What is lead scoring?

Why lead scoring matters

Today, doing more with less has become a corporate mantra—and the ripple effect of it can be felt at all organizational levels. Consider the demand generated by your marketing group: How do you send all those leads to sales? Most marketing organizations simply hand off huge lists of names—or upload them to the sales database—and then sit back and expect sales to call them. After a few calls, most salespeople give up, deriding the leads as junk. And so the finger pointing begins.

This kind of interaction is counterproductive, causing enormous inefficiencies across an organization’s revenue bearing teams. Sales productivity, in particular, can suffer as your sales reps work furiously to stay afloat while at the same time becoming less efficient in their daily tasks—undermining the goal of doing more with less.

In the meantime, dozens of hot leads—legitimate opportunities—are being thrown away simply because they’re on the bottom of the pile of junk leads. With fewer deals available, your sales reps need every advantage to get in front of active opportunities first, and develop latent opportunities earlier than the competition. To do that, they need to be working with prioritized leads.

Lead scoring enables organizations to move lead prioritization from a largely subjective process to an analytical, scientific approach that can be managed easily and cost effectively. You can help direct the efforts of the sales team in the most efficient and cost-effective way through lead scoring, which prioritizes leads based on prospect profile fit and level of interest.

But the benefits don’t end there. The concept of scoring can be applied throughout the integrated sales and marketing funnel. Forward-thinking companies are applying scoring algorithms to account scoring, opportunity scoring, and other stages in the buyer’s journey. As a result, they’re able to focus their efforts where they’re bound to get the best return.

The evolution of lead scoring

If you ask sales and marketing executives from 100 companies today how they score their leads, 99 of them will answer with the acronym BANT—that is, to qualify opportunities, a lead must have budget, authority, need, and timeline for purchase. This is a common definition developed over the last decade for a qualified lead.

But times have changed. Today, buyers start gathering information long before they have established things such as budget and timeline. They download technical briefs and case studies, connect with peers to validate their observations, and turn to social media to crowdsource experience.

And for the most part, salespeople have no visibility into these behaviors.

To keep pace with the changing buying process, advanced lead scoring systems use a wide range of data points to determine lead quality. Although explicit criteria, such as job title, company revenue, and industry may suggest a good fit, it’s the implicit behavioral information that is key to determining true buying interest.

This digital body language reveals much about a lead’s level of interest in your company. However, the growing trend is to focus on behavior—how frequently a prospect interacts with your company and content. Because this behavior often serves as a more powerful indicator than inaccurate data collected over the phone or on a website.

Understanding lead scoring

Lead scoring is more than just a means for ranking leads. It is a contract between sales and marketing—a mutually agreed-upon process for defining lead quality, sales follow-up, and cross-departmental collaboration. By collaboratively developing a lead scoring model, your marketing and sales teams can arrive at a common definition of what constitutes a hot lead. It also enables your organization to develop a lead-ranking system that prioritizes quality interactions or activities that demonstrate high prospect interest.

With a clear definition of what constitutes a priority lead, the discussion can then progress to which leads should be passed from marketing to sales, and which should be nurtured further. When leads sent to sales have an objective quality rating, it becomes easier to measure how good your sales team is at engaging prospects and closing business.

Moreover, an established lead scoring practice gives you greater control of your pipeline. The better you measure and understand the quality of your leads, the more predictable your pipeline and revenue forecasts will be. It also becomes easier to see projected shortfalls in revenue by territory, product line, and/or business unit. This allows marketing and sales teams to react appropriately by focusing resources where they will have the biggest impact.

Lead scoring basics

How to create a lead scoring model

• Effective lead scoring combines prospect demographic and behavioral data to prioritize leads. Two of the most commonly used scoring dimensions are:
• Prospect identity: Who the prospect is, signified by explicit data that determines fit, such as title, industry, and company revenues.
• Prospect engagement: How interested the prospect is, indicated by implicit data that determines level of engagement, such as frequent visits to your website and responsiveness to promotions.

Prospect identity

To define the prospect identity part of the lead score you must:

• Determine four to five explicit-data categories to define a sales-ready stage of qualification.
• Define how important these categories are in relationship to one another by assigning a percentage ranking. All percentages should total 100%.
• Assign a tiered set of corresponding criteria values within each category.
• Assign a letter from A to D, with A being the best fit, to indicate how much a lead meets the ranked identity criteria.

Prospect engagement

To determine the engagement score, follow these steps:

• Determine the implicit data categories to define a sales-ready stage of qualification.
• Define how important these categories are in relationship to one another.
• Assign values by weighting actions based on how recently they occurred.
• Assign a value from 1 to 4, with 1 being the most engaged, to indicate how much a lead meets the ranked engagement criteria.

Combining fit and engagement

Create a table that maps out the overall rating of a lead based on the combination of profile fit and engagement level. Profile fit has a range of A to D and engagement has a range of 1 to 4, with A1 being the most qualified and D4 being the least qualified. This will help you visualize the marketing qualified leads.

Map score to action

Once scores have been calculated and a rating assigned, you can determine the correct follow-up action, such as sending the lead to your CRM system for priority follow-up or entering it into your long-term nurturing program.

By splitting the score into two dimensions, your marketing and sales teams will have more insight into the score’s meaning, as well as the approach to be taken with follow-up.

• Split the score
• A to D explicit = profile fit of customer
• 1 to 4 implicit = level of engagement

Lead scoring best practices

When it comes to lead scoring, it’s best to keep it simple, especially at first. Scoring too many criteria can make it difficult to determine which values are actually defining the score. It’s also important to gather a core group of key individuals within sales and marketing to define criteria and business rules and make necessary adjustments each quarter.

The following represent some additional lead-scoring best practices:

• Define what happens with each lead (based on the matrix), from nurturing to sales hand-off. Then consider how lead scoring impacts compensation. If marketing is only measured on the number of inquiries or net-new people in the database, changing behavior to go for more qualified leads might impede achieving other goals.
• Focus on scoring criteria with associated standardized data values. This will facilitate program execution and refinement.
• Define a service-level agreement (SLA) with sales that designates the length of time allowed for follow-up. For example, A1 and B1 leads should be followed up within 24 hours, while A2 to 3 and B2 to 3 leads should be followed up within 48 hours.
• Provide sales with options for follow-up based on lead disposition. These include automated nurture programs that continue to educate the lead until it is again ready for sales.
• Continuously re-evaluate your scoring system. Use direct feedback from key stakeholders to determine whether ratings accurately reflect lead quality. Consider your sales acceptance rate to be the barometer of your scoring program’s health.
• Rate and measure the impact of lead scoring on sales. Conduct a closed deal analysis to uncover insights into conversions and incorporate those discoveries back into the lead-scoring program over time, with the ultimate goal of making your success repeatable.

Lead scoring in action

BMC Software partnered with Oracle’s marketing automation solution to create a robust account-based marketing (ABM) strategy, allowing their marketing teams to engage, score, and convert top-tier accounts.

Dow Jones partnered with Oracle, leveraging Eloqua Marketing Automation to provide essential integration between its sales and marketing tools—scoring leads, sending customer email, and providing clean data.

Mack Trucks execute their marketing campaigns with Eloqua’s lead-scoring model, based on the individual’s engagement with additional high-value content on Mack’s website, as well as an estimate of the person’s purchasing authority, as a result of their title.

Lead scoring roadmap

While it’s important that you improve lead scoring today, you also need to keep your eye on what lies ahead.

Expanding awareness of prospect influences

As prospects receive more and more messages, information, and education through social media during the buying process, these peer channels will continue to grow in relevance. In fact, awareness of how an individual discovered a message, along with where and from whom, will feature prominently in lead scoring and nurturing routines.

Content-based scoring

Companies that regularly refine their scoring models begin to notice patterns in lead quality that can be directly tied to the content accessed during the buying process. Advanced organizations are experimenting with scoring models based on content type—such as technical briefs, product information, and customer testimonials—instead of the download activity itself.

Account-level scoring

Because companies market to individuals but sell to companies, marketers must identify microtrends within a larger set of interests. In the future, marketers will more effectively score leads to pinpoint when a certain role is appearing in the buying cycle.

Customer scoring

To increase customer lifetime value, you need to seize opportunities for up- and cross-selling. That means you must understand when someone is in the cycle for a new product in your suite and determine when a prospect or existing customer has switched midstream and is interested in a different product. Going forward, smart marketers will analyze all customer touchpoints to identify opportunities and risk throughout the lifecycle.

Opportunity scoring

Top marketers will analyze behavior of a lead all the way through the middle of the pipeline to predict the likelihood of an opportunity closing.

Predicting changes

Your lead scoring model needs to remain closely aligned to your sales and marketing processes, even as they evolve. With predictive-modeling tools, you’ll be able to constantly monitor prospect behavior to understand how your model may have to change.

By objectively ranking sales leads through lead scoring, you can align follow-up with inquiry and identify where each prospect is in the buying process. Lead scoring helps sales focus on the most promising leads and enables marketing to intelligently concentrate its efforts. By following the lead scoring best practices outlined here, you can begin converting more leads and making your sales and marketing teams more productive.