What Does Scoring Leads Mean?
The concept of scoring leads is to analyze potential buyers and how they rank as an ideal customer.
The point values decide whether a lead is ready to buy now or maybe later. The scoring lead model includes three customizable scores that are assigned individually for each of your marketing channels: contact, engagement, conversion.
The three scores allow marketers to identify which marketing and sales channel have generated the most conversions and focus their efforts accordingly. If leads are coming from email marketing, then that becomes your primary target.
In order for a lead to be scored, there needs to be data on them. With lead scoring, customers are segmented into groups based on how much attention they’ve received from the organization. From there, you assign point values based on behavioral data.
For example, less than 100% means leads are not engaged; between 101-125% means you're getting close but still requires touchpoints before becoming a customer; 126%-200% points mean prospects who have bought your product or service, and based on behaviors, would most likely come back.
The metrics used may vary since every business has its own different marketing channels.
Implement a lead scoring process to analyze if prospects are sales-ready and to tailor marketing efforts accordingly.
Lead Scoring System
Lead scoring is a technique that analyzes lead data to determine the best prospects.
Based on the data, it tracks what products and services every lead consumes when they are most likely to buy from you, and if there's any special offer or event coming up which might get them interested in your product.
This approach differs from traditional marketing channels because it targets people who show intent rather than just reach large numbers of people with an ad campaign.
These methods generate leads by reaching out to people who are already interested in a particular product or service.
When you're marketing your company, you want to build the most qualified list of potential customers possible.
The more information they have about what you do and why they should purchase from you, the better chance that lead will convert into leads with an increased conversion rate.
If a business has 100 leads and they want to focus on those that are interested in Product X, they can filter their list by selecting only prospects with sales history for Product X.
This will limit their campaign results based solely on what’s important: who show intent rather than a browser.
The Importance of a Lead Scoring Model
Lead scoring is a critical marketing and sales tool for companies that measure the lead-to-customer process.
The five key benefits of implementing lead scoring models are:
Provides valuable insights into buyer behavior and picks out qualified leads
Tracks which prospects need to be contacted next in order to move them through your sales funnel.
Leads can be scored based on purchase intent or likelihood to buy now.
Correlation between higher scores and increased conversion rates.
Using data from these lead scores helps you understand how customers interact with your business (for instance, where they click) and what content resonates best with them.
Calculate
In order to calculate the lead score, we use a system that is broken down into four main categories: lead generation, lead qualification, lead nurturing and lead scoring.
leads need to generate even more leads in order for them to be qualified;
they must qualify prospects based on purchase intent or likelihood of conversion (or now);
nurture those leads by providing helpful content on your company blog or social media channels
a prospect’s high score signals an intention to buy from your business soon which will increase conversion rates over time.
The lead score provides valuable insights into lead behavior as well as what steps are needed next in a buying cycle.
It helps measure who's interested at any given point based on behavioral indicators.
The lead score lets us know when it is time to contact a potential ideal customer with more information about our products or services.
From there, you can determine and assign what the best practices are for your business.
In order to assign someone an appropriate level on their lead score in a marketing automation platform, consider things like what content types have been consumed; how many times has this person engaged with your content; the depth of which they have engaged with your content.
What is a Good Score?
It varies, but most businesses consider anything over 50% qualified as "good." Anything under 30% may signal an incomplete lead generation process or lead qualification strategy.
A lower number of leads can also mean poor marketing ROI and inaccurate sales forecasts - so this is something a sales team would want to get their hands around.
A high score signals intention to buy from your business soon which will increase conversion rates over time.
By focusing on how a qualified lead is behaving, it's easier for marketers and salespeople alike to create better strategies for closing deals at every stage of the funnel from generating more leads all the way up to maximizing revenue per customer.
When Should I Start?
The best time to think about implementing lead scoring is when you are marketing your products or services.
If a prospect converts into a customer, but they never buy from you again, then it's time to use lead scoring and reevaluate the most effective ways of reaching that buyer with valuable information related to their past experience.
But what if you're not currently in the state of selling? In that case:
Identify which lead is on your target market list - like new mothers who have been looking at baby clothes online.
Track these qualified leads via analytical software tools like Google Analytics
Collect as much data points as possible about each buyer such as their age range and gender.
Analyze the data using intuitive scoring criteria software to see where your prospects are and how their behaviors when visiting your site with a specific persona profile.
For example, I was selling books online through my website called lionbooks.com and I'm going after people who like reading fiction novels about crime thrillers and mystery stories.
When this type of lead visits my site, I can have them take an engagement scoring quiz to see if they are in the right place.
If their answers indicate that they might be interested in other genres, I'll have them complete another form and send them an email with information about new crime thriller books.
But know that just because someone scores high doesn't mean they're ready to buy. It just means that person has shown interest before.
Now I know where to focus my efforts when my sales team and I create a market strategy.
Demographics
Demographics are self-reported data about a prospect. It's important because it tells us what may be driving their needs or interests.
Based on the demographic data, they provide an overview of what motivates our customers and how they behave when it comes to making purchase decisions.
Consider another hypothetical: we have Bob and Suzie.
Bob has a family of five children that he needs to take care of after work every day. He's also just been promoted at work but it came with an increase in expectations from the boss. Bob doesn't have much time for anything outside of work and is very worried about the promotion.
Suzie works part-time as a marketing manager, has a baby, but she's been struggling to make ends meet for the last few months due to her company cutting hours back in order to save on expenses. So, she is thinking about looking for another job.
Both Bob and Suzie are also looking for child care services.
Bob Smith has a much higher lead score than Suzie because he's more likely to purchase according to his behaviors. He has more money and child care will help with his workload.
But it doesn't mean that they both can't be scored as prospects at all.
To bring Suzie in, a child care service can start with a sales tactic like lead nurturing.
If you just focus on prospecting only those who are actively engaged with your company, then you'll miss out on half of the market.
Activity
Score your leads based on their level of activity and engagement with your company.
Scoring a lead on their level of activity can help you prioritize the sales process for leads and determine how to best nurture them.
We recommend that companies assign a score with an easy system like 0-100 or even fast/slow, based on your potential customer's interest in purchasing your product.
The most active lead will earn higher scores than someone who is somewhat interested.
Try this scoring system out:
Quantity of Purchases: Customers who purchase a lot of items from your company will earn higher scores than those who only buy one product. They have shown a greater interest in your products, and are likely to be interested in future offers as well.
Length of Time on Site: Score customers based on how long they spend browsing your site without purchasing anything or clicking away from the page.
Referrals: This score should calculate how successful your marketing efforts have been so far. If you're advertising on social media platforms, for example, then referrals should be considered in this score as well.
Offers Received: This is the number of offers that customers can accept or decline before they make a purchase decision - usually an email offer to subscribe to some kind of service.
Total Value Spent: The total value spent by a customer after everything else has been calculated determines how much they are worth to you. This is the cumulative value of all products or services a customer has purchased from your company, regardless if it was one-time or recurring payments.
Lifetime Value: The lifetime value of each customer can be calculated by multiplying their total purchase amount with the average percentage rate that they spend on other purchases within an estimated timeframe (usually 12 months).
Common Mistakes
Some departments might not want to score leads because they want a more personal touch. This is a common misconception that can result in missed opportunities.
People who prefer to have one on one conversations with customers will often come up empty-handed when it comes time for sales or marketing outreach since they would not have enough data about the customer's preferences and interests.
Another common mistake is not nurturing your leads. Just because someone has a high lead score, it doesn't mean they're going to buy from you right away.
You still need to engage with them and continue providing valuable content that will lead them down the sales funnel until they're ready to make a purchase.
Start Scoring Leads Today!
If you're starting out as an entrepreneur, it may feel overwhelming at first trying to get all of these factors down pat. Find people who are experts in their field and work together closely so mistakes like forgetting important aspects of your company won't happen!
It's not enough for businesses just to look at aggregate numbers such as total revenue or number of customers served; if these companies want a competitive edge over competitors, then they need to track individual customer information too. Lead tracking allows them to see every interaction that each customer has had with the company, which can lead to more accurate and profitable marketing decisions.
If you're not sure how to get started with lead scoring, or if you want to learn more about how we can help, contact us today! We would be happy to chat with you about your specific needs and see how we can help increase your sales pipeline.