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What Is Lead Scoring?

Julie Thompson
Julie Thompson
business.com Contributing Writer
Updated Feb 15, 2022

Lead scoring can help prioritize your top leads, increase conversions, and improve communication between your marketing and sales departments.

Generating leads is critical to sustain your business. However, the more leads you have, the more discerning you have to be. While your company’s marketing group focuses on generating more sales leads, it’s up to the sales team to close the deal. It sounds like a simple process with each department playing to its strengths, but it’s not that easy. 

The sales team can become frustrated with the marketing group for providing irrelevant leads, and marketing can blame sales for its lack of progress – leading to conflict between marketing and sales. With two departments that significantly benefit from working together, it’s vital to give each group the tools they need for success.

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What is lead scoring?

Lead scoring is a process that ranks potential customers using criteria to determine which leads are ready to make a purchase and which leads are unqualified. 

Sales and marketing teams use lead scoring the most, but it can be helpful to all departments within your organization. Lead scoring prioritizes leads, improves company communication and productivity, decreases customer acquisition costs and increases overall revenue.

Lead scoring can offer solutions for generating traffic, researching high-quality leads and accurately measuring ROI.

FYIFYI: Lead scoring prioritizes leads, improves company productivity and communication, decreases customer acquisition costs, and increases overall revenue.

How does lead scoring work?

Lead scoring requires creating specific criteria for your business’s industry or customer base, and assigning a number value (usually 1-100) for those data points. If you’re new to lead scoring and are unsure of what criteria to include, start with BANT (budget, authority, need and timeline). Using these data points is a great starting point for prioritizing leads.

Take note of key factors from both conversion sources and critical areas that keep leads from completing a purchase. The total a lead receives will help you determine a conversion point threshold across all leads. The higher a lead’s points, the more likely they will buy.

Also, take into consideration lead-scoring patterns. For example, if a customer converts 100% of the time after watching a webinar, that lead should be given priority even if it doesn’t meet the conversion point threshold.

Once you set thresholds, use this data to connect to your preferred customer relationship management (CRM) software. The CRM system can send you a real-time notification when a lead meets the point threshold, allowing you to follow up with them before a competitor does.

Contemplate creating visual charts for your lead-scoring system to improve lead-scoring accuracy across multiple departments.

Implementing lead scoring within your business allows you to rely on data instead of your thoughts about each lead’s potential success.

TipTip: If you’re in the market for a CRM provider, check out our recommendations of the best CRM software solutions.

Benefits of lead scoring

The time you invest in creating lead-scoring models can save you high costs in general work hours, lead generation and advertising avenues. These are the top benefits of lead scoring:

  • Increased sales efficiency: With a follow-up list full of qualified leads that meet the lead-scoring threshold, your sales team can spend more time closing sales qualified leads (SQL) and less time with contacts who aren’t ready to buy.
  • Lower customer acquisition costs: Marketers can quickly remove marketing dollars from channels that are below the lead-scoring threshold.
  • Improved conversion rates: Using a lead-scoring threshold, your sales personnel can speak directly to those expected to buy. Automated drip emails keep leads with a lower score engaged until they’re ready to purchase.
  • Increased revenue: Research found that close sales rates increased by 30 percent after implementing lead scoring, with an 18% revenue increase.
  • Collaboration between departments: Since lead scoring provides a factual score for each lead, marketers can rest assured they are providing practical leads to sales, while salespeople can confidently close the deal.
  • Advanced targeting: Use lead-scoring data to increase landing page conversions, and locate online forums and social media pages that your customers use the most.
  • Stronger relationships: Lead scoring improves segmentation among your leads. Engaging with lead data can help you better understand lead connections and correlations. Personalizing content, sales calls and customer service requests can create both repeat customers and glowing referrals.

How do you build a lead-scoring model?

You will have a unique lead-scoring system based on your company’s goals. However, the basic principles of lead scoring are similar. Here are some factors to consider when building a lead-scoring model.

Lead profiles

Before you can understand lead quality, you must first understand your customer. Create segments within your leads by separating buyers into buyer personas. Make these segments using existing customer data and overall observations of your sales.

Separate your leads into two groups: converted leads and dead leads. Use your lead-scoring criteria to rank all your converted leads. If you already have data on leads, it will be easier to compile lead scoring and determine the leads with the highest conversion rate.

Lead-scoring categories

The main categories of lead scoring are demographic and firmographic, behavioral, email engagement data and social engagement. 

  1. Demographic and firmographic: Demographic and firmographic data is information related to location, industry, company size and job title. This detailed data can be researched through a website or social media, or volunteered through an online form. It provides little help in scoring, whereas behavior and email engagement are better determiners. Keeping demographic data to four or five categories is considered sufficient.
  1. Behavioral: Behavioral data refers to how a lead interacts with your company. Measure implicit data by how a lead visits your website, starts a free trial, engages with your social media or signs up for additional services. A CRM can track a customer’s journey step by step, giving you the data you need to score your leads accurately.
  1. Email engagement: Lead scoring assigns points to leads based on open rates and click rates. With lead-scoring automation software, you can keep your sales team updated by setting an expiration date on email engagement. Ultimately, your sales cycle should determine your expiration dates. 
  1. Social engagement: This kind of data shows how active leads are on your social media networks. Are they commenting, sharing posts or clicking on links? By narrowing down which social media network your leads spend the most time on, you can help divert advertising dollars and provide conversation starters for your sales team.

    For example, if a lead stops opening or clicking on links from your marketing emails, their lead score can be adjusted by issuing negative points. Lowering their lead score can help accurately measure their current conversion probability. Other actions worthy of negative points include personal email addresses – if you are mainly B2B – and leads that provide a lack of information or look like spam.

    However, if a lead increases their opens and clicks, it might indicate they are ready to buy. This would cause their score to rise. A sharp rise in lead scoring should trigger a sales follow up.

Keep in mind that these examples are merely starting points. Have your team brainstorm ways to collect data that fits your specific business.

Lead criteria

After you decide on your lead criteria, you’ll need to do some testing to see which criteria will most likely lead to a successful sale. Use any marketing data you have, and strive to create more detailed marketing attribution and contacts reports so you can narrow down lead-scoring opportunities.

You might find that leads who sign up for your webinar have a high conversion rate, but those who join your email list are slow to convert. You might also find that company size or a specific job title has a higher conversion rate.

FYIFYI: It’s essential to gather insight from your sales team and interact with your customers as much as possible. The more in-depth your relationships, the easier it will be to sell products and services.

Tests of lead quality

Once you’ve given a score to every lead, each lead will need to be ranked to determine if that lead is worthwhile to pursue – considering staffing and marketing dollars. However, ranking leads on a spreadsheet shouldn’t be your endpoint. Take all leads and allow your sales team time to follow up with each one, regardless of their value on paper. 

After a few weeks, re-examine the same leads and see which ones became customers and which ones didn’t convert. You’ll learn about your customers, and the strengths of your sales and marketing teams.

Using the leads that became customers, take note of the lowest score. This total point value is your lead score threshold: It determines leads that are most likely to convert with the least amount of effort. Focus your marketing efforts on this segmentation and improve processes to convert leads that fall below the threshold.

Did you know?Did you know? It’s vital for sales and marketing to determine the lead-scoring threshold as a team. They should communicate any changes to each other to prevent any sales funnel leaks. Sales and marketing can also note any red flags to stop leads from receiving a deceptive high score.

Process automations

If you think lead scoring sounds ideal but aren’t sure how to find the time to accomplish it, you’re not alone. Fortunately, automated features within CRMs can do the work for you. To learn more about CRM systems with lead-scoring automation features, check out our reviews of Salesforce (Pardot) and FreshWorks.

After entering lead-scoring criteria into the CRM software, the tool will score leads automatically and keep track of scores as they change. Predictive scoring utilizes an algorithm with thousands of criteria to identify the best leads automatically.

This way, you can quickly prioritize leads based on your qualified leads and what your dead leads have in common. Plus, the longer you use predictive scoring, the smarter it gets – optimizing your lead scoring along the way.

FYIFYI: Successful lead scoring can save your business money, boost revenue, strengthen customer relationships, and foster teamwork among sales and marketing departments. Consider a CRM solution to automate lead scoring and streamline the process of successfully converting leads into customers.

Lead-scoring best practices

When implementing lead scoring, here are a few things to keep in mind: 

  • Don’t get caught up in the details. If you’re creating lead scoring for the first time or are new to the process, keep the criteria simple. If you score too many data points, leads may be too similar in score – this defeats the purpose. Frequently adjust your criteria and rules to keep your lead scoring accurate as your business evolves.
  • Decide on processes. Before implementing lead scoring, decide what actions you’ll take if the lead meets the threshold and what you’ll do with leads who have low scores. Depending on your team’s size and automation budget, it’s standard to follow up with marketing qualified leads (MQL) and use drip email to nurture leads.
  • Define a follow-up schedule. By separating leads into two categories, you can determine a consistent follow-up schedule. For example, high-quality leads could receive a phone call within 24 hours, while low-scoring leads would receive an automated email within one week.
  • Connect your CRM. Check to see if your current CRM has lead-scoring integration. Automating lead-scoring data through your CRM can notify sales and marketing teams to contact leads who meet the threshold. It can also identify prospects who need more time to move from interest to intent.
  • Frequently run lead-scoring reports. Lead scoring isn’t foolproof. Run CRM reports frequently to see if your lead scores match your conversions. If you notice any shifts in your target customer, see if your MQL-to-conversion-rate is on the decline. Conversion decreases will require you to update criteria and analyze current lead-scoring models.
  • Clean up data. Some leads will never convert to customers. By removing their data from the system, you can free up space for prospects and hone in on accurate lead-scoring criteria. Automated lead-scoring software can disqualify leads for you, so you won’t have to waste time marketing to irrelevant contacts.
Image Credit:

Ridofranz / Getty Images

Julie Thompson
Julie Thompson
business.com Contributing Writer
Julie Thompson is a professional content writer who has worked with a diverse group of professional clients, including online agencies, tech startups and global entrepreneurs. Julie has also written articles covering current business trends, compliance, and finance.