which case your lead scoring efforts will go to waste. After all, how can you expect them to trust the score you provide, if they don’t like the leads themselves? Therefore, consider having a heart-to-heart with the people in sales, to solve the underlying issues.
#3) Do You Have Enough Data?
You’ll need behavior and demographic data in order to carry out lead scoring. Without these, you won’t be able to accurately assess the readiness of your leads and may end up failing to convert them. Therefore, you should focus on improving your conversion forms with the help of your sales team. That way, you can discover which data they need to follow up on leads. You may also need to use a marketing analytics and a lead management system to gather data automatically.
To sum it up, be selective when it comes to engaging your prospects and choose only those that line up with your brand’s identity. Keep in mind that ‘the more, the better’ is a philosophy that can make you lose time and money – it’s all about pursuing the right buyers for your business. Figure out if your marketing system is prepared for lead scoring and if yes, combine it with lead nurturing for a higher sales rate and a cost-effective strategy (click here for a lead scoring strategy), to maximize the revenue.