“Knowing is not enough; we must apply.”
—Leonardo da Vinci
What’s it like to work in sales and marketing for a company that doesn’t use lead scoring?
Well, imagine watching the World Series with your friends, but with one small change: This year the MLB has decided not to keep score. Each time one team rounds the bases, everyone gives high fives and then just turns around to do it again.
Sure, everyone on the field is probably having a lot of fun, but you’re not interested in watching people have fun without any system in place to know how well either side is doing.
On the surface, it may be hard to relate this idea to your sales and marketing efforts, but this is essentially what a lot of companies do when it comes to collecting leads for their sales funnel — they round the bases, get people in the funnel, and repeat.
In 2011’s Moneyball, Jonah Hills’ character, Peter Brand, famously says, “Your goal shouldn’t be to buy players, your goal should be to buy wins.” He’s not talking about rigging games to cheat, but rather using the Oakland A’s recruitment budget in a way that overlooks player names and numbers to focus on what truly wins baseball games: the right people with the right numbers.
Today, let’s explore how, by implementing lead scoring for your sales and marketing process, you can understand who the right people are for the funnel and can get to the right numbers, giving you a better indication of success.
What Is Lead Scoring?
To borrow a definition from HubSpot, one of the premiere inbound marketing platforms in the world, “lead scoring is a methodology used to rank prospects against a scale that represents the perceived value each lead represents to the organization.”
While that seems pretty straightforward, there are a few important keywords and phrases we should define so that you can apply this statement to your B2B marketing activities:
- “Methodology” – Lead scoring is a methodology. It’s not something you just do on some leads and not others. It is a system that is put in place and reviewed over time for accuracy and effectiveness. It is a filter that is always active for all leads that come in from marketing efforts as they make their way to sales.
- “Rank” – Just like in our sports metaphor earlier, lead scoring exists to create a quantifiable sense of how well the marketing-sales process is working. It even ranks leads coming in and assigns them priority levels. No “warm fuzzies” or “gut feels” in this equation; everything is based on numbers.
- “Each Lead” – Lead scoring isn’t about lumping groups of prospects together and treating them all the same. Each lead that comes in gets its own score and is categorized accordingly.
- “The Organization” – Lead scoring will be different for each organization that applies it to their sales and marketing practices. A “one size fits all” lead scoring template doesn’t exist because every company has a different definition of a quality lead.
Why Is Lead Scoring Important?
Creating a lead scoring methodology is a tedious process, so before jumping in, it’s important to dedicate yourself to the work and eventual outcomes.
Due to its intensive and complicated nature, up to 66% of businesses still don’t practice lead scoring, so simply adopting it will give you a leg up on your competition when you decide to begin. In the B2B realm alone, MarketingSherpa calculates that only around 21% of companies have established a lead scoring practice.
The benefits of lead scoring number in the dozens. Having a deeper understanding of which leads meet the qualifications of your highest converters and then systematically communicating with them accordingly increases both ongoing engagement and saves your internal team time chasing down inopportune leads.
Without going into too much detail, here are some of the major benefits of a well-oiled lead scoring system:
- Sales and Marketing Alignment – Depending on your organization, sales and marketing may exist in different departments or even different states. But in today’s online buying environment, it’s more important than ever that sales and marketing work together toward the same goals. Having clearly defined lead scores facilitates constant communication, allowing sales to clarify which leads are the most beneficial to them while helping marketing to generate effective content and outreach efforts specifically targeted to those groups. A proper lead scoring methodology involves regular meetings between sales and marketing to tweak and update the lead scores based on conditions on the ground, keeping a constant open line between the departments.
- Higher Quality Conversions (and More of Them!) – If marketing spends its time nurturing leads that are more likely to convert once they get to sales, then more leads naturally convert into sales (and isn’t that honestly what we all want in a lead generation program?). A common misconception is that a lead scoring system will bring in more leads overall, but in reality, its purpose is to bring in more quality leads. At the end of the day, wouldn’t it be better to have 65 out of 100 leads convert compared to 30 out of 100, even though the total number doesn’t change?
- Better Sales Efficiency – You’ve all heard the phrase “time is money,” so make sure your sales team isn’t spending their time chasing leads that won’t turn into money. A lead scoring system can (and should) do a lot of the heavy lifting when it comes to filtering out leads that won’t convert. As a result, it will help shorten the time required to complete the overall sales cycle.
How You Can Apply Lead Scoring
As mentioned earlier, there is no “one size fits all” approach to creating a lead scoring system for your company, but the following steps will help you begin to craft the methodology that will work for your team:
- Decide whether or not your organization would actually benefit from a lead scoring system. If you currently have no need for business leads or have a sales team that won’t call them even if they get them, then going through the effort to create and implement a lead scoring practice will be a waste of time. If that’s your current situation, you can skip the rest of this post.
- Make sure you have the necessary data to review and calculate accurate scores for your leads. You need to be able to gather demographic information as well as data on how prospects interact with your website and content. At the very least, make sure you have some sort of website analytics set up.
- Identify the criteria that define a Marketing Qualified Lead (MQL). HubSpot defines an MQL as “a lead judged more likely to become a customer compared to other leads based on lead intelligence.” This is where your organization’s unique customer base, sales cycle, and key differentiators come into play. This is also where having website analytics and insight into prospects’ actions on your site become very important. You want to boil it down to five or six criteria that identify the best prospects for your sales team to chase. For instance, if you know that Logistics Managers at Fortune 500 firms in the Seattle area that have subscribed to your email list and submitted a contact form convert at an 87% higher rate than other website visitors, imagine how much higher your close rate would be if you can make sure that 75% of the leads going to sales meet those criteria. Take time to go back through the last 12 months’ worth of lead and close data to find those common attributes and document them.
- Establish ways to capture and monitor those criteria through your marketing efforts. Whether that involves signing up for a marketing automation platform or simply updating the forms on your site to capture more information that relates directly to your established criteria, make sure you can track the type of people that visit your site.
- Assign point values to your chosen criteria. Now that you know what actions identify quality leads and you can monitor those actions on your website, go back through your documentation and begin assigning point values to those actions based on how much they influence the quality of a lead. For instance, someone who visits a specific page on your site may be more likely to buy than someone who submits a contact form. The ranking system you choose is ultimately arbitrary, but most companies use a 0 to 100 point scale.
- Determine the score that indicates a sales-ready lead. Once your scoring is in place, determine the threshold someone must reach to be considered an MQL. Reviewing the scores of existing customers, does someone with a score of 65 out of 100 usually convert, or do they need to be closer to 85 or 90?
- Track the lead scores. Whether this is done manually through Excel (not recommended) or through a marketing automation platform, make sure you track leads so you can kick them over to sales once they reach MQL status.
- Assess and update. Your sales and marketing teams should be meeting regularly to asses the performance of the lead scoring system and the quality of leads delivered to sales. If tweaks are needed, they should be made and then re-assessed at the next meeting. Continue this pattern to evolve your lead scoring system for the better.
Lead Scoring for Growth
Just like you’d never step into a baseball diamond with no understanding of what it takes to win, you shouldn’t send your marketing and sales departments into the game without a clear understanding of what constitutes success. By implementing and monitoring a successful lead scoring program, you can provide your entire organization with a better understanding of which leads are more beneficial to the bottom line and come up with a game plan to grow your B2B business by developing better leads and focusing on the ones that convert.
Lead scoring is understandably a complex process, so if we can be of any assistance, feel free to reach out and contact us directly for help.