How to Implement Lead Scoring
B2B marketers are familiar with ways of describing leads. Unfortunately in most instances the description is very basic with simple categories of leads, good or poor being the most frequent which is hardly sophisticated. These terms are applied by sales to the leads that they get passed from marketing. A major problem in lots of companies is that the poor outweigh the good. This leads to sales wasting a lot of their time qualifying poor leads. This in turn leads to lead qualification becoming lower in importance so not done as quickly or thoroughly. The consequence of the delay or failure to contact is that some good leads get missed which changes the ratio between good and poor even more.
In high performance cultures, lead scoring is a shared sales and marketing methodology for ranking leads in order to determine their sales-readiness. Leads are scored based on the interest they show in your business (behaviours such as clicks, keywords, and web visits), their current place in the buying cycle and their fit in regards to your business (demographics such as company size, industry, and job title). read on to learn how to implement lead scoring in your company.
What is Lead Scoring?
Lead scoring is the term that has evolved to describe the agreement between sales and marketing of what constitutes a good lead.
The first element is to have the agreement documented but by far the most important element is the review process. You need to schedule regular reviews as both departments learn more about leads and their likelihood to purchase. In the early stages you will need probably weekly brief meetings to make sure things are operating as expected and then once things settle down the interval will change to monthly or quarterly according to the nature of your business. It should never be longer than quarterly. This fine tuning process will enable your business to evolve as buyers evolve over time. As buyers are changing their habits and various disruptive influences abound, staying on top of subtle changes will become increasingly important going forward.
The key point is that marketing and sales increase their combined efficiency and productivity based on the clarity of a sales-ready lead. Lead scoring helps companies know whether prospects need to be fast-tracked to sales or developed with lead nurturing depending on your product, industry, and buyer persona.
Lead Scoring explained
There are two sets of data that indicate the sales readiness of a lead, Demographic and Behavioural.
Demographic data is information that does not change quickly – such as company turnover, industry, geographic location etc. which defines whether the lead’s employer is a good fit for your offering. Within the company, job roles and titles are often also a key part of defining the demographics for a particular lead.
Behavioural data is information about the individuals interactions with your company – such as response to sales calls, trade show attendance, web site visits, eBook downloads etc. These can be interpreted to provide buying intent.
The lead score should merge the two categories to help decide the right time to pass over to sales e.g. A lead in your sweet spot for demographics that indicates some interest in your solutions is likely to be handed to sales more promptly than a lead showing more buying intent that is outside the sweet spot for target companies (perhaps in a country you don’t regard as strategic).
Two useful terms to help drive the process along are:
MQL – Marketing Qualified Lead – this is a lead that marketing think should be ready for handover to sales
SQL – Sales Qualified Lead – this is a lead that sales agree is qualified and accept.
This will inevitably mean that some MQL’s are rejected by sales – usually as not ready. These leads need to continue to be nurtured by marketing until they become ready. some firms refer to these as long term leads.
How to get started
Examine the activity history of recent customers and analyze how many actions they took before becoming a customer — i.e., the number of page views or number of conversions, such as downloading a report or registering for a webinar, etc. Include an analysis of sales touches and what marketing touches occured after sales became engaged with the lead.
Look for patterns that indicate a lead’s likelihood of closing. For example, if a lead downloads three pieces of content from your website or visits your site more than 15 times in one month after a trade show visit, she is more likely to close. It’s a good idea to incorporate frequency measures into your MQL definition as 1 web site visit every 2 months for years should score less than the same number of visits in a week.
Also, list all the activities that a lead can take before becoming a customer, and analyze the close rate for each one. For example, to determine the close rate for a webinar, look at all customers that had watched a webinar, then divide that number by the total number of leads that originally registered for the webinar. That gives you the close rate for leads from that
Calculate Average Close Rates
Using the close rates for individual actions, calculate the average close rate for all your marketing activities. Then look for actions that have a significantly higher close rate. For example, if your average close rate is around 1%, you might find a handful of actions that have a 3%-5% close rate. Add these top-closing events to your definition of an MQL. Any lead that engages in at least one of these activities, and is a good fit for your company, could be considered a MQL. Use those close rates to decide what score to give different activities in your lead scoring or lead grading system.
Get agreement between sales and marketing
The lead score needs to be written down and agreed by both departments. This is the most important step provided you have also set in place the review process described above. Once the basics are agreed the other critical part is agreeing the rules for handover from marketing to sales and sales back to marketing. This should be backed up with SLA’s e.g. marketing will supply 75 MQL leads per month. Sales will qualify and convert to SQL within 8* working hours or return to marketing for more nurturing. While we are on this section its worth agreeing what happens to lost opportunities – sales regard these as lost but marketing should regard these as not this time and nurture them for next time.
* Research shows that the sooner you contact someone the better the success rate. Calling within 5 minutes gives the best results with the recollection and responses dropping off over longer time periods. Many firms have introduced a team of internal sales people whose job is to contact leads within a very short window. 1 hour is a typical SLA for these teams.
Lead Scoring example click to enlarge
Setting up a lead scoring model for your firm will generate much more successful lead generation. Marketing know more about what sales need from leads. More focussed marketing will lead to an increase in good leads. Sales save time as they are working on good leads so become more enthusiastic for prompt follow ups.
Both teams benefit from the extra focus on quality leads.
You would see some benefits from this straight away without involving extra technology but without some form of marketing automation you will end up with lots of manual processes and delays so a marketing automation platform is recommended to make this easier and more scaleable.