Lead scoring is a methodology employed by sales and marketing departments of companies to decide the worthiness of leads, or potential customers, by assigning values to them based on their behaviour depending on their interest in products or services.
The “value” of each lead varies from company to company but usually is characterized by the interest shown in the company or their places in the purchase cycle. Companies assign point-based systems in qualifying leads or simply refer to them as “hot,” “warm” or “cold” based on the history of engagements.
Companies use data from archives of processes such as marketing automation, to predict a path that a customer takes before a sale is made.
Employing practices like inbound marketing, marketing automation and lead nurturing, companies can examine which pieces of content are most engaging to customers and how many interactions between the company and prospect decides the conversion factor.
Lead scoring process allow sales teams to separate a customer’s interest in products from their intent to buy.
For instance, website page views or downloads of certain documents may indicate that a prospect is merely interested but not intending to buy anything, and these actions will be scored lower than that of customers who undertake prospective buying behaviours by requesting a trial or viewing a pricing page. Determining the value of actions such as this typically requires input from the marketing and sales teams.
For improving their sales process, it is important for businesses that their marketing and sales teams closely arrange their lead management efforts.
The technology must also be properly designed with the right metrics and should be employed regularly. Or else, the lead scoring data may give out an incomplete picture on potential prospects and lead sales and marketing reps down a disadvantageous path.
How Does It Work?
Lead scoring allows you to attach value to your leads automatically. It negates the manual work once set up.
The value of a lead doesn’t stay the same over time.
Most lead scoring systems follow a 100-point scoring system. A lead that has a score of 90 today, isn’t necessarily going to be as valuable a week or two later, depending on your nurturing process and whether you’ve reached out to them.
This increase and decrease in value are also automated, which makes it easy for sales to prioritize leads that are sales-ready.
Marketing and sales dept shall together put in efforts for developing lead scoring strategies for the company. If you know who your ideal client is, this makes it much easier to form your lead scoring model.
Warm and qualified leads need to be handed off to sales, and marketing and sales can work together towards it.
At the same time, you shouldn’t expect immediate results from establishing your lead scoring model. Some leads will require significant time to nurture, and this also depends on your industry and the niche where you are serving.
Explicit & Implicit Scoring methods
Your leads can be scored in two different ways- the explicit scoring and implicit scoring methods.
The former, also called demographic scoring, refers to the information you’ve collected on a given lead, including information they entered in a form.
If you serve customers from several different industries, you might rank them differently depending on their value. Also, if their job title tells you whether they’re decision-makers or not, it will be another factor that affects your scoring.
Implicit scoring, also known as behavioural scoring, refers to what your prospects are doing on your website or in other sales channels like viewing more than one product page on your site, signing up for your newsletter.
These actions are viewed differently according to your scoring process. Differentiate between those with casual interest and someone who is clearly looking for a solution for better marketing results.
A well-developed lead scoring setup mostly blends these two methods. Also, negative scoring enables you to deduct points from leads when they unsubscribe from your newsletter or while they view your employment page. It helps you rank your leads more accurately, thus becoming a part of your overall model.
It’s very important to understand that lead scoring is just one of the many lead qualification techniques. Most CRM models don’t use scoring but move leads through different stages, which has the same effect in helping your sales team to identify best prospects.