B2B companies are turning to the potential of lead scoring -- the automated process of qualifying and segmenting leads on your website -- to identify valuable customer prospects, recognize those people who need a little more attention and determine visitors who just aren't a fit with your company. A welcome side effect of this process is the alignment created between sales and marketing.
How do companies actually score their prospects and label them? What real scores do they use? This won’t be your first article on Lead Scoring -- more like your fifteenth -- but unlike articles that list general steps for implementation, and about a hundred broad-spectrum scoring rules, this one will focus on what really works in practice.
Most companies keep their lead scoring know-how to themselves, but I'm going to share some of the most effective lead scoring rules and lessons learned, based on real experience with the Kentico website.
Setting Up Lead Scoring Rules
One of the primary use of lead scoring is for determining the sales-readiness of leads -- a method shared by the marketing and sales teams -- that enable us to quickly target and contact leads closest to sale, further nurture those not yet ready and abandon the rest. The closer alignment of sales and marketing efforts is a side benefit!
While a one-scale lead scoring system might be efficient for B2C companies, we are in the B2B market and have a longer sales cycle, so we use the two-dimensional system of scoring -- engagement with our business and fit to our business (on separate scales).
These two dimensions are invaluable in avoiding wasting time on leads that have a high score, but no real interest in purchasing, and unlikely opportunities (leads with a low score, but who are very interested in making a purchase).
For example, a student working on his homework about your industry may spend hours on your website -- reading your materials, watching your videos and downloading brochures. This accrues him a very high score for engagement. But, in this two-dimensional approach to scoring, his demographic data wins him very few (or perhaps even negative) points for his fit into your business, meaning that his information is not passed to sales so they can focus on real leads. To be processed by sales, leads must meet a certain score level in both dimensions.
Explicit (Demographic) Scores Showing the Fit to Your Business
Explicit scores are highly dependent on data submitted to you by your site visitors. You may also acquire such data from third party online directories of companies and business professionals. But our experience is that only a small portion of information gathered on the website will match (and can be paired with) the databases of these third party services. Furthermore, even the successfully matched data is not always accurate.
So, the value of your explicit scoring is based on the richness of your website form fields, the willingness of visitors to complete them, and how honest they are when they do. However, the more fields there are in a form, the lower the response rate. So you have a balancing act to gather the most powerful information in the smallest number of fields, having to make a compromise -- amount of information versus response rate.
In our case, we have only three mandatory fields -- First Name, Last Name and email -- and two optional fields -- Company and Phone.
Implicit (Behavior Based) Scores Showing Engagement with Our Business
The following table shows 25 scores that are based solely on the behavior of the lead or their source of traffic:
Common Ground: Creating Lead Scoring Labels
Clearly communicating a lead scoring system is crucial towards aligning the efforts of marketing and sales. Prior to setting up the scoring labels, there must be a common definition of all the terms used within the company, such as “visitor,” “lead,” “hot lead,” etc.
We are currently using three labels (groups) of leads:
- Hot Lead -- sales-ready leads that require a quick response from Sales
- Warm Lead -- leads with medium sales-readiness that need to be further nurtured
- Cold Lead -- leads with even lower sales-readiness that need nurturing from an earlier stage in the buying process
To be placed in a group, the lead must meet a certain score level in both dimensions -- “engagement” and “fit to business.” The X axis of the following chart represents the level of engagement, while the Y axis represents how well the lead fits the business.
- Hot leads are all leads in group A1 (green color).
- Warm leads are those in groups: A2, B1, C1, B2, A3, C2, B3 (orange color).
- Cold leads are those in groups: C3, C4, B4, A4, D1, D2, D3, D4 (red color).
The points required for each group that represent how well a lead fits our business (Y axis) are below and have a maximum possible point level of 35:
To reach group A >= 30pts. To reach group B >= 20pts. To reach group C >=15pts. To reach group D < 15pts.
As you can see, we set up pretty strict rules in this dimension -- a loss of more than 5 points removes a lead from group A. This ensures that a lead without a valid phone number -- a loss of 10 points in our scoring system -- could never be labeled a hot lead.
Whereas a lead not supplying a company e-mail address, but only a free one -- a loss of 5 points in our system rules -- would still be considered a hot lead if all other rules are met. The points required for each group that represent a lead’s engagement with our business (X axis) are below. There is no given maximum (as some of the activities can be scored repeatedly):
To reach group 1 >= 70pts. To reach group 2 >= 60pts. To reach group 3 >= 50pts. To reach group 4 < 50pts.
In practice, any emerging hot lead is contacted ASAP by the sales team, while warm leads are processed on the fly, being prioritized according to their scores. Simultaneously, warm and cold leads are nurtured by the Marketing Automation with the goal of becoming hot and sales-ready.
Steps after the Successful Implementation of Lead Scoring
The implementation of lead scoring should initiate an ongoing and constructive discussion between marketing and sales that helps each better understand the needs of the other in achieving their common goals:
- All implemented rules should be under constant analysis for relevance and effectiveness in terms of points assigned to them.
- A deeper analysis of won and lost opportunities might be conducted on a regular basis to reveal weak points or false hypotheses employed in the initial implementation or latest iteration of the lead scoring system.
- Sales reps should be given a way of evaluating each lead after any interaction. Correlation analysis on this data should reveal the reliability of the current scoring rules.
These rules are suggestions to get started with your lead scoring initiative -- obviously points will be allocated differently on a per business use. But setting up clear rules, scoring labels and clearly communicating goals will get the groundwork in place before starting your program, then reassessing on a regular basis should set your business up for success.
Title image courtesy of Gesha (Shutterstock)
Editor's Note: To read more of Petr's tips on lead scoring, see his The 5 Most Common Lead Scoring Mistakes