Lead scoring is a way for sales reps to maximize their time and research. It takes place at the very beginning of the sales process, but is still one of the biggest factors leading sales teams to meet and exceed quotas. After all, efficiency is not something that can be found in the midst of the sales process - it has to begin, well, at the beginning.
One of the biggest wastes of time for any sales rep is reaching out to a contact that has little or no value - in other words, little potential to be sold. Lead scoring is the best way to avoid that scenario. It helps sales reps assure that they're reaching out to contacts that have a high potential of being turned into a revenue-generating client.
What is a lead?
Let's backtrack a bit... A lead is a potential client that has expressed some form of interest in your company - someone that has made a move toward your company and interacted with your company in some (even minor) way.
Lead interactions can take place either online or offline. An online interaction could be a website visit, a blog subscription, or a white paper download. An offline interaction could be a response to a direct mail campaign, or an in-person interaction at an event or trade show.
And while the definition of a lead may sound an awful lot like that of a prospect, the difference is very important.
Leads vs. Prospects
From a sales rep's perspective, leads and prospects are very different. They're at different stages in the sales cycle. A prospect is simply a lead that has expressed further interest in continuing the conversation with your company, beyond their first initial interaction. Leads become prospects.
Consider the following example:
An internet user visits mediaradar.com, reads a blog post about Snapchat advertising, then proceeds to download a white paper to learn more about the topic and the company. At this point, they would be considered a lead.
Once they are a lead, someone from MediaRadar may reach out to that internet user via email, simply to start a conversation. If that contact were to respond to that email, expressing further interest to continue the conversation, and perhaps a business pain-point that can be solved by MediaRadar's product, they would then become a prospect.
From a sales rep's perspective, prospects will always be pursued, where as leads may not be. Leads need to be run through further nurturing before reps fully commit to pursuing them. A prospect's value is much more defined than a lead's. In fact, a lead may not have any value - which is what makes lead scoring an essential task for any sales team with a reasonable inflow of leads.
The Process Begins
When scoring leads, the first thing sales teams need to do is create a lead scoring model. The scoring model should answer two questions about a sales lead:
1. Are they a good fit?
2. Are they engaged with your company?
The more proof that exists proving the two answers above, the higher a lead's score will be.
Typically, a lead scoring model is set on a 0 to 100 scale, with 100 representing the most valuable, most qualified lead - someone that appears to be the most interested in your company, that also fits the mold of a typical customer.
The scoring model essentially ranks a lead based on a combination of their characteristics and actions, as they relate to your company's ideal target market. Those characteristics and actions are the most important part of a lead scoring model, as they are what actually make up the scores.
Furthermore, ranges of scores may be broken out to further qualify the leads in your funnel. For example, you may create ranges based on where a lead sits in the buying cycle - the awareness stage could be leads scored from 1-25, the interest stage could be leads in the 25-50 range, those in the consideration stage could be 51-75, and leads in the 76-100 range would be in the decision stage. Sales teams could also use less formal words for their scoring stages - for example, they could consider leads cold, warm, or hot.
The scoring weight attached to specific characteristics and actions will vary from company to company, but there are a few different ways that all sales teams should score their leads.
4 Ways to Score Your Leads
First and foremost, is the lead the type of person that your company typically looks for? Demographic factors could include age, gender, income, location, family, and so on.
If a lead fits the right personal makeup that your company typically sells to, they'll start off with a higher score. Gender, age, and so on will carry different individual weight, so these factors can be scored separately, and can even be broken down further.
It's also important to note that characteristics (and actions) can add, or even take away points from a lead's score. In this case, if a lead does not meet the ideal demographic makeup of a client, their score will be negatively affected.
While in most cases, personal demographic scoring will be more useful for B2C sellers, they are still important to consider in all scenarios. Regardless of a lead's actions, their demographic makeup could make or break a sale later down the road.
There are also many company-related factors that need to be scored. What industry is your lead in? Is their company the ideal size for your business? Is the company in a location that makes your product or service more attractive to them?
Another factor to consider here is whether your lead is working with a competitor of yours. Does your product fill a void for them, or is it simply an improvement of something they already have?
Company factors will tend to carry more weight for B2B sales teams, but again, should always be considered when building a lead scoring model.
3. Internet Behavior
Once you have scored a lead based on their characteristics, you'll need to look at the actions they've taken, to see just how engaged they already are with your company.
Internet behavior is a very large factor in scoring leads. Internet behaviors might include whether a lead has visited your site, read/subscribed to your blog, downloaded resources (like a trend report or case study), or even requested a demo.
Your sales team can base a scoring model on which of these actions a lead has taken, which combination of these actions they've taken, and the time frame in which they've done so. Perhaps there is a lead that has moved very quickly, from the home page of your website, to a trend report, then through to requesting a demo. Chances are, they are highly engaged, and highly interested in your product or service.
Internet behavior can also include social media behavior. Has your lead interacted with your social media pages? Do they follow your pages? Do they frequently interact with your content? Furthermore, do they follow and interact with other companies that have similar products to yours? And do they interact with content that falls in line with the interests of your existing clients?
4. Email behavior
Lastly, monitoring a lead's email behavior is important in giving them a lead score. Leads may interact with your company without being provoked, but seeing how they respond when they are provoked is also highly valuable.
Scoring a lead's email engagement is a great way to determine their value. You can score everything from open rates, to click rates, and especially replies.
Perhaps a lead has downloaded a white paper, so you decide to send them a follow-up email to further engage them. If they respond, they clearly hold high value as a lead, and potentially as a prospect.
In the end, given the reliance on inferred information when scoring leads, it's always important to test your lead scoring model, and make continuous improvements when necessary. There may be unforeseen or surprising factors that raise or decrease the value of leads, and so implementing proven failures or successes can only help to improve a lead scoring model.