The world's biggest brands understand a simple truth: not all leads are created equal.
The ability to find and convert high quality leads is what makes these brands successful. The best and brightest don't just focus on volume. You want to sell to the best possible prospect.
Today we're taking a page from your book and focusing on the quality of the leads. Whether you're running a business start-up marketing campaign or moving your local business into the digital age, you can't afford to waste time and money on weak leads.
Because of this, I will introduce you to the world of lead scoring and help you understand what it takes to build an effective lead scoring model for your company.
What is lead scoring?
Before we dive into the metrics and methods you use, let's establish a base definition for lead scoring.
At its core, lead scoring functions are a tool for marketers who want to precisely qualify their leads. Lead scores are used to determine the likelihood of a particular prospect converting based on certain characteristics.
Why are lead scores important? As I mentioned earlier, not all leads are created equal. Forty-seven percent of B2B marketers found the lead scoring effective, and 54 percent an indication of the effectiveness of the predictive lead scoring.
The chances of converting a cold call lead are dramatically lower than those of a referral lead. With lead scoring, you can equip yourself with a system that tracks and calculates lead scores.
What Are The Benefits Of Using Lead Scoring?
Now that you understand what lead scoring is, let's talk about why it's beneficial for your bottom line.
Less wasted time and money
A company that uses lead scoring learns how to allocate its resources efficiently. Spending thousands of dollars and hundreds of hours on a marketing campaign that produces average returns and unclear data is something most companies cannot afford.
Accurate buyer personas
Lead scoring is especially useful for companies selling high quality products and services. The more complex the decision, the longer your average conversion time from prospect to customer. By evaluating their behavior throughout the buyer's journey, you can identify the potential customers who are most likely to convert.
You can use this information to update your buyer personalities and create marketing campaigns that focus on prospects who typically convert.
Strengthen your potential relationships
The deeper you understand a buyer's journey, the more likely it is that you can alert them to a conversion.
Imagine for a second that Business XYZ already has a fantastic CTR with paid ads. Ten percent of the impressions result in a click. That's good news!
There's only one problem: the conversion rate is terrible. For some reason, it can't consistently attract buyers.
With the help of the lead scoring, Business XYZ can determine which pages and experiences put off potential customers. More importantly, it is able to change and improve those experiences and add strength to the weaker elements of the marketing funnel.
This behavior not only leads to more conversions. This also helps potential customers feel more confident about purchasing and strengthens the company's reputation as a customer service specialist. It is known as a company that takes care of its customers at every stage.
By developing a deeper understanding of your customers using lead scoring, you can create unprecedented user experiences.
Simplify the lead evaluation process
The ability to streamline your marketing and sales efforts using lead scoring makes it much easier to identify and convert the right prospects.
If you are interested in automated solutions, you can of course quickly qualify leads using given guidelines.
Metrics to evaluate your leads
The actual process of evaluating your leads can be a little intimidating, even if you're a seasoned marketer. To keep this guide accessible, I'll focus on four key metric classifications that I can rely on.
One of the most basic marketing concepts is the buyer personality, a representation of your ideal customer. To build that buyer personality and identify the appropriate metrics for your lead scoring efforts, you need to start with their demographics.
Personal information like age is a common starting point, but you will likely want to focus on professional information and capacity as well.
Ask these questions:
- What are the characteristics of your ideal customer?
- How do these qualities enable them to make a purchase?
- How can you create experiences that appeal to these customers?
If you are selling a high quality B2B product or service, students are unlikely to be your ideal target audience. However, if your lead identifies as an industry professional, the chances of them converting are much higher.
Lead scoring helps you organize this information, test your theories and assumptions, and identify the factors that contribute to a conversion.
Point of origin
Break up the buyer's journey and start with their first point of contact. If you have a sales background, this process should feel familiar. When determining which metrics to use, identify the origin of the lead.
See where your leads are being generated. Are they on your site as a result of an organic search or did they click on an ad? Did they visit your website on mobile devices or on the desktop?
As you track the sources of these leads, you will find that certain lead channels are more likely to produce leads than others. You will also find that certain combinations have unique conversion rates.
For example, a lead who reached your landing page from a social media post should have a lower score than an organic search lead who visited the price section three times.
Different points of origin receive different ratings, so both the overall value of the marketing channel and the individual quality of the lead can be easily determined.
If you focus on the source, your sales team will stay connected too. By preparing your sales team with contextual information about the prospect, they can pinpoint the prospect's knowledge of the business and the product or service.
A prospect's place of origin is an important building block in determining their conversion potential, but it's only the tip of the iceberg. By analyzing the behavior and actions of potential customers, you can identify the paths that lead to a real sale.
Most lead scoring systems use a point system that assigns specific values to certain behaviors. The beauty of this approach is that you can stress test your assumptions about your business and see how effective certain behavior is.
For reference, an action is a decision that a particular lead makes once they interact with your company. These can be:
If email sign-up is a massive predictor of conversion, give it a high score and you can focus all of your attention and marketing efforts on prospects who sign up for your newsletter.
If you're right, your conversion rate will go up and you can keep optimizing. If you're wrong, your conversion rate won't go up to meet your goals. You take a closer look at your data and restructure your distribution of points.
Either way, your company wins.
Engagement and actions are two separate categories. Actions track the individual decisions that potential customers make, such as: B. Reading a blog post or signing up for a newsletter. Engagement tracks when these decisions are made and how much time they spend on a blog post or email.
As a rule of thumb, the longer a potential customer has been consuming your content and interacting with your business, the more likely they are to make a purchase.
Of course, you probably want to set a maximum achievable range to avoid ruining your data. For example, if a prospect leaves their computer on overnight, it can hurt your lead scoring efforts.
Methods for evaluating your leads
The method for scoring your leads can be broken down into two sections: Lead Scoring Strategy and Common Practices.
Lead scoring strategy
Establishing a clear base process for lead scoring can help your company from a mechanical point of view.
Determine the metrics to be assessed
Let's start with the baseline process. First, you determine the metrics and variables that you want to evaluate. While it's easy to focus on upconverting metrics, you also need to identify which metrics are converting poorly. This can help you better understand your market and your customers.
Next, calculate both the value of the metrics and the value of your leads. There are two common approaches to calculating the value of a metric:
- Exchange rate: This is easy to calculate. Divide the number of conversions by the number of leads achieved and multiply that by 100.
- Lead support: This approach is a little different. This is a measure of total revenue from conversions. Take your sales and divide them by the number of leads generated. This gives you the average value of a given conversion.
To be clear, there is no one right answer. The method you use depends entirely on your overall business goals and pricing structure.
Conversion rate calculations may be a good idea for B2B SaaS companies with long-term customers. B2C companies and companies that offer fixed price products are more likely to find lead returns useful. Because the higher the value of a retail sale, the more valuable the lead.
Now you can compare the value of a specific group of conversions with the average of all your conversions. This allows you to qualify the performance of a particular metric and determine its importance.
Based on a particular metric's performance relative to the average customer, you can assign a score to that metric.
Most organizations use a 1 to 10 scale, but this is a personal preference. You can use a scale from 1 to 100 for greater precision. It's all up to you. However, be sure to create a rubric or key to keep your rating system consistent.
You have established some metrics and some scores at this point. So let's start with evaluating individual leads.
Here's an example: Imagine you have classified the accounting industry as a 10-point attribute, a C-level executive as a 5-point job title, and company as a 10-point company size. A lead that matches each of these metrics has a total score of 25.
You can now compare this score to your average customer and other leads to determine the priority of your leads. Easy enough right?
Tips for evaluating lead
By incorporating useful tips and tricks in, you can improve the quality of your lead scoring efforts. Consider some key concepts:
- Values according to metrics: For starters, not all metric categories should be rated equally. A demographic metric does not carry the same weight as a behavioral metric. Registering for a consultation is a much stronger indicator of interest than a job title.
- Values can be cumulative: Also note that some of these values are cumulative. This means that while a prospect's job title is counted only once, all of their actions are taken into account when calculating their lead score.
Tracking the success of lead scoring
As your lead scoring efforts evolve, you will find that both the volume of leads and the complexity of your lead scoring system increase. In interpreting your results and looking for improvements, you will encounter two hurdles: optimizing scaling and optimizing effectiveness.
Scaling optimization offers some simple solutions. If you're on a budget, manual lead scoring using spreadsheets and formulas makes perfect sense. However, when you're ready to pay for the best, there are some fantastic tools available to help you automate the whole process for you.
With the right tool, you can identify patterns in your data that you may have overlooked. This is where predictive lead scoring comes into play. These algorithms can predict which potential customers are qualified and worth dealing with. They might not come cheap, but if your business is serious about improving your lead quality, automated tools can be a powerful addition to your toolkit.
To optimize effectiveness, the most important thing is to make the ongoing evaluation of your lead scoring model an important, regular occurrence. Further improve the defined mechanisms and, if necessary, make significant changes to your assessment model. As with any marketing campaign, this technique can be improved at any time.
Every business on the planet wants qualified leads. What do you dislike when less time is wasted and more conversions are achieved?
The problem is, with so many different lead generators and traffic sources, identifying the key components of a strong prospect can be difficult.
Lead scoring serves as a tool to logically clarify and optimize the process of lead generation so that any small business owner can start implementing it today.
With the right lead scoring model, your company can improve both the quality of your leads and the experience of your users.
Which metrics do you think are most important for lead scoring? Let me know in the comments below!
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