The thought of having every lead in your email ist converted into paying customers sounds like a dream come true. Given the amount of information we collect from our leads in this day and age, companies need to notice the difference between an interested customer and someone who is never going to buy what you are selling.
One issue that many companies deal with is the fact that not every one of the leads acquired by the marketing department manages to convert into a paying customer. Moreover, Marketing Sherpa published a study that shows only 27% of the leads a marketing team sends over to the sales team are considered qualified leads.
Of course, without having a system in place that allows you to separate the interested customers from the non-interested ones, it can be challenging. Fortunately, there is a method that can be used by companies to handle their leads. The name behind the solution you have been looking for is lead scoring.
With the use of effective lead scoring, companies can take the assumption out of what their leads are worth and what needs to be accomplished to close them. For this guide, we are going to break down why your business needs lead scoring.
Lead scoring is a framework for assigning point values to leads in your pipeline. The score helps determine behaviors that provide you with indicators on how likely the lead will transform a customer. Take a step back and think about how much time any given lead has used up interacting with your brand online.
These are the types of behaviors that contribute to a lead’s point value and offer you the insight you need on the likelihood of them converting in the future. These leads are usually scored on a scale of 0 to 100. The greater a lead’s score, the more likely they are to make a purchase.
For instance, if a person with a lead score of 75 intends to make a purchase, they are close to becoming a customer. On the other hand, a lead score of 15 could be a sign that the person is merely browsing your website and is not ready to commit to anything. However, every company and its scoring strategy differs from one another, but the end goal of lead scoring is the same. You need to understand who are the most valuable leads and how to close them quicker.
With the advancement of technology, sales teams have become empowered with the data they acquire from software solutions. If that’s the case, then why is lead scoring a metric that should be tracked?
Here are some essential benefits of leading scoring and why having one set up matters.
The score of your lead is the indicator of how close the lead is to becoming a customer. For example, let’s say that two leads have managed to crawl their way through your pipeline. The scores for these two are 10 and 99.
Instead of thinking over who deserves your immediate attention, the one with the higher number instantly gives you the answer. It's what makes lead scoring such an effective method for close deals. Sales representatives can focus on the individuals who need just the right nudge to convert into paying customers instead of dealing with someone who needs careful nurturing. While both of these leads are valuable, the information you acquired on how to approach these two is distinctly different.
If a company doesn’t take the initiative to create an effective lead scoring system, there could be some severe misalignment between the marketing and sales team. When a business has a set of distinctive rules set in place for lead scoring, it can ensure that every lead they pass on to sales is qualifiable. That not only ensures your entire operation runs smoothly but strengthens the bonds between the two departments. Aligning these two departments will facilitate better marketing and sales.
Lead scoring makes the process of differentiating between sales qualified lead (SQL) and marketing qualified lead (MQL) much easier.
IN return, sales representatives have a clear understanding of what they need to do to close somebody. If someone is spending a ton of time researching a specific product, the team can personalize the pitches to reflect their questions or pain points. That eventually leads to a higher conversion rate as your reps communicate their specific interest in the leads.
Now that you’ve managed to grasp why leading scoring is necessary, it is time to understand how to score your leads. As previously mentioned, scores are determined by specific actions done by your leads. Here is an outline of some leading scoring behaviors you can acquire from your analytics.
If your company is only serving customers in a specific city or state, it would be a waste of time to chase after leads who exist internationally. Similar rules apply for how targeting a millennial or Gen Z audience might treat their older generation leads. These sets of leads would represent a negative lead score for being outside of the demographic you are targeting.
Although local leads and the ones in your target demographic would ping a positive score. the data you acquire from demographics such as age or location can assist you with tossing out leads that look nothing like the customer base you are aiming for.
The way your leads become on your website is one of the best indicators of whether or not they have a legitimate interest in what your company is selling. Here are some data points you could potentially track:
Although, not every one of these actions is measured equally. There is a noticeable difference between a person who visits your website three times within the span of a few months against a person who’s been visiting and engaging with your content for weeks. Every one of these touchpoints is valuable to you, but the value is different for every company.
Your website is not the only way how your leads can engage with your company. The way they engage with your brand outside your website can teach you about their purchasing intentions.
For instance, are you aware of which one of your leads is currently following you on a social media platform? Are the leads engaging with your content there?
Using analytical tools will provide you with information on these questions, such as opening an email, click-through rate, and replies are indicators of someone open to receive a call from a sales representative. These touchpoints are essential supplements to your lead scoring strategy. When someone is taking their time to engage with your brand outside of your website, it indicates that they are interested in what you have to say and sell.
This one is especially helpful for any company that is involved in the B2B industry. Along with the information from your lead's roles at their place of business, details such as the company revenue and the number of employees can assist you in understanding if the leads company matches your target audience.
Setting up negative criteria offers you information that can balance your lead score and account for information inaccuracy or the lead's waning interest over time. When factored in, negative criteria grant you a clue when additional contact could cause diminishing returns or push the lead away. Here are some negative points:
It should be noted that there can be hundreds of varying data points for each category. You should consult your team to help identify which criteria best apply to your company. Then get your marketing and sales team to align on determining how each section should be scored. The next step is to determine the threshold that sends a notification to your sales team about a potential lead. The outset will vary as your team improves on identifying the range in which particular leads are most approachable.
Now that you have managed to establish the factors you need for lead scoring, it is time to start calculating the lead score by assigning point values. First, we need to begin by calculating the conversion rate as a baseline. With the baseline, you can look at how each of the previously mentioned factors affects your conversation rate. For instance, if you discover that your visitors are visiting your site more than five times within a month or downloading a free trial, they are more likely to convert. If that's the case, these should be noteworthy point values for your lead score. Keep in mind that there is no correct number for these factors to track. You need to figure out what works for you.
Keeping an eye on metrics translates to a more accurate lead score, although complications can arise. A minimal amount of metrics is easier to handle but will lead to a less refined lead score.
Plus, the significance behind your lead’s action varies depending on your company. For instance, what you consider a 15 could be a 20 for your competitors. These types of variations can be headache-inducing but grants you the ability to develop a lead scoring methodology that is easy to follow for your specific sales strategy.
Aside from tracking your lead's activities, it needs context behind their actions. In an attempt to understand which data points are worth the most. Here are some steps that can help you establish your lead scoring strategy.
A comprehensible customer persona is beneficial for the development of your lead scoring framework. In general, the leads need to look like your target audience in terms of needs and demographics. Whatever manages to click in your head as the best lead score should bear a resemblance to your ideal buyer.
Remember, each customer persona profile is made up of criteria you acquired from your research, anecdotal observations, and existing customer information. The more customer persona you have, the more comprehensive your understanding of your customer will be and result in a more precise leading scoring effort.
Sales reps are the ones who interact directly with your customer every step of the way. Hence, they have critical insight into the factors that qualify a person as someone who is considered a customer for your company. They could potentially provide you with deeper insights into buying indicators that you may have overlooked into incorporating your customer's persona.
If you don’t want to waste too much of your sales rep's valuable time, consider looking over your CRM data. It can offer you some insight into which leads your representatives to decide to follow up with. The CRM data point offers you the crucial moments in every stage of your pipeline that eventually causes your customer to convert. From the most critical sales activities to what qualifies your lead, CRM is excellent for tracking every action from one end to the next.
The customer can offer you detailed information about their buying journey far better than your sales representatives can. Talk to some of the top customers and ask them what earlier steps they took before deciding to commit the purchase. As you talk with your customers more and more, you will start to notice some trends that will help with your leading scoring.
Lead scoring may seem like a massive undertaking to implement, but the benefits you receive from setting up a lead scoring system will immensely benefit your organization. The entire company will become more productive and efficient. SharpSpring has even stated that lead scoring systems lead to a 77% increase in lead generation ROI. If you want your company to improve on closing deals, then start setting up that lead scoring strategy for your organization.
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