A Perfect 10: Why Lead Scoring Is Important
Early in my career, "lead scoring" called to mind NBA superstar Kareem Abdul-Jabbar rather than a key factor in a lead management strategy. Now, it seems more like a talent show where not everyone makes it to the finale or wins the grand prize.
Like a talent show judge, you assign points — only this score represents a lead’s likelihood to buy based on engagement and other indicating metrics.
Why Is Lead Scoring Important?
Lead scoring is important because it helps you prioritize resources, focusing your sales efforts on the leads most likely to buy your product. The numerical value of a lead score is calculated based on activities or characteristics you've determined to be leading indicators of purchase, like requesting a demo or subscribing to your newsletter.
To break this down further, suppose your ideal customer is a decision-maker in a large company with over 500 staff, specifically a CTO or IT director. This customer ideally downloads product whitepapers or attends your webinars. You’ll input these criteria into your lead scoring software and set a minimum score threshold — let’s say 50.
For each criterion the lead matches, they score points. If they reach 50, it’s worth introducing them to your sales team or adding them to a nurture campaign.
These criteria may be behavioral, like page visits, content engagement, webinar registration, opening email, etc., or demographics, like industry, annual income, location, etc. Typically, you’ll use software to build your lead scoring model, and the leads who align best with your buyer persona get points or scores for each matching criterion.
Benefits of Lead Scoring
- Qualifying prospects who are likely to buy
- Creating campaigns tailored to qualified buyers
- Managing the resources and time of sales and account reps
- Increasing your lead intelligence
- Measuring and optimizing marketing efforts and lead-generation campaigns
- Objectively ranking prospects based on predefined data — reducing error and bias
More importantly, it’s a scalable model. Matt Fraser, Chief Strategy Officer at Digital Web Solutions, says, “There's no lead-scoring Bible. It’s an intuitive process. So you implement your first lead scoring, you’ve tested between marketing and sales, and they realize, ‘Oh, we’re sending them too early, or we’re selling them too late, or we’ve missed the boat on this.’ So then you’re iterating. You have to iterate and test. It’s not like you set it and forget it."
There's no lead-scoring Bible. It’s an intuitive process … You have to iterate and test.
Matt Fraser, Chief Strategy Officer at Digital Web Solutions
Matt's right. Once you get cozy with these facts, lead scoring can be a powerful tool for targeting sales-ready prospects. You’ll be able to determine which factors are most important to your business and assign values when prospects perform activities aligning with them.
Key Components of an Effective Lead Scoring System
Your lead scoring system should have some needed ingredients to succeed. First, create your ideal customer profile (ICP). Review the existing, profitable, and satisfied ones and find their commonalities. This way, you can segment new ones into relevant criteria. You can use interviews or surveys for valuable insights.
Second, you’ll choose a scalable lead scoring software. The feature is often built into CRMs so that you have an all-in-one solution.
Third, you need generous data points. Data points are specific information or traits concerning a lead used to assess their potential conversion. This data can come from a variety of sources, such as:
- Your lead’s website behavior: Click-through rates, shares, content downloads, live chat sessions, etc
- Your lead’s contact history: Records of previous interactions with the business, including emails, social media, phone calls, etc
- Your lead’s demographic information: Their job titles, company size, industry, location, and more
- Your lead’s source: How they found you. From organic searches, referrals, or paid ads
When you have this data, various methodologies for scoring leads within your CRM system exist. Let's examine the most commonly used lead-scoring strategies.
Point-based lead scoring
Andrea Dixon, Head of Marketing for APAC at DocuSign, previously used an alphanumeric matrix to rank leads from A1 to D4, but moved to a strictly numerical matrix, saying it's “simpler for sales to understand that the higher the number, the higher propensity to buy. The lower the number, the lower the propensity to buy."
In the point-based scoring method, you'll attribute a point value to different activities leads perform on your website. Then, you sum and compare the total points. For example, a lead gets five points for accessing the homepage. They get 25 extra points if they visit the Contact Us page and fill out a form.
You may even consider negative scoring when a lead doesn’t meet core criteria. They’ll lose scores and can’t reach the minimum threshold for qualification. To Andrea, it's important when you've got tons of visitors interacting with your website and accumulating scores who might not be the best fit for a sale.
Hot or cold lead scoring
This method works similarly to point-based lead scoring. But there’s a fun twist — you don’t just assign numerical values to user actions, you categorize prospects into hot and cold.
Your hot leads are people who show strong buying intent, such as frequently visiting your website and spending a significant time on the pages. In your software, you may see them indicated as a red flame, thermometer, or box.
Just look at DemandGen's use of Salesforce to indicate hot and cold leads. The company uses a flame or a thumbs-up emoji to indicate whether a lead is high quality. They also incorporate alphabetical grading into their lead scoring model.
On the other hand, cold leads will do the opposite of hot leads, showing minimal and inconsistent engagement. Your software could identify them with a snowflake, blue thermometer, or something else that gives you chills.
This methodology gauges if a customer aligns with the ideal profile you want to convert and their engagement with your business. A lead becomes a high fit based on the industry, demographic, company, and geographic data you've defined.
According to your point-based scoring system, a high fit and high activity indicates that a lead is exploring your product or service, and the chances of moving them through the sales funnel are higher.
These lead-scoring methodologies are often used together to create a more holistic lead-scoring system.
The Symbiotic Relationship Between Lead Scoring and Lead Routing
What is Lead Routing?
Lead routing is the matchmaking aspect of lead management, where you pair scored prospects with the appropriate sales rep. Lead scoring expert Gary Amaral defines it as “the process of distributing incoming leads to your sales staff; each business will likely have its lead routing system based on several different factors.”
Now, pause; there are a few different types of qualified leads, so how do you know which ones go where? Let's chat about those for a moment.
On one hand, you've got your marketing qualified leads (MQLs) — prospects your org's marketing team identified as qualified. Maybe they're avid readers of your newsletter, or they're saving all your Instagram Reels.
Next up, you've got your product-qualified leads (PQLs) — these folks are low-hanging fruit based on their behavior on product trials. These are the leads that are bleeding their 30-day free trials dry.
Lastly, there are sales-qualified leads. SQLs are like the VIPs of leads. They're not just window shopping anymore. They've spent time on your site, downloaded stuff, and maybe even asked for a demo or pricing details. They're giving off signals that they're serious about what you're selling.
Lead Scoring & Routing Tools
The best tool for lead scoring is the one that works best for your business. Several tools are available, like ActiveCampaign, 6sense Revenue AI, VanillaSoft, FreshSales, and Insightly. Each has unique features to help you capture your leads, score them, and effectively deploy your resources.
Most popular lead generation software or CRM software will also have lead scoring capabilities or integrate with more specific tools. Salesforce, HubSpot, and Zoho CRM are all great options for keeping all lead and customer data in one platform while using advanced strategies like lead scoring.
The best lead routing software moves beyond ranking prospects. You'll want one that’s dedicated to that purpose. I like Leadsquared, Distribution Engine, and Freshsales.
Next Steps for Your Organization
Now you know what lead scoring is and what it can do for your organization. What you want to do next is craft your lead scoring model or strategy.
First, imagine your ideal customer. Then, define them using company size, location, industry, and other criteria relevant to your business. Once you have the right tool or technology, you can set score ranges and integrate other systems for a fully functional model.
More importantly, your team must be familiar with it and the software you'll use.
Collaboration workshops will help marketing and sales teams learn and understand each other's perspectives. You may also provide documentation discussing your lead scoring model, criteria, scoring ranges, and definitions for each score.
Regular reviews will enable you to refine the lead scoring model based on the performance and feedback from both teams. It's all about iteration and remaining agile from this point forward.
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