Lead Scoring 101

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Lead scoring is just one mechanism that marketers came up to gauge how qualified a lead is to receive more of the offerings that they are sending him, or how qualified he is to receive a first-time offering from the company. Lead scoring is usually done automatically with a lead tracking software, but it can also be done manually.

The criteria for lead scoring are based on the activities of a certain user. These activities are used as measures for that person’s interest in your niche market, or his interest in something that is closely or even remotely related to your niche market. Salespersons then act on that credit score with follow-ups or first-time offerings.

How Lead Scoring Came About

Lead scoring actually is a recent marketing innovation. Previously, marketers rate and classify their leads with a fixed grade--for example, Interested, Somewhat Interested, or Not Interested.

The problem with this is that the individual grades are ambiguous. They do not clearly show how interested the party is with the product; in between the Interested and Somewhat Interested, there exists a few other grades that could look better into the degree of interestedness that the person has. For example, he could be highly interested in the information, but not so highly interested to buy the product. That’s the harsh reality of business.

However, marketers had to live with the frustration and the feeling that they’ve wasted their time on a lead that is said to be “Interested” in the product but is actually interested only in the information. Thus, they had to find some way to gauge the person’s interest in the product. With that, lead scoring was born.

How Lead Scoring Works

This is how lead scoring works. Let us take, for example, a scenario:

John logged in to your piano-learning website and starts browsing your content. Your system automatically assigns him a score of 5. Then he downloads a free lesson in PDF format from your website, signifying that he is willing to find out more about your product offerings, or alternatively, he signs up for your newsletter. You add 10 points to his lead score, which qualifies him for an offer. Thus, in between your weekly or daily newsletters, you send him an offer to sign up for your full product or full piano lesson course. Depending on his response, you can add points to his credit score or keep it as is until he responds favorably.

The bottom line is this: lead scoring was devised to show how high the person is in your hierarchy of potential customers. Instead of an ambiguous grade assignment, you get a quantifiable grade that can accurately grade how interested the person is in your product. It helps you know which marketing techniques to employ or how he is to be handled by your sales team.

Advantages of Lead Scoring

As you could see, lead scoring has several advantages to your marketing campaign.

For example, it greatly enhances the accuracy of your lead tracking. Scores are assigned using the person’s activity as a base. The system will not assign a point or points for a lead without him doing an activity that signifies his interest in the product.

With this score, a lead can be assigned to a sales agent who is specifically tasked to capture his interest more. If he is highly interested or has high points assigned to him by the computer, then he is assigned to the sales agent assigned to offer the product. If he shows a bit of interest or has been assigned a mediocre score, the lead is transferred to a marketer who is assigned to send him e-mails that will make him more interested to buy.

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Establishing the Relationship between Your Demographics and Lead Scoring

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What is lead scoring? This is one of the most important processes in lead management. The goal of this is to ensure that you can narrow down your hundreds or even thousands of leads to a select few. You want to make sure that you only get to deal with those who have higher chances of buying your products or availing of services.

With that, you need to come up with a set of criteria that can help define your sales-ready leads. For example, if you’re selling children’s clothes, you may give more importance to women than men, since the former are fervent shoppers. But you will definitely provide more points for pregnant women. They are most likely to purchase clothes immediately for their upcoming child. It doesn’t matter how many points you associate for every factor. The most important thing is that it becomes a lot easier for you to determine if a lead is ready to make a purchasing decision.

The Use of Demographics

Usually, when you’re assessing your leads for the purpose of scoring, you make use of its demographics. The data will pertain to the characteristics of a certain population. We are talking about their age, income, race, educational background, employment status, and geographical location. We are also referring to the current interests or preferences of individuals.

Businesses make use of demographics to create a demographics profile. A profile is a combination of different characteristics. Using the example we have above, a demographic profile of your lead could be a woman in her 20s and 30s, working class, and pregnant. You can then use your demographic profile to identify the leads that you are going to work on. Of course, those who fit these criteria become your pre-qualified leads.

Types of Demographic Data

There are countless categories of demographic data, and some of them have already been mentioned in this article. Nevertheless, there are more. Because we really can’t discuss everything here, we can just classify them into general ones. First, we have explicit demographic information. As its name implies, these are the ones that are being provided by the lead. These include their name, age, address, telephone number, e-mail address, and race. Depending on what other information that you need, you may also include salary range, educational background, and geographical location here.

Then we have implicit demographic data. These are the information that you can get when you are going to monitor the interest and movements of your leads. Usually, to obtain these data, you have to make use of some tools, such as analytics software. You need to assess how many times a lead visited your website, checked your e-mails, or stayed in your web page. You may also include the number of times he placed a call to your customer service department.

If you are in a brick-and-mortar business, implicit data may include the number of visits a potential customer makes in your shop or the inquiries he placed over certain items. One of the clearest indications of his interest to buy would include testing the item on himself.

You Need to Use Both

There are some companies that would settle for explicit data, simply because the information is already there. Gathering and interpreting your implicit information definitely take a lot of time. However, if you want to make sure that your lead scoring model is comprehensive, you may want to use both. In case you don’t know, there are a number of leads who will not be perfectly honest with their own information. The reason can be deliberate or not. With the use of your implicit data, you can have a clearer picture of their capacity of being a customer to your business.

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5 Key Steps in Developing Your Own Lead Scoring System

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Why do you need to score your leads? Not all leads are created equal. Some of them may have very high interest over your products and services. Thus, they should be given higher priority. Others, on the other hand, may express the same sentiment as the first group. The problem is that they don’t see any particular need of what you’re offering right now. Then, you have leads that should have not been yours after all. They may have been misled by your sales letters or opt-in lists or that they may have completely changed their minds along the way. Their immediate needs have already been met.

The Best Lead Scoring System

There are plenty of lead scoring systems that you can follow. But you must realize that not all of them can be truly effective. Some of them may not work because your business has a completely different need. What you can do, though, is to come up with your own using the guidelines below:

1. Come up with criteria. The first thing to do in coming up with your own lead scoring system is to develop the factors that will help you determine which of them are of great value and which ones are not. One of the best ways is through customer behavior. If you have online leads, for example, you can make use of your lead analytics software. It will tell you where the leads are coming from, how long they stay in your website, the pages they visited, or how many times they visit your page. These data can be beneficial in identifying the level of interest of your leads over your products and services. Nevertheless, make sure that you can employ the help of your entire sales team. Since they are the ones who get to deal with customers and prospects, they already have a good idea of creating customer profile.

2. Weigh all your attributes. Not all of the factors will be very important to you. Some of them are highly indicative of the buying intent of the prospect, while others don’t. To make it easier for you, therefore, you need to assign values to them. It doesn’t matter if it’s numbers or letters. The most important thing is that they stand for something. For instance, you may give those important criteria the highest value and the least important ones the lowest one.

3. Determine their rates. When you have already identified the weights for all attributes, it’s time to identify the percentage of your hot leads. Normally, 20 percent and up will already do well. Then, you need to add up all the weight for your attributes. If the total highest score is 50, your sales leads should have a score of around 40 and up, before they can be considered as high value. Those who don’t meet along this range can be placed into your lead nurturing program.

4. Know what to do with the leads. When you have already categorized all your leads, it’s time to identify what to exactly do with them. Normally, those who are in the hot leads should be dealt with immediately. They are known for their very high conversion rate. There’s little to no amount of persuasion that has to be done. This could be because the product or service is something that definitely meets their needs. You also have to think about those who may belong to the lead nurturing program. What kinds of marketing strategies should you implement with them?

Lead scoring needs to be monitored at all times. Sometimes the factors change as the needs of potential clients change from time to time. Unless you are going to keep up, your system may eventually stop working.


Visit our lead management software sponsor: www.leads360.com