Your marketing team is generating hundreds of leads every month. That’s awesome! But is your sales team able to prioritize which leads to nurture and engage with first? Lead scoring helps qualify leads, so salespeople can avoid wasting time on leads that are unlikely to convert.
In other words, the lead scoring technique enables sales and marketing teams to determine whether a lead is worth the investment of their time, budgets, and nurturing efforts.
Most lead scoring guides out there are outdated. So, in this guide blog post, we will share fresh information and help you understand the ins and outs of the lead scoring process, and how you can create a lead scoring model for your organization that helps you hit those revenue goals you’ve set for 2024!
Table of Contents
The Lead Scoring Process
When you have thousands of leads, it’s practically impossible to filter them manually. Besides, you need to check if your lead scoring model is working for your sales team or not. To understand how lead scoring works, let’s understand its basics first.
Typically, the lead scoring process assigns a value to leads based on their behavior and interest in various products or services. Businesses either use a points-based system or simply tag leads as ‘hot’ ‘cold’ or ‘warm’ based on previous interactions.
The higher the score, the higher the probability that the lead will make a purchase.
These lead scores are calculated using various parameters, which may differ from company to company. Again, each company has different models to assign scores, but it can be generally categorized into two categories: explicit lead scoring and implicit lead scoring.
Explicit Lead Scoring
Explicit lead scoring involves assigning scores to potential customers based on information received from them directly.
It commonly includes demographic attributes such as the size of the company, income, job designation, gender, region, industry, and so on.
Implicit Lead Scoring
Under implicit lead scoring, companies observe a prospect’s behavior and then assign scores.
Parameters included under implicit lead scoring are the number of website visits, email engagement, white paper, gated content downloads, watching product-related videos, newsletter subscriptions, product demos, and the number of interactions in the marketing and sales funnel.
Lead Scoring Example
For every attribution or parameter that applies to your leads, points are earned. Often, when a lead reaches a certain score or point threshold, a sales rep will reach out to them and close the deal.
Let us take a look at a lead scoring example to understand this better. Assume that you have a company that sells software, and to qualify a lead, you assign a score to each attribute –
Opened an email: +2 points
Visited the pricing page on your website: +10 points
Watched a product tutorial: +20 points
Placed an inquiry on your website: +10 points
Subscribed to your newsletter: +12 points
If the lead fulfills all the above attributes, they would have a total score of 54 points. Assuming that your sales team closes deals more when a lead has scored 45 points or more, this lead has already qualified for the sales motion.
Types Of Lead Scoring Models
Based on the different types of data you collect about potential clients, you can use various models to assign scores to them.
Let us learn more about the different types of lead scoring models.
#1. Firmographic Model or Demographic Model
Also known as explicit lead scoring, the firmographic or demographic model allocates scores to leads based on characteristics such as age, gender, location, industry, company size, job title, income, number of years of experience, and so on.
Typically, companies gather firmographic or demographic data by asking prospects to provide their details using web forms.
The information can then be used to assign points to leads that fit your target customer or buyer persona. Generally, eCommerce and retail firms use firmographic and demographic models to score leads.
Let’s suppose you are an online cosmetics brand that has newly launched a skincare product for women between the ages of 25 and 40. You can assign score to each relevant attributes –
- Age: +5 points
- Female: +10 points
- Employed: +10 points
- Visited Company Website: +20 points
This will not only help you figure out who your target audience is but also where they are based and their buying patterns.
#2. Purchase Intent Model
Similar to implicit lead scoring, the purchase intent model scores prospects based on their buying behavior. It includes observing a lead’s web activities and helps you understand whether they are interested in your product or simply browsing.
The purchase intent model is ideal for businesses that sell digital products and services, such as SaaS companies. Alternatively, it can also be implemented by eCommerce brands to observe the actions taken by users on their web stores.
Purchase intent data can be collected from both first and third-party sources that can help pinpoint when a lead enters the buying journey.
This allows you to examine and understand their actions better.
#3. Product Engagement Models
Lead scoring can also be done by understanding their level of engagement with your brand.
You can track parameters such as email open rates, clickthrough rates, and interactions on social media platforms in terms of the number of likes, shares, or comments, and grade them.
The higher the score, the more interested a lead is in your product or service.
A product engagement lead scoring model can look like this –
- Opened an email: +10 points
- Commented on a Facebook post: +5 points
- Liked a post on Instagram: +10 points
#4. Digital Behavioral Models
Digital behavioral models entail assigning scores to your leads based on actions they perform on your website or online.
Examples of attributes under a digital behavioral model include the number of times a lead has visited your pricing page, subscribed to your newsletter, or filled out a web form.
Here is how you can use digital behavioral models to calculate lead scores:
- Visited the pricing page: +10 points
- Subscribed to your newsletter: +8 points
- Provided details on the web form: +12 points
- Visited the ‘Careers’ page: +7 points
#5. Negative Scoring Models
Lead scoring does not only involve rating positive attributes of prospective customers.
It also includes assigning negative scores to your leads, since it helps you easily identify which ones have little or no interest in your brand.
Factors such as unsubscribing from your newsletter or mailing list, being an internal team member, friend, or relative, or having a spam or fake account, are a few negative attributes that help companies remove poorly ranked leads from their sales funnel.
Below is an example of what a negative lead scoring model looks like:
- Did not visit your website: -7 points
- Unsubscribed from your newsletter: -10 points
- Did not respond to emails: -8 points
- Friend of a team member: -5 points
Why Is Lead Scoring Important For Your Business?
70% of B2B businesses are not ready to buy.
That’s why it’s even more critical to use the lead scoring process to qualify your leads and increase the chance of conversions.
Besides, studies have shown that businesses can reduce the time taken to close deals by over 50%.
Let us look at some of the other benefits of lead scoring.
#1. Improved sales efficiency
Lead scoring helps sales reps decide which leads to go after.
It has a direct impact on their productivity without wasting time on prospects that are inactive or unresponsive.
Besides, it enables them to offer improved customer experiences at the different stages of the sales journey, helping you convert leads faster.
#2. Better alignment between marketing and sales teams
Despite a lot of leads coming in, the sales team isn’t able to meet the quota. Sounds familiar?
More often than not, it isn’t the fault of the sales team. The leads that the marketing team is qualifying may not be the right ones.
Having a lead scoring process in place makes the marketing and sales teams work together and better define the lead qualification criteria.
This way, the marketing and sales teams stop working in silos, and hopefully, stop blaming each other 😅
#3. Saves costs
Lead scoring is effective in helping businesses cut down their costs.
When your leads are properly defined, sales and marketing teams can better qualify their prospects and nurture those leads to increase the chance of conversions.
All their efforts will be directed toward active leads that are open to making a purchase.
#4. Better marketing campaigns
Lead scoring not only helps generate a higher ROI on your marketing efforts, but it also helps you identify which campaigns are generating better leads.
Suppose that your email marketing campaign generates 200 leads per month but out of these, only 50 converts.
On the other hand, your social media campaign generates 80 leads, but all of them are highly likely to convert.
Lead scoring helps you determine which campaigns are getting qualified leads, allowing you to direct all your efforts in the right direction.
How To Create a Lead Scoring Model For Your Company?
Lead scoring might seem like a complex process at first. But with the use of the right tools, you can automate the process. You just need to define your lead scoring model in a good CRM system, and it will do the rest.
Once a contact is added to your CRM database, the software should automatically start assigning scores and qualifying your leads.
Here’s how you can build a lead scoring model for your business.
#1. Define your ideal qualified leads
The lead scoring process starts with defining your ideal leads.
Ideal leads are those that will stand to benefit the most from your company’s products and services. To do so, it is best to understand your current customers and see what makes them loyal to your brand.
Do they belong to a certain age group? What is the size of their company? Which industry do they work in? Where is the company located?
These are some of the questions that can help you identify suitable leads and qualify them.
#2. Get clarity about lead attributes for scoring
To create a robust lead scoring model, you will need to list down the explicit and implicit attributes that will help your prospects proceed to the lead qualification stage.
These attributes include age, location, income, job title, and behavioral characteristics such as the number of visits to your website or pricing page, subscribing to your newsletter, or providing details on your webpage.
#3. Assign values sensibly
Here, you need to assign scores to each attribute based on their significance.
Let’s say you are trying to target customers from a certain region with a specific income group. You can assign more scores to leads coming from that particular region or any leads from that income group.
This will help you target your ideal prospects more closely and increase the chance of conversion.
#4. Determine a threshold for the scores
Once you have assigned numerical values to each of the attributes, you need to determine the threshold for them.
That means once a lead achieves a certain score, the sales team should attempt to close deals with them. This also helps you identify which leads require immediate attention and the ones that need further nurturing.
Alternatively, you can also qualify leads by defining threshold limits using the below method –
- Hot: These leads are ready to be moved into the sales pipeline and have an overall score of 50 and above
- Warm: These are the ones with scores between 30 and 50
- Cold: These leads have overall scores below 30
#5. Review your lead scoring model regularly
Refining your lead scoring model is an ongoing process. When you review your lead scoring process regularly, you can better understand any new or emerging trends in your target audience.
Besides, take inputs from your marketing and sales team to determine which attributes are helping with the conversion more. You can then keep modifying your process.
In the video here, Megan shows you how you can use EngageBay for free and maximize your conversions with its lead scoring features.
Lead Scoring Best Practices
While creating your lead scoring model, here are some best practices that might come in handy.
#1. Determine your ideal customer profile
While this might seem obvious, this is where most lead scoring models fail. Businesses do not define their attributes on a deeper level.
Let’s say your target audience is from NYC but someone from Manhattan is more likely to buy your products based on their lifestyle. If you assign the same score to someone coming from Brooklyn because he also resides in NYC, your lead scoring system might not get you great results.
To go further, you can identify a certain income group from Manhattan that can better afford your product. It will be an added bonus to assign a higher score to someone matching both of the criteria.
Some ways to better understand your ideal clients include conducting interviews and taking surveys, gathering relevant demographic and behavioral information, segmenting your target audience based on their motivations and needs, identifying their needs, and assessing how your product or service can serve them better.
#2. Align your sales and marketing teams and objectives
Another tip for maximizing lead conversions is by aligning your sales and marketing teams.
Since sales teams are in charge of closing deals, they can share their insights with the marketing department on which channels or characteristics lead to the highest conversions.
This helps marketing teams optimize their strategies and formulate their own lead scoring approach.
#3. Determine a lead scoring threshold
To qualify leads for the next stage of the sales funnel, you need to decide on a lead scoring threshold. The threshold is defined as the point value where a lead is considered sales-ready.
You can, in fact, define a different point value at various stages of the sales funnel. Let’s say a lead scores 20; it qualifies but needs more nurturing.
But a lead with a score of 30 is ready to meet your sales team, and might just get converted.
This level of clarity helps your sales team determine which leads to prioritize.
#4. Identify all the touchpoints in your sales funnel
Although you might already be aware of your target customer, it is important to be aware of the various touchpoints in your sales funnel.
These touchpoints include the channels by which your customers find your brand, methods used for lead generation, time taken to convert those leads, channels that lead to the maximum conversions, and so on.
You can assign scores to these attributes and further filter your lead scoring process.
#5. Include negative scoring
A lead is constantly visiting your website and checking out the products.
They might seem like an ideal prospect at first. You may assign scores based on their interactivity with your business. But even after your multiple attempts to set up a demo call, you fail to nudge them into that stage of your sales funnel.
In this case, you can reduce their lead score and re-evaluate your strategy. Negative scoring can help you remove leads that might be interested in your brand but are unresponsive or cannot make a purchase immediately.
It enables sales reps to focus on prospects that are close to conversion now, as opposed to those who need more nurturing.
Automate the Process of Lead Scoring
Today, most CRM platforms offer predictive lead scoring features. While the functionality of the software matters, sales success largely depends on how smartly you define your lead scoring model.
Besides, a good predictive lead scoring tool learns from your past data and helps you better formulate your scoring method. It also helps optimize your lead follow-up strategy over time as the scores keep getting smarter.
If you are looking for a free predictive lead scoring tool, EngageBay is our recommendation.
EngageBay not only helps track engagement and qualify your leads but also automates the process of following up. It syncs all your activities and helps your sales team take action faster.
Lead scoring can help your sales team save 20 hours per week.
Usually, it is seen that this marketing and sales process is more effective in industries with longer sales cycles, such as B2B.
Define different attributes, assign scores to them, and increase the chances of achieving your revenue target this year 😄