According to studies, 68% of “highly effective and efficient” marketers point to lead scoring as a top revenue contributor.
If your business doesn’t score its leads, it’s missing out on sales opportunities; hindering business growth and limiting your sales team’s productivity.
It’s time to change that. We’ve prepared the ultimate guide to lead scoring. Find out what lead scoring is, which benefits it brings, and how to develop a lead scoring system of your own.
By the end of this article, you'll know:
What is lead scoring?
Lead scoring is the process of using a pre-defined methodology to assign numerical values to leads that enter a sales pipeline to determine their sales-readiness. Leads receive points based on a range of demographic and behavioural characteristics.
There are two types of lead scoring: explicit lead scoring and implicit lead scoring.
Explicit lead scoring is based on the information that a lead tells you directly. For example, the size of their company, their job title, geographic location, age, gender, and company role. On the other hand, implicit lead scoring uses the information you conclude about the prospect when observing their behaviours. For example, how they interact with your website, engage with emails, etc.
To accurately score leads in a sales pipeline and the full picture of their value to your business, you need to use both lead scoring systems together. First, understand what lead scoring is not to make a fair judgement of everything it is…
- It’s not a standalone marketing process. You need considerable sales input to assess leads accurately.
- It’s not a one-size-fits-all approach. Every company must develop their own lead scoring system that fits its specific business workflows.
- It’s not a way to cherry-pick the hottest leads and ignore the rest of the pipeline.
The ultimate goal of lead scoring is to spot the leads with the highest value to the business and focus on them. Lead scoring allows salespeople to identify the leads that are ready for sales soon and those that require more nurturing before making a buying decision.
Overall, lead scoring is a way to categorise leads by their level of commitment.
Why does your business need to score leads?
- Better lead relationships
- Aligned sales and marketing teams
- Effective marketing
- An optimized workload
- An increase in sales productivity and a higher ROI
- A more predictable sales pipeline and more accurate sales forecasts
- A shorter sales cycle
Lead scoring helps understand leads better. By identifying pain points and desires in the lead scoring process, a business is in a better position to build a stronger relationship, make more relevant offers, and build better marketing campaigns to appeal to an audience.
Lead scoring improves productivity too. It promotes collaboration between sales and marketing teams, putting them on the same page. It optimises individual employees workload by assigning a straightforward figure to help understand leads better at a glance. Employees are happier, more productive, and making more money.
How to score leads effectively
There are no two identical businesses, meaning a borrowed lead scoring system won’t help you solve your particular business tasks. To leverage the benefits of lead scoring, you need to develop your own system that would fit the specific needs of your business and its workflows.
Luckily, when you break down the process into steps, it’s not too difficult to create a robust and reliable lead scoring system.
Step 1: Identify buyer personas
It’s not about making wild guesses — all your assumptions must be backed up with data. Before establishing a scoring system, you need to identify the characteristics that your high-value customers have in common. Afterwards, you can assume that these specific traits are what makes a prospect an ideal fit for your business and the products you offer.
When developing a unique, specific lead scoring system, the trick is to start broad before going narrow. That’s why you first need to outline your target market…
- What is the purpose of my company?
- What problems do my company and products help to solve, holistically?
- Who experiences those problems regularly and would engage with my company?
- Who has purchased from me before, and why?
- Who ended up not buying, and why?
- What language/ messaging tone, style, audience, and intent has worked or failed?
With a broad understanding, your business can start focussing on smaller details.
If you take a look at your CRM data, you’ll see that there is a wide variety of leads and customers in there. Some of them actively engage with you, interact with your blog posts and click on your ads, and respond to outreach - but aren’t ready to make a purchase yet. They’re hesitant. They don’t have what it takes to become a loyal customer of yours, so look for those that do.
When you group together all those customers, go through their records and figure out answers to the following five W-questions…
- Who are they? (What they do, how old they are, gender)
- What do they want? (Needs, wants and pain points)
- Why are they interested in you?
- Where are they from? (Geographically and firmographically)
- When do they engage with you the most?
Step 2: Decide assessment criteria
Once you know who’s buying from you, it’s time to differentiate between high-commitment behaviours and low-commitment behaviours. Usually, there are three sets of criteria to consider: Explicit criteria, implicit criteria, and negative criteria.
Explicit criteria is the most straightforward, so we'll start there...
- The size of their customer potential
- Their pipeline stage
- Their deciding authority in a business
- Previous purchases
- Company size
- Job title
All these metrics are the first layer for your scoring system. Measuring them will let you understand whether or not a prospect fits your ICP mold: Do they have the purchasing authority? Is their business big (small) enough to use your product? Is it possible to ship your product to where they are? All good questions answered.
Implicit criteria exposes a lead’s buying intent, outlining how interested they are in your product or business based on their behaviour.
These metrics have nothing to do with uncovering if you and the lead are a match made in heaven. Instead, they simply measure the level of engagement there is between the lead and your content, ads, website…
- Number of phone calls
- Time on page
- Website visits
- Event attendance
- Email interactions
- Live chat interactions
The final chunk of criteria you need to take into account is the negative criteria. These balance out the previous set as they’re just the opposite of implicit criteria.
Negative criteria highlight a lack of interest for your business or your product within your leads. They are important to measure as they let you know which leads will never convert no matter what you do, and allow you to ditch them before you spend too much effort nurturing them...
- Low email open and click-through rate
- Long inactivity periods
- Unsubscribes from previous campaigns
Step 3: Lay down lead scoring rules
Not all the criteria are born equal. Some are positive, some are negative; some have more impact than the rest. For example, leads that subscribe to your blog newsletter aren’t necessarily ready to make a purchase. On the other hand, those that download a whitepaper where you compare your product to the competitors’ products are much more likely to convert sooner.
After picking out the criteria for lead scoring, it’s time to decide the weight of each of them. There are several approaches to assigning point values.
Talk to the sales team to find out what matters most. Sales representatives are the people that interact with leads and customers the most, so they have a pretty good idea of which marketing materials have the most impact on moving leads down the funnel.
Moreover, salespeople are the ones communicating both with those leads that converted and those who didn’t. They can help you identify the causes and early signs of churn.
You could ask customers directly. The only people that know customers and their intents better than salespeople are the customers themselves.
Send out a questionnaire to your existing clients to learn more about their experiences. To get an even better insight, pick out a couple of customers from your customer database and conduct in-depth interviews to find out their opinions regarding the buyer’s journey.
Just make sure you incentivise your customers to help you out and complete the questionnaire — otherwise, there’s a high chance of you not getting enough responses.
Finally, always use sales reports to make data-driven decisions.
NetHunt CRM provides users with an opportunity to generate marketing pipeline reports that show the status of all of your leads within a specific time period, and lead source reports. These reports offer valuable insights into how well each marketing source is performing in terms of generating new leads.
See which campaigns generated the most leads and sales; which communication channels performed best; which sales and marketing strategies delivered the best results.
Don’t only look at the content your leads interact with before they convert into customers. Find out what they engage with when they first enter your sales pipeline too.
Step 4: Decide the score that defines a lead as qualified
Once you assign each data point a score, you simply calculate the sum and that’s your lead’s final score. The end.
Or is it?
A score alone won’t tell you much about your lead’s sales-readiness. You need to determine the range of scores that point out that your lead is ready to buy or needs more nurturing.
Ideally, run a couple of tests to find the right threshold.
And remember: make sure to optimize all your processes. Lead scoring is yet another step of your sales that you can automate with the help of a reliable CRM solution.
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