When inbound marketing is implemented, it’s common to focus primarily on bringing in an abundance of leads. When you see those numbers climbing, you get the signal that your strategy and campaigns are working.
But what if only a very small percentage of those leads are actually converting? This is a frustrating problem every marketer and sales team has faced. In some cases, the leads are simply not a fit. In others, hot leads are missed when sales teams are struggling to prioritize the sea of leads. This is where lead scoring comes in.
Lead scoring definition
Lead scoring is the process of assigning each lead generated with a numerical score or value that serves as an indication of the lead quality. Scores are based on multiple attributes including geographic, firmographic or technographic information, activity on your website or ads, and engagement with email, SMS or capture campaigns.
The exact attributes and filters you choose will depend on your business model and ideal customer profile (ICP), but the data points generally fall into two distinct categories:
Implicit data - behavioral data. For example, viewing a pricing or feature page on your website or activities during a free trial.
Explicit data - data confirmed by your lead. For example, information shared in demo request form completes or on the phone to your sales team.
Often your score will include a combination of both implicit and explicit data. Each activity or attribute will be weighted according to importance, and the algorithm will calculate a single-number score.
Most lead scoring software, including Ortto’s scoring tool, will also allow you to set a time decay model to ensure recency. In Ortto, this time decay model is set as a half-life — i.e. the time in which the lead will be half as valuable as it was on the day of the lead’s last interaction. Your half-life will be set by you, usually according to the sales cycle for your business, and will only be applied to behavioral or activty-based attributes.
Why is lead scoring important?
The obvious answer here is that it prioritizes leads for your sales team, allowing them to focus on the low-hanging fruit, getting qualified leads across the line before they move on.
Lead scoring can help your marketing team focus their efforts, too. For example, when lead scores are in place your marketing team can measure the impact of their campaigns by tracking not just the volume of leads, but the volume of high-quality leads. This will quickly show them where advertising dollars are being wasted or the team’s time could be better spent.
In addition, lead scoring can help align sales and marketing teams by ensuring that the leads marketing passes to sales are qualified. Sales and marketing misalignment is a common problem and can cause decay in the relationship between the two departments. With a lead scoring model in place that both parties agree on, this misalignment can be resolved.
A strong lead scoring model can also have a major business impact including increased revenue, decreased time to sale, and even a higher revenue per employee. When leads are highly qualified, every team from marketing to sales, customer support to product, will be clearer on who the best customer is and what they’re looking for.
Should you have one or more lead scores?
In Ortto, users can create multiple lead-scoring models with ease and track them all in real time against Person and Organization profiles. While on the surface this may seem like it’s overcomplicating the issue, it can be incredibly helpful when you’re analyzing data and drawing insights.
Here are a few examples where having more than one lead score could benefit your business:
You want to assess fit and intent
Fit and intent are two of the most common:
Product fit / Buyer persona fit (how closely does this lead match your buyer persona?)
Lead intent (does this lead show signs of intent including pricing page views, offer downloads or demo request form completes?)
With these two scores in place, your sales team could prioritize the leads who are both a product fit and demonstrate a high level of intent. When they move on to those leads showing a high-level intent but lower product fit, they can focus on making a case for a strong product fit (assuming there is one) and can nudge those buyers showing a strong product fit but lower intent across the line with urgency campaigns.
You have multiple buyer personas
Many businesses have multiple buyer personas and a single lead-scoring model simply won’t cover them all. For example, an Edutech business may have both teachers and parents as customers, with different content and campaigns for each audience, or even different sales and marketing departments for each. In this case, having at least two lead scoring models is essential to accurately weigh up the impact of marketing activity and route leads to the right place.
In another example, you may have three tiers of buyers involved in the process. Buyers, influencers, and buyer/users. With multiple scoring options in place, you could score based on specific attributes in each of these categories.
You want a more granular understanding of marketing performance
Setting up multiple lead-scoring models can help you get a more granular understanding of how different campaigns, channels, and messages are performing. For example, if you have a lead magnet like an ebook and you’re running lead capture ads on social media, you may discover that this campaign brings in leads who are a strong product fit but don’t show much intent.
With this information, you can start to assess how you could tweak your campaigns, nurture journeys, or sales strategies to focus on intent.
You are focused on upselling
Perhaps your business offers a suite of products and you’ve recently announced a new offering, so your sales team has switched their focus to upselling. In this case, creating a lead scoring model for existing customers who have a high likelihood to expand will be essential to your success.
You’re just getting started
When you’re just starting out with lead scoring or refreshing your strategy, it can be helpful to test a few different models before determining which is most effective for predicting conversion.
How to create your lead scoring model
If you’re generating leads and converting even a fraction of them, you’ll be able to start identifying the right attributes for your lead-scoring model. Follow these steps to create your lead scoring model.
1. Calculate your conversion rates
Start by calculating your overall conversion rate across all leads. You will want to use this as a baseline or benchmark as you start to identify your top-performing leads and the attributes that indicate a lead is of higher quality.
2. Spot patterns between high-quality leads
Look at your high-value, converted customers and start to identify the attributes they have in common. For example, you may notice that the vast majority of your highest-value customers are in a specific industry or have responded to content, webinars, and other marketing activities about a specific product feature or benefit.
These insights are best developed with both quantitative and qualitative information. Speak to your sales and success teams, and perform customer interviews to answer the following questions:
What do the leads who convert have in common?
Is there a specific type of lead that your sales team reports as being the quickest to convert?
Which campaigns or messages are the most likely to lead to conversions?
What common attributes or activities exist between your most self-sufficient customers?
Are there any common attributes between customers who have expanded?
3. Calculate the weighting of each attribute and activity
Once you have identified attributes and activities, compare the conversion rate of each to identify point values. For example, if the customers who requested a demo have a 25% close rate and the customers who attended a webinar have a 5% close rate, you will know that the activity ‘Requested a demo’ should be 5x higher than the activity ‘Attended webinar.’ Learn more about how to set this up in Ortto here.
4. Identify a half-life
Your half-life will be the point at which the lead becomes half as valuable. To identify this, calculate an overall time to conversion or average buying cycle and divide it by two. This will give you a half-life that can be used against each of the Activities in your scores.
5. Measure success
In the early stages, you will want to ensure you are tracking how many of your qualified leads actually convert, especially if you have more than one lead-scoring model in place. Sales and marketing should keep close to the numbers and tweak attributes, activities, and weights according to the conversion rate on each lead type.
Lead scoring is a critical component to measuring success, prioritizing sales teams' time, and understanding your customer’s journey. In Ortto, you can easily set up multiple lead scoring models to ensure your sales and marketing teams are able to prioritize, track progress, and work towards a meaningful goal.
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