Lead scoring is a system used in marketing to determine the quality of potential customers or leads, by assigning values to them based on their response or interest in a particular service or product.
The "value" used by each lead differs from organization to organization but it’s typically characterized by consumers interest in the company or buying cycle.
Companies generally attach point-based systems in order to qualify leads or just refer to leads as "warm", "cold" or "hot" dependent on user interaction history.
Does Your Business Need Lead Scoring?
When it comes to lead management and lead scoring, in particular, there isn't a universal method for creating a lead scoring system neither is it compulsory to utilize one.
First of all, you have to decide whether or not your business needs lead scoring and would benefit from it.
A recent study by MarketingSherpa showed that businesses that utilize lead scoring in their lead generation program see a 77% lift in ROI than businesses that do not use lead scoring.
What's more, another survey showed that 66% of the businesses do not possess a lead scoring methodology. This means adopting this practice could give you a huge competitive edge.
If you don’t have any need for acquiring business leads or your sales team won't even reach across to them if acquired, then creating and implementing a lead scoring system is a waste of time.
However, if like numerous B2B and B2C companies you're struggling to manage your leads and are losing potentially profitable customers due to mismanagement, then you need to score your leads.
There is nothing more annoying than chasing cold leads and a major reason for this is that your marketing strategies are attracting the wrong leads.
Do you need help with lead generation and nurturing? Contact our San Diego digital marketing experts, Bloominari.
How to Create a Lead Scoring Model or System:
1. What Criteria makes for a Marketing Qualified Lead (MQL)?
Marketing Qualified Leads (MQL) refer to leads that have a high probability of becoming paying customers based on detailed lead analytics or intelligence.
MQL makes follow-up a lot easier because they have shown a level of commitment and interest in the brand.
The uniqueness of your customer base, sale phases, and main varying attributes are taken into account here. In this step, it’s vital to have insight into your website analytics as well as information on web user’s behavior on your site.
It's important that you keep the criteria to identify a qualified lead between 5 and 6 in number. This will help you focus on detailed specific actions and not numerous actions.
If for instance, 90% of consumers you reached out to living in California responded and subscribed to your email list, imagine how positive your sales report would be if you sent only such leads to sales?
Go through your database and locate common attributes of previously profitable leads and note them down.
2. Set and Assign Point Values
Now that you’re aware of the specific criteria or actions that are unique to qualified leads, you can monitor and look out for such actions in your analytics.
Then run through your user action database and start attaching point values to specific actions based on the degree of influence they have on the quality of a lead. It all boils down to “prioritizing your leads according to the standards that you set,” says Nathan Isaacs.
For example, if users who come to your website all make purchases from a specific page than those who engage with your contact form, then you would assign a high point value to the action of visiting that page and a lower one to the one of the contact form.
You can decide and stick to any ranking system you want but most businesses go for a 0 -100 point system.
3. Determine What Score Makes a Lead Sales-Ready
In order to know when a consumer is a qualified lead, you need to have a predetermined score that they must attain. You can easily set this by going over the scores of your existing customers.
Find out what score they attained before they became a qualified lead, simply put, at what point did they decide to become paying customers.
Do customers with a 75/100 score end up converting? Or do they need to be nurtured some more to 95 before they convert? This is what you must find out.
4. Refine and Tweak Scores
Lead scoring is a continuous process that must be constantly refined to see improvements. You need to set aside time to deeply analyze your scoring system.
Check to see if any low-rated lead action converts or high-rated lead actions flop in the review period.
Then identify new scoring requirements and tweak your point distribution system in order to restrict such scenarios from reoccurring.
It's important to take note of low-scoring leads that convert, because it's a major indicator that your entire scoring system could be wrong. You can use AgileCRM or InfusionSoft (now Keap) to assign scores.
If the majority of your conversions are coming from low-scoring leads, you need to revisit the previous steps and make necessary tweaks to your scoring system, as additional actions of qualified leads were probably missed.
Also, it isn't absurd that some high score leads do not convert. It's common. The end-goal is that you locate all the best leads.
Keep in mind, though, that if a huge number of high-scoring leads convert, then your scoring system is correct.
5. Design Your Flow
After you've tweaked and reviewed your lead scores, you can now start designing your flow. There are different programs you can use for this for automation but one of the best is the dynamic 365 for marketing.
You can get each leads score based on various factors like demographics and behavior details as well as differing actions.
Interactions that you can score include visiting your site, submitting a contract form, engaging an email either by subscription or opening it.
Based on your analytical data gotten from the previous steps you can now begin to create your lead score model.
6. Test Your Model Before Deployment
You need to test your new lead scoring model before using it. This can be done by testing the model on a random customer group from your records or customer database.
It's important to note that though using closed leads is the general rule of thumb, you can still use open sales or even lost sales in your test group.
Once you attach a score to each customer in your record, analyze the number of leads that qualify as sales lead which match that of your system.
However, if the percentage of low-scoring leads were in fact closed sales according to your system then your model needs some more tweaking before deployment.
The main point of testing your model is to ensure that what your system identifies as a high-scoring lead according to your CRM records is truly a high-scoring lead. If this isn't done you could end up chasing low-scoring leads as potential customers which defeats the entire purpose of lead scoring.
7. Test your Model after Deployment
As soon as you've deployed your lead scoring model, you'll start getting new data and this will help you to notice any market change.
It’s important because you could be creating a lead scoring system based on previous data while the market in relation to your niche has transitioned.
So it’s vital to look out for any sudden change in consumer behavior. Asides from this you need to review your system to ensure that high-scoring leads are assigned to the best of leads in the model.
When you are analyzing your lead scoring data, look specifically for leads with high scores that did not show any signs of conversions or behaved like low-scoring leads.
Doing this will help you identify if that particular score has certain mistakes, and if you do find a mistake ensure that it is fixed.
As you test your lead scoring system, you must endeavor to work hand in hand with your sales team, to be certain leads with high scores are the ones qualifying more than the other.
8. Profit From Your Model
Your model will certainly help you focus on the right customers and this will drive in sales. However, you need to review the system from time to time and tweak it based on market changes.
For example, Crowe Horwath, in its first-ever business to business lead management program realized a 133% ROI.
This will cause a higher percentage of closed deals, because you and your team will no longer be chasing every single customer hoping they convert, but you can target specific consumers that will convert. It's hitting the nail on the head.
Due to the number of users surfing the web, there’s a chance you’ll attract unqualified leads. These are people who are just curious about your offer but don’t want to buy now or even in the future.
This is why lead scoring is a brilliant methodology to separate between merely curious customers and interested buyers.
Using your lead scoring model, you would be able to know where to focus your energy and achieve maximum ROI on your lead generation and nurturing investments.