Lead scoring can be a great way to determine a prospective customer’s level of interest in what your company has to offer. But there is more to lead scoring than static knowledge about customer interest.
With a lead scoring program, you can also drive more targeted engagement with prospects, which can speed up the sales cycle and convert your prospects into paying customers.
In this article, you’ll learn how to integrate a robust lead scoring strategy into your sales prospecting process and understand lead scoring best practices, models and benefits.
What is lead scoring?
Sales or marketing lead scoring is the process of assigning values to leads based on their characteristics, behaviors and interactions with your business. This system enables sales and marketing teams to prioritize their efforts and allocate resources more effectively by identifying the leads that are most likely to become paying customers and focusing their attention on them. While each company will ultimately have its own system for determining lead value, factors that come into play with lead scoring include where the lead is in the sales funnel or sales pipeline, the level of interest they show in the company’s offerings and where they fall within a list of pre-set demographic and behavioral criteria.
Since most businesses limit the number of resources they can devote to tracking leads, a lead scoring system is an efficient way to discern how much energy should be put into which leads and when. Ultimately, lead scoring can help you close more deals by enabling you to focus on the leads that are the most promising — 68% of marketers pointed to lead scoring as a top revenue contributor.
4 lead scoring benefits
A well-designed lead scoring system takes much of the subjectivity out of the sales process. With more objective criteria, you can focus on the leads with the greatest chances of converting. Some of the key benefits of a well-designed lead scoring system include:
1) Alignment between sales and marketing
One of the biggest barriers to successful sales occurs when there is a misalignment between marketing and sales. If marketing turns every inbound marketing inquiry over to sales as a potential lead, the pipeline will get clogged with people who either can’t afford the item or service being sold or simply don’t have enough need or interest to buy. However, a good lead scoring system gets marketing and sales on the same page. This helps ensure that every lead marketing passes to the sales funnel is a qualified prospective buyer.
2) Targeted marketing campaigns
Since sales and marketing are aligned about what defines a high-scoring lead, marketing will be able to create and execute marketing plans that successfully attract qualified leads. Insights provided by the lead’s behavior, interests and preferences also allow the marketing team to tailor their content to speak to the lead’s particular pain points.
3) A more efficient sales process
With only qualified leads entering the sales system, the sales team avoids wasting time on non-starter leads and instead focuses on the leads most likely to convert.
4) More revenue
Better leads traveling through the sales process at a faster rate means more sales. That ultimately means more revenue – and a higher likelihood of hitting quota at the end of the month. The relationship between proper lead scoring and an increase in revenue is undeniable.
The bottom line is this: When you adopt a lead scoring system that clearly identifies high-priority prospects, you end up with qualified leads that are likely to convert.
How to score leads in 6 steps
Now that you have an understanding of the benefits of lead scoring, let’s get into the nitty gritty: how to implement an effective lead scoring process.
1) Identify key characteristics
Before you score your leads, you’ll need to have a clear understanding of your ideal customer profile. If you haven’t already, determine which lead characteristics are most important for your business — this could mean demographic data such as job title, company size and industry, as well as behavioral data like pain points, interests and purchase history.
2) Determine behavioral criteria
Next, identify which behaviors are indicative of a high-quality lead. This could mean actions such as website visits, email opens, form completions, content downloads or social media engagement. This kind of behavioral criteria can provide valuable insights into a lead’s engagement level, interests and readiness to make a purchase.
3) Assign point values to characteristics
By assigning point values to the different characteristics and behavioral criteria you’ve defined, you can identify and prioritize the most qualified leads. To start, you’ll want to assign point values to each characteristic based on its importance to your business. For example, you might assign a lead with the job title of CEO more points than a lead with the title of marketing assistant, since that person likely has more decision-making power.
You can also assign additional point values to a lead’s score based on the behavioral criteria above to reflect their level of engagement and interest. These should also be based on importance — for example, a lead who has filled out a form indicating a high level of interest in your product or service might be assigned more points than a lead who has only visited your website.
4) Calculate the conversion rate for all leads
Because your lead score should be rooted in data, you’ll want to come up with a conversion rate to use as a baseline for the lead scoring calculation. Your lead-to-customer conversion rate is equal to the number of new customers divided by the number of leads your team generates. For example, if you acquire 40 customers out of 280 leads, your conversion rate is 14%.
5) Calculate the lead score
Next you’ll want to add up the point values for each lead characteristic and behavior to determine the lead score. Leads with the highest scores should be prioritized because they are the most likely to result in a sale. (See the section below for more details about which lead scoring model may be best for your particular organization.)
The lead score can also help you evaluate the lead’s readiness to convert. For example, a lead who has reached a certain score may be considered a marketing qualified lead, while a lead who has reached another score may be considered a sales qualified lead. This can help determine when to pass a lead to the next stage of the sales process.
6) Compare the point values to your conversion rate
Once you calculate the score for each characteristic and behavior, you’ll want to compare the values to your actual conversion rate. If you notice certain attributes have higher or lower rates than your baseline, you know those characteristics should be included in your lead scoring formula.
For example, if leads who fill out a website form have a 25% close rate, and your baseline conversion rate is 1%, you could award 25 points to anyone who fills out a form. On the other hand, if leads who only visit your website once have a conversion rate of 0.05%, you could award a negative point value given their conversion rate is lower than your baseline. You’ll want to complete this exercise for each attribute or action to ensure your values reflect the actual lead quality.
However, since this is a manual process and not predictive, you’ll need to continuously analyze your formula over time. It’s worth noting that there’s no single formula for turning those point values into percentages since it’s not a 1:1 ratio, but you can work with your analytics or data science team to help determine a proportionate point value.
Lead scoring models
There are many different lead scoring models you can draw from to help calculate your lead scores. Determining which ones make sense for your organization is going to depend on several factors, including the type of data you’re able to collect from current customers, whether you sell B2C or B2B and whether you use email outreach as a primary marketing tool.
1) B2C demographics model
This model requires identifying which user traits are most important for your business. For example, if you are involved in providing home improvement services in a specific area, you’d want to qualify your leads by ZIP code and homeownership status.
You can gather this information by sending leads a landing page questionnaire, asking qualifying questions on incoming calls, or hosting a contest on your social media channels that requires that followers share information about their professional background and interests to enter. Then, assign a number score to each attribute. Attributes that signify a higher likelihood of buying should get a higher score, while those that may signify a reluctance to buy should get a negative score.
On a scale of 1-5, for example, you’ll give a 5 to someone living in your operation ZIP code but subtract five points for anyone who isn’t a homeowner. Or, you might assign a homeowner a 5, but subtract 3 if they are a few miles out of your desired geographic boundaries. If they are an hour or more out of your desired geographic boundaries, you might subtract 5 if the area is just too far to service.
2) B2B company model
If you work in B2B sales, you probably have a certain type of business in mind when you think of your ideal client. Is there a particular industry you target? Does a company need to be a specific size to qualify as a lead? Do your clients need to be based in a certain geographic area?
Pro Tip: You can use search filters within Crunchbase to sort companies by characteristics that indicate readiness to buy, such as recent funding rounds and new leadership hires, which can also be used to help calculate your lead score.
While B2B sales teams need to factor different characteristics into their calculations, the ultimate calculation of the lead score is the same.
3) Email engagement model
The email engagement model involves evaluating how prospects respond to your email outreach. If you see a high number of opens and click-throughs from a particular lead, this is cause to rank them high on your lead score board.
On the other hand, if someone opens emails but doesn’t click through, your rank for their interest level will be lower. Sales teams know that if they focus on the more engaged leads, the ROI of their time and efforts will be higher than if they pursue cold or lukewarm leads.
Pro Tip: Find and connect with key decision-makers on Crunchbase. Use Crunchbase’s contact data and engagement suite to send personalized, targeted messages to the right leads at the right moment.
3 lead scoring best practices
To make the most of your lead scoring system, keep these best practices in mind:
- Pay attention to customer behavior. While lead scoring primarily relies on objective criteria, you should also account for behavioral patterns. Look for patterns in the behaviors of leads that did convert, then seek out similar patterns in leads you are still qualifying. If promising leads typically open up three or more emails before clicking through to your landing page and filling out your demo request form, use that knowledge to identify qualified accounts.
- Make sure the scores you assign correlate to the attributes you value. It’s essential to assign proportionately higher scores to the attributes you value most. If leaving a message for a sales call-back gets a 5, then signing up for a newsletter may deserve a 3. If you assign too many high scores, you lose the triage value of lead scoring.
- Regularly reevaluate scores and models. To keep up with a changing economy and shifting trends, you’ll need to adjust your lead scoring calculation from time to time. For example, if your company pivots to a new industry or introduces a new product, your target audience may shift, requiring a reassessment of your lead scoring models to ensure they align with current market conditions.
Crunchbase can help you score leads
Lead scoring starts with intelligent sales prospecting tools like Crunchbase. Use Crunchbase to quickly discover high-priority accounts, identify key decision-makers and track key buy signals to help inform your lead scoring model.
