A qualified (or sales-ready) lead refers to a potential customer or prospect in the consideration stage of making a purchase. While not every prospect is made equal, some prospects are more willing and able than others, the opportunity to nurture and develop the lead exists in any situation.
To assist, the concept of lead scoring, or determining the readiness of a lead to buy, helps sales teams prioritize their contact management tasks. At the same time, marketing campaigns can be optimized based on the lead scoring data that’s collected and analyzed. Type of product or service sold segmented by lead source, industry, buyer persona can all be helpful indicators for expansion opportunities.
It is an advantageous strategy that’s essential to bringing effectiveness to top of funnel marketing. Also, bringing efficiency to the average sales cycle can result in increased conversion rates. Unfortunately, due in part to the abundance of organizations that do not use lead scoring, 79% of marketing leads never convert into sales.
What is Lead Scoring?
Lead scoring is the process of assigning a value (or score) to a lead (or sales opportunity) to determine the likelihood of a successful conversion and the estimated value associated with the expected transaction. The concept incorporates behaviours of the lead prior to directly contacting the selling company, including brand engagement and website views.
Estimated transaction value and lead characteristics, such as geography, budget, timeline, and overall need are also considered. The higher the lead score, the higher chance the lead will make a significant purchase in the short term, the higher the priority of the contact management tasks associated with the lead.
What Are the Benefits of Lead Scoring?
Lead scoring enhances an already-existing marketing automation strategy. Integrated appropriately, it can have positive impacts on your company.
Increased Sales Operations Efficiency
The main driver behind implementing a lead scoring strategy is to increase business operations efficiency. This is achieved by automating the process of prioritizing contact management tasks.
Lead scoring can help sales agents gain a better understanding of which leads should be followed up immediately, and which leads can be acted on at a slower pace. A lead response study of 2,241 US companies found that the average amount of time that it took B2B companies to reach out to their leads was 42 hours. Interestingly, the same study found that up to 50% of sales go to the vendor that replied first.
With insights such as these, your salesforce can spend less time deciding what to do next, and more time doing. For example, if an average sale cycle of four days cuts down by 25% to 3 days, a sales rep’ capabilities to complete sales increases by a third. That is where the money is left on the table.
Increased Marketing Campaign ROI
Most companies are not using a lead scoring system effectively. In fact, 61% of B2B marketers send all leads directly to sales, but only 27% are considered as qualified. This means that most sales teams are wasting their time on unqualified leads that are unlikely to make a sale, and not focusing enough efforts on the qualified leads that are ready.
If marketing gains an understanding of the type of leads salespeople want to speak to, then lead generation campaigns can be optimized to target those exact ideal customer profiles in very specific channels. This will result in more qualified leads and less wasted efforts on both sales and marketing fronts.
Through analyzing lead scoring data, marketers can tailor current marketing strategies to generate more high-quality leads. Firstly, the type of digital channels and offerings that are most likely going to result in attracting the ideal customer profile can be identified and optimized. Some examples include type of social media platform, website structure, and webinars.
Secondly, the content provided for these means can be developed to communicate properly to the target market. Some examples include specific Google search trends and keywords, video and image media, and downloadable whitepapers.
Increased Company Revenue
It is a fact hat your organization will not only become more productive and effective by implementing a lead scoring system, but they will also experience an increase in lead generation.
First Two Steps to Creating a Lead Scoring System
While only 44% of companies are using any kind of lead scoring system, deciding to implement a lead scoring system as part of your marketing and sales strategy can make your entire business more effective and overall, more profitable.
1. Create Ideal Buyer Personas
First step is to define your target market through the development of ideal buyer personas. A buyer persona is a semi-fictional representation of your ideal customer that is based on external industry research, internal sales observations, and existing customer data.
There can be multiple variations of buyer personas, all of which bring different perspectives to consider when developing a lead scoring system. For example, if a manufacturing company is considering who they are selling to, they may focus more of their efforts on the target market that has more capability to make a purchase, even if there are other potential buyers that may not all fit into that defined persona. The likelihood of conversion outside of the ideal buyer persona is lower, so efforts should not be focused as much here.
2. Determine Significant Factors
Determining which attributes are vital enough to assign point values will eliminate the vagueness and will provide the foundation of the lead scoring system.
Lead scoring criteria will generally boil down to two main categories: 1) Demographic Information, which are the characteristics that a lead possesses, and 2) Behavioural Information, which are the actions that a lead takes or how they interact with your company. The following are some examples a company may deem significant enough to contribute to a lead score.
- Job title
- Company size and revenue
- Salesforce network
- Whether the customer has subscribed to a newsletter and/or viewed it
- How many times they’ve visited your company’s website, specifically its pricing page
- Whether they’ve requested free trials or attended webinars
- How many times they’ve viewed a web page or filled in form submissions
- Whether they’ve downloaded content, such as whitepapers
- If they’ve engaged with your company’s social media and content marketing
To equip their sales teams with the best chance of closing sales successfully, the tech industry implements effective lead management strategies – including lead scoring.