Wouldn’t it be great if all the leads in your email list convert into paying customers?
That would be a dream come true. After all, that’s why you’re generating leads. No leads mean no people to convert into customers. And no customers means no profit.
Generating leads isn’t enough.
According to the HubSpot’s State of Inbound report, the most important priority businesses have isn’t lead generation. Rather, it’s being able to convert these leads into customers.
Inbound marketing does a terrific job in helping you generate leads. Unfortunately, not all of these leads will become your customers. In fact, a study by Marketing Sherpa states that only 27% of the leads your marketing team hands over to your sales team are qualified leads.
What does this mean?
It means your a percentage of your sales team’s time is wasted engaging with leads who’ll never become your customers.
When marketing your business, it isn’t enough just to build a massive email list. You also have to make sure that your leads are qualified to purchase the product or service you’re offering.
This is where lead scoring can help.
What is lead scoring?
Lead scoring is the process of assigning each of your leads a score. The score is based on who they are, how they interact with your business, and how likely they’re going to convert into a customer.
By reviewing the past behaviors and other characteristics of your customers, you learn who in your email list your sales team should focus their efforts.
Benefits of scoring your leads
When you use lead scoring to create your lead nurturing campaigns, it can help you increase your lead-to-customer conversion rates.
You can also determine which stage of your marketing funnel needs more nurturing. That way, you can map your content properly so they’ll convert more quickly.
Lead scoring pinpoints leads who are genuinely interested in your business’ product. It also tells you if they can afford it.
More important, lead scoring tells you which leads are ready to buy your product. They can then forward these to your sales team. Now, your sales reps can focus all their time and effort on leads that need just that extra push to make a purchase.
Other benefits include shortening your sales cycle and increasing your business’ ROI.
This infographic published by DemanGen Report details all the benefits businesses can get from lead scoring.
Types of lead scoring
There are three kinds of lead scoring used by businesses to help them determine if a prospect is someone that they can convert into a customer.
Explicit lead scoring
There are two different types of data used in explicit lead scoring: demographic and firmographic information, and BANT information.
Demographic and firmographic information
These are the details that your prospects share with you when they fill up one of your opt-in forms such as:
- size of the company,
- their position,
- what department are they from,
- what industry is the company a part of, and
- their geographic location.
Explicit lead scoring is crucial because it helps you compare your leads against your buyer persona. The higher the explicit lead score, the more closely they resemble your buyer persona. These are the leads you should focus your attention.
But that’s only part of the equation. Your marketing team also needs to know if these leads can buy your product or service. Even if they’re interested, if they can’t afford your price, they still won’t convert.
For this, you’ll need to find out and score their BANT attributes.
BANT is an acronym that helps your marketing team determine whether or not a lead is sales-ready.
- Budget. This shows you whether your lead can afford your asking price. If you’re targeting individual customers, you can determine this through their annual salary. On the other hand, asking the department budget will be most helpful here if you’re running a B2B business.
- Authority. You need to be sure your lead has the authority to decide whether or not to make a purchase. This is particularly important when targeting other companies
- Need. This is not a matter of whether they need your product or not. Instead, it tells you how urgently do they need it.
- Timeline. This attribute ties back to the level of need your prospects have towards your product. The more urgent the need, the less convincing they will need and the shorter the sales cycle. On the other hand, if your prospect doesn’t find the need urgent, you can expect that a longer sales cycle.
Implicit lead scoring
Implicit lead scoring is more tricky to determine than explicit lead scoring. That’s because this measures how your prospects interact with your business online, whether on your website, social media or email.
There are two sets of criteria to consider with this lead scoring. The first are those that pinpoint your lead’s online buying behaviors. To be more specific, they tell you whether they’re interested or not.
The second set of criteria focus on their engagement levels. Just because they’ve signed up for one of your content offers doesn’t mean that they’re interested in buying. It may be that they’re just after getting free valuable content. So your sales and marketing teams should decide which types of engagement are those that can best tell you whether or not they’re considering your product or service.
Data quality scoring
One of the biggest mistakes that businesses make in lead scoring is not taking the time to consider the quality of data their leads provide. As a result, your marketing team may still be handing over leads to your sales team that they can’t convert into leads.
To score or not to score.
Just because lead scoring helps qualify your leads doesn’t mean that everyone has to do it.
Yes, you read that right.
In fact, there are some cases where lead scoring could actually deter your ability to convert your leads into customers.
That said, you first need to figure out whether you need to start scoring your leads. Here are some of the signals to look for within your startup’s lead generation and nurturing activities.
1. Generating leads isn’t an issue.
If your lead generation strategies are generating lots of leads, it’s a good sign to start scoring your leads. That way, your marketing team can quickly segment your list so that they can weed out those that have the potential to convert into your customers.
2. You’re targeting other companies.
Account-based marketing, or ABM, is commonly used by B2B businesses. Rather than targeting as many potential leads as possible, startups using an ABM strategy selectively target companies that they see would most benefit from their products or services.
The challenge when targeting companies is that more than one person is making the buying decisions. B2B marketers need to convince, on average, 6 key decision-makers. Including a Job Title field in their opt-in forms will help them determine if their content is attracting the right people within the company.
Lead scoring will work to your advantage in cases like this because you can assign a value based on the position they hold in their company and the amount of influence they have in their decision-making processes.
3. Your sales team is getting a lot of unqualified leads.
When the number of your sales reps’ closed deals are significantly disproportionate to the number of leads your marketing team feeds them, lead scoring may help in closing that gap.
But first, make sure that your sales and marketing teams are aligned with each other. That’s because an inadequate number of qualified leads can also be a sign that your sales and marketing teams don’t agree on what they would consider a qualified lead.
First, try to resolve this matter by aligning your sales and marketing teams. If after doing this, your sales team’s output still hasn’t improved should you consider doing lead scoring.
4. Your competitors are stealing your leads.
Timing is everything, especially when converting your leads into customers. Your sales team must be able to engage with your leads the moment that they reach out to you because they’re ready to buy. If they don’t hear back, they won’t hesitate to move on and buy from one of your competitors.
Lead scoring can help you pinpoint which of your leads are hot and sales-ready. That way, your sales rep can engage with them right away and close the deal.
5. Your startup’s at the growth or mature stage.
Startups that are either in the growth or mature stage are those that already have enough customers for them to generate revenues from the sales they’ve produced to cover their operating expenses. Having that many customers mean that you not only have a significant amount of leads in your email list but also have sufficient data to identify patterns on how your leads convert into customers.
Creating your lead scoring system
Now that you’ve determined that lead scoring is something that you need to start doing to generate more qualified leads for your sales team to convert, it’s time to set up your lead scoring system.
Step #1: Make sure that your sales and marketing teams are aligned.
As I explained earlier, your sales and marketing teams should always be on the same page when you’re doing lead scoring. They need to agree which demographics, online behaviors, and email engagement to monitor and score.
Step #2: Set your point values.
Once your sales and marketing teams have determined which characteristics and behaviors they should be tracking, the next step is to begin assigning the point values for each.
While there are different ways you can score your leads, I suggest sticking to using values between 0-100. Not only would this be easier for your teams to understand but these will also come in handy when you automate your lead scoring.
From there, you’ll then decide the values to assign for each of the characteristics and behaviors exhibited by your leads.
Here are the most common behaviors and actions considered when calculating a lead’s score.
Stages within the marketing funnel.
There are two stages within your marketing funnel where you’ll focus your lead scoring: the Awareness stage and the Consideration Stage.
Since the Awareness stage is where the majority of your leads first enter, the value of the points awarded to leads in this stage is low. Among the behaviors and activities that you can allocate lead points to at the Awareness stage are when:
- They download a content offer
- They sign up for your newsletter
- They follow your social media accounts
Point values in the Consideration stage are slightly higher because this is where your leads begin shortlisting potential companies that they would like to do business with. Among the areas that you’d want to assign the highest points to are when:
- They sign up for a webinar
- They requested for a demo, a free trial or a free account
- They’ve engaged on your website’s live chat
Forms they’ve filled out.
The further down in your marketing funnel your form is located, the higher the point value you should assign to this. For example, filling out a form to attend one of your webinars should be given a higher value than a form to download a cheat sheet or resource guide.
Also, take note of what fields they fill up in your forms, especially if you included optional fields. Leads that fill up these optional fields should be awarded extra points compared to those that only fill up the mandatory fields.
The web pages they visit
There are two things to consider here. The first is how many pages does your lead visit each time that they return to your website.
For this, you can use a 3-tiered system where you assign a specific point value for a particular range. The more pages they visit on your website, the higher the point they receive.
The second thing to consider is which of your web pages do they visit on your site. The two pages on your site that should be given the highest point values are your features or services page and your pricing page. These are the two pages that a lead that is seriously considering to make a purchase would often visit.
Engagement on social media
How your leads engage with your startup on different social media channels is also a crucial factor to consider.
Some of your leads may not be clicking on the links in your emails, but they are doing so on Facebook or LinkedIn.
They also may be trying to engage with you through a messenger app rather than sending you an email through your contact page or live chat.
You also need to take into account whether talking about your brand or products on social media. For example, if your lead is posting questions on Facebook groups or pages asking for feedback about your product, this is a sign that they’re considering on purchasing your product.
In fact, this is one of the criteria that should be given the highest point value so your sales team can immediately jump in and engage with them. Otherwise, you risk the possibility of one of your competitors trying to sway them over to their direction.Wishpond’s Behavior Starter Guide is a good example showing how much points you should allocate for these different areas:
Step #3: Assign point deductions
Earlier, I mentioned that not all of the leads in your email list would convert into customers. One reason for this is that they don’t match your target buyer persona. Setting point deductions in your lead scoring model would help you quickly weed out those that aren’t a fit for your business, so they don’t get mistakenly routed to your sales team.
For example, if your definition for a qualified lead is a Marketing Director or CEO of a company within the Business Processing and Outsourcing industry with 300-400 employees, then you should deduct points from those leads that don’t fit this profile.
A decline in engagement with your content is another area to deduct points. If some of your leads are showing a drop in the frequency the open your emails, you should also assign a specific point deduction here as well.
Also, be wary of any spammy leads that may have filled up your opt-in forms and entered your marketing funnel. Some hints to help you detect spam leads are:
- Not capitalizing the first letters of their first and last name
- Filling up fields by typing in four or more letters found side-by-side on your keyboard
If your startup’s targeting businesses as your customers, you may also want to deduct points from leads that opt-in on your forms using a free email account like Gmail or Yahoo.
Step #4: Establishing your lead scoring benchmarks.
Your sales and marketing teams should agree on specific lead score benchmarks for your qualified leads.
Typically, you should have three specific benchmarks:
- Radar benchmark value. This is the minimum score that a good lead should get to be included in your lead nurturing campaign so that they can send them more targeted content.
- Evaluation benchmark value. Leads that earn the agreed score for this are those that your marketing team should begin to research and see if they are a fit for your startup based on your buyer persona.
- Sales-ready benchmark value. Leads that hit this benchmark are now ripe for the picking. They should already be handed over to your sales team for them to connect with and pitch your product or service.
Step #5: Automate lead scoring by creating workflows.
Although you can compute your leads’ score manually, this is an extremely tedious and time-consuming process. It’s also counterintuitive. After all, the main reason you’re scoring your leads is so that you know when it’s the right time for your sales team to reach out and engage with them, right?
A more efficient way to do this is by creating lead scoring workflows. CRM tools like HubSpot allows you to key in your lead scoring criteria and point values.
Once you have set this in place, it will calculate your leads’ score for you based on the actions they take. You can then use this to help you segment your list for your lead nurturing campaigns, and even notify your sales reps when to contact your qualified leads.
Step #6: Monitor and evaluate the results.
Like any marketing technique, you need to schedule periodic checks to your lead scoring system. Not only can you determine whether or not your business is benefitting from your lead scoring efforts, but also evaluate your overall marketing strategy.
For example, if you find that your lead scoring disqualified a lot of the leads in your email list, it’s probable that your content is attracting the wrong audience. Your marketing team may need to re-evaluate and assess your content marketing strategy so that you can capture the right leads.
Perhaps your sales reps are still struggling in converting qualified leads. In which case, you may need to check your implicit and explicit lead scoring to make sure that your timing isn’t off.
As you can see, getting started is the most challenging part of lead scoring because there are so many points you need to consider. That is why before you embark on using lead scoring as part of your lead nurturing strategy, you need first to be sure that this is something that your startup needs to get more qualified leads.
Once everything is in place, however, your marketing team can better evaluate and segment your leads. Your sales team will get more qualified leads. And you will begin reaping the rewards.
This article covers the basics start scoring your leads. However, if you’ll find the process easier with someone guiding you, let me know. I’ll be happy to help you out.