Regardless of whether you have implemented a lead scoring system or are contemplating doing so, the relevant questions that need to be addressed remain the same. Because lead scoring is a living thing, it requires continuous attention to be effective managing leads from inbound and outbound marketing programs to provide the results you require.
Lead scoring resides within an organization and more often than not, that environment is dynamic as markets expand, contract, the distribution mix changes and the competitive environment intensifies. A good way to optimize your lead scoring system is to formalize a needs assessment (for new implementations) or to consistently hold operations reviews (for existing implementations), to ensure that the desired results are being delivered. In either case, the following questions are good ones to hold discussions around to guarantee everyone is on the same page.
What is the Goal of Lead Scoring
The objective of lead scoring is to align the right resource (Sales or Marketing), with the right content at the right time. Marketing and Sales exert a great deal of time and effort to generate leads, however, all leads are not created equally and so the challenge arises to prioritize leads so that the best leads are given the highest priority.
In short, lead scoring is a collaborative effort that involves at least three areas of the business: Sales, Marketing and Sales Operations—IT as well if Sales and Marketing automation people are not present. There is some required planning that needs to take place that will cover roles/responsibilities, terminology, processes, systems, accountability and reporting. It is absolutely critical that the head of Sales and Marketing be actively engaged in lead scoring for a successful implementation and smooth execution that will increase productivity, revenue and profitability.
What is Lead Scoring
Conceptually, lead scoring is a segmentation exercise. The goal is to take a heterogeneous “bucket” of leads that have been created from a demand creation plan and to create homogeneous “buckets”. Lead scoring is a managed, repeatable, process that objectively ranks leads so that the demand plan may be executed to yield optimal results.
Sales is concerned with leads that are sales ready – those that are in the buying process. Marketing focuses on those leads that are in the sweet spot but are not ready, willing and bale today so they nurture these leads until they are ready to buy. And, at the other end of the spectrum there is a bucket of leads that is assumed to be dead. Research shows that up to 80% of these dead leads will buy within a 24 months horizon so it may be wise to starburst these leads in a “three strikes” before you are out program. A well thought out demand creation plan requires a great deal of time, people and program dollars and to maximize Marketing ROI it is critical to systematize lead scoring and lead nurturing.
Demographic and Behavioral Data
Think of a two by two matrix with “interest” on one axis and “fit” on the other axis. The ideal leads quadrant for Sales is the one that captures high interest and best fit. In order to populate such a matrix some information about the lead is required. Specifically, who is this person and what is their interest. In terms of who is this person, demographic information that determines fit, such as title, role, industry, age, zip code, household income, number of employees or company revenues may be relevant. When evaluating interest, it’s best to look at actions or behavioral data to determine the level of engagement such as frequent visits to website, time spent on the site, content pages viewed, registrations, attendance and downloads.
Insights for Effective Lead Scoring
It’s important to have the right mindset when you set off to create and implement a lead scoring system. Think about a police sketch artist and a victim provides the details of the assailant for the artist to create a sketch. Obviously, the more detailed and relevant the details the more complete and accurate the sketch and that facilitates an officer’s ability to make a match. Since the Sales team is responsible for taking a lead and bringing it to closure, it is mandatory that the Marketing and Sales team sit down and document the criteria that is found in a lead that typically closes.
Lead Scoring – Do’s and Do Not’s
In terms of complexity, organizations tend to gravitate to either end of the spectrum. For an initial launch of a lead scoring system, it is best to keep it simple. Try to find and focus on a few (less than half a dozen) variables that have a direct correlation on identifying an opportunity that has a high propensity to purchase. Avoid the temptation to identify every variable or to have too many gradations of a variable. The basic rule of thumb is to not ask a question that yields a result that can’t be acted upon. In other words, if you ask a question and retrieve a response, will that information cause an action that is different than if you did not ask the question at all.
The Litmus Test
Once you have established a few criteria, run historical lead data against the model and view the results. My preference is to take homogeneous segments and view results. For instance, one segment might be everyone that has purchased, another might be those leads that have been accepted by Sales are in the sales pipeline, a third could be those leads that have been selected for nurture and the last bucket may be those leads that have been rejected. When each segment of leads is run through the model, look for clusters. If you chose deals that have closed and backed into the leads, did all of those leads cluster around “hot”? If not why?
Whatever criteria you select to use in your lead scoring model needs to be consistently applied to all leads that are created from your integrated demand creation plan. This means every lead form on the website, all registrations forms, surveys, telemarketing, inside sales and direct sales calls, events, etc. Your systems of record (sales force automation and marketing automation) need to have fields that capture, store, report and share information that can be aggregated, synthesized and internalized. Also, it is not enough to ask the questions that drive lead scoring, the responses need to be closed ended and they should always include the same choices. For example, if employee size is a question then the response choices need to always be the same–the ranges can’t vary.
Segment With Purpose
Lead scoring is really a segmentation exercise and that begs the question of how many segments is the right number. The answer is, continue to segment as long as there is a differentiated follow-up process. Sales and Marketing have to be in sync with a mutually agreed upon lead follow-up plan before lead scoring is implemented. Based upon whether the lead is for Inside Sales or Direct Sales, the lead is from a major account or from a deal that is in the pipeline, ensure that you have right content to follow-up.
Dealing with Perishables
There are numerous studies that state a direct correlation between—the quicker the better and think minutes and hours, not days or weeks. Therefore, it is critical that Sales and Marketing agree in the demand management plan on the timing of lead follow-up for each lead type and that accountability is built into the model. In some cases, it might be appropriate to remove reps that do not follow the process for the program and their Sales Manager assign them a quota for generating their own leads–daily.
Nothing is Perfect
Nothing is ever perfect and that expectation is alive and well in the world of lead scoring. Lead scoring is a living process and as such any lead that “slips” through the process needs to be put under the microscope. Again, take this bucket of misfit and try to segment them. Each segment needs to be reviewed and additions, deletions and modifications to the lead scoring rules need to be made to eliminate the “misfits”.
At the end of the day, the goal of lead scoring is to provide the Sales team with the best opportunities (as agreed by Sales and Marketing) as quickly as possible. The premise is that Sales people have a finite amount of time and if they optimize their time usage with the best leads that there should be a direct impact on revenue. In addition, the leads that should be nurtured are identified and segmented. And, segment those leads that should be starburst so that new contacts in the same company can be engaged to serve as a second opinion as to whether there is valid opportunity within that organization or not.