What is Lead Scoring? An In-Depth Guide
May 18, 2023
Your leads are an incredibly important part of your business. While they aren’t yet fully-fledged customers, they represent the future of your customer base. What you do with your leads today will have a direct impact on the success of your business tomorrow.
As a result, you need to get to know your leads. Not all leads are equal. You need to understand which ones are likely to become loyal, paying customers, and which ones will almost never spend a penny with your brand. This is what lead scoring is for.
Before we dive into the meat and potatoes of what lead scoring is and how it works, check out these stats:
- This survey by Kentico found that 38% of businesses experienced higher lead-to-opportunity conversion rates due to lead scoring
- Another study found that businesses using lead scoring saw a 77% boost in lead generation ROI compared to those who weren’t using it
- In yet another study, we learned that 68% of “highly effective and efficient” marketers said their success was down to lead-scoring processes
Pretty impressive, right? And yet, despite all this, only 44% of companies are actually using lead scoring. That means if you can start harnessing this powerful tool, you’ll gain a critical edge over a chunk of your competitors.
In this guide, we’ll show you how to do that. We’ll explain what is the lead scoring model, how it works, and the value of it for businesses, and then we’ll show you a step-by-step process of how to implement it in your own business. Let’s get started.
What exactly is lead scoring?
Lead scoring is the process of giving your inbound leads a numerical score that shows how likely they are to buy what you’re offering. These scores are based on a wide range of factors and typically work by assigning points to actions that are considered valuable. Since some leads are much more promising than others, scoring in this way helps you focus your efforts where they’re most useful.
Why is lead scoring important for modern marketing and sales?
Lead scoring is important for a ton of reasons. Let’s check out some of the main ones.
Better conversion rates
Lead scoring is designed to help you identify the leads that already have the best chance of converting and then increase those chances even further by building more tailored and specific strategies and campaigns.
Use your time and resources more wisely
Lead scoring system also helps your marketing and sales teams identify which leads are more likely to convert, which allows them to focus their time, energy, and resources on these leads rather than wasting time on leads that are unlikely to ever make a purchase.
Bring marketing and sales closer
Marketing and sales are two sides of the same coin, and in a healthy organization, these two departments need to work together successfully and in harmony. Lead scoring helps make this possible — setting clearly defined criteria for how to assess and qualify leads so marketing and sales reps are aligned and able to work together to guide and nurture those leads.
Better targeting and personalization
Lead scoring allows you to understand your customers more deeply — scoring them across a range of different attributes and behaviors. With this enhanced understanding of what makes your customers tick, you can create more personalized and targeted communications and campaigns that connect with your customers’ pain points and personal interests.
This way, you can deliver a more rewarding customer experience, boosting engagement, and ultimately leading to more conversions.
The lead scoring process — laying the foundations
Before you even begin the lead scoring process, you need to lay the right foundations. Lead scoring is heavily reliant on data, and without sufficient amounts of high-quality, relevant data about your leads and customers, it simply won’t work.
This means the very first step in your lead-scoring journey is to spend time collecting data. There are many different ways to do this, and here are some of the most common.
Data your customers provide
Your customers will often volunteer a lot of useful data by themselves if you ask nicely. Good places to do this include forms, landing pages, chatbot interactions, email signup forms, gated content, and more.
Asking for information like your customer’s name, location, company size, industry, and job title can net you a ton of valuable information straight away.
Another option here is to send out questionnaires and surveys to your customers and leads, specifically asking for information about their pain points, interests, priorities, buying intentions, and more. It usually helps to offer some kind of incentive for completing the questionnaire, like a free resource or voucher.
Marketers today are spoiled by a wealth of powerful and varied analytics tools. These tools allow you to track your customers’ and leads’ behavior across your website and apps. Metrics like the time they spend on your pages, how often they bounce, the content they download, and how many pages they visit can all give you very useful insights for lead scoring.
Email engagement data
Email marketing platforms like Mailchimp and Klaviyo are excellent sources of information about your leads. They can show you how often leads open your emails, how often they click through, how often they reply, and more. By getting a handle on how much and how often a lead is engaging with you via email, you’ll lay a solid foundation for lead scoring.
Data from your CRM
Customer Relationship Management (CRM) platforms are analytics machines. They pull all the existing data on your leads together in one centralized place, allowing you to gain a clearer overall picture of what your leads are doing, where they are in the buyer’s journey, and their history with your brand.
You don’t have to collect all data yourself. It’s also possible to collect data from third-party sources like data providers and government reports. While this data won’t directly relate to individual leads, it can provide some extremely useful context around things like industry trends and demographics.
Customer service and sales feedback
Your customer service and sales teams have a unique insight into your leads because they speak to them directly. Ask these team members for feedback — what have they learned from their interactions with your leads? This can shore up some interesting information to inform your lead scoring.
How to score leads: A 6-step guide
So how does the lead scoring system actually work? In this section, we’ll walk you through the 6 steps that are typically involved in identifying and scoring your leads.
Step 1: Set a benchmark
The first step in your lead-scoring journey is to gain an idea of what you’re aiming for. What does your ideal lead look like? This will establish a benchmark to aim for, a gold standard to compare all of your leads to.
A good place to start here is by defining an ideal customer profile, or ICP. This process can take some time and involves taking a deep dive into all your existing customer data and knowledge. Your ICP is essentially an avatar of the perfect customer, the ideal combination of company size, industry, budget, age, job title, and other attributes. Remember that your ICP will change over time, and as you acquire new data on your customers.
Another thing to calculate here is something called the lead-to-customer conversion rate. This is calculated as follows:
Lead-to-customer conversion rate = the number of new customers/the number of leads generated
This shows you how often leads typically convert, which will give you a benchmark for assessing how certain actions impact conversion rate.
Step 2: Figure out what you will measure
Lead scoring is all about measuring certain attributes and assigning scores to them to give each lead an overall ranking. For this reason, it’s important to select the right attributes to measure early on in the process so that your scores are as relevant and useful as possible.
There are a number of lead-scoring models you can use here. Let’s explore some of the most common.
The demographics your leads come from can be a strong predictor of how likely they are to convert. For example, if your company is selling walking canes, it’s fairly unlikely that leads in the 18-30 age demographic will be promising future customers (well, maybe in the very distant future).
In this case, you might assign additional lead-scoring points to a customer aged over 75, and deduct points from a 19-year-old lead. It’s useful to ask customers to provide demographic information when you first encounter them, for example when they sign up for your email list.
This method doesn’t just apply to consumers — it can also be used by B2B marketers. Look at the type of organizations that typically buy from you, based on attributes like size, industry, number of employees, revenue, and so on.
What are your leads actually doing? Looking at lead behavior is — unsurprisingly — one of the best ways to predict how viable they are. What steps do leads typically take before they become customers of your business? Some ideas of things to look for include:
- Which pages on your website they visited
- How much time they spent on your website before making a purchase
- Which lead magnets and resources they downloaded
- How many times they interacted with you on social media
- The channels where they discovered your brand
All of these behaviors can be used to predict the likelihood of a lead becoming a customer. Some behaviors might be stronger predictors than others — for example, leads who visit more than 50 pages on your site might have a very high probability of making a purchase.
Engagement and interactions with your brand
The interactions you have with leads on channels like email and social media can be excellent predictors of how likely they are to become customers.
Here are a few things to look at when it comes to email:
- Open rates and clickthrough rates — are they hanging on your every word and devouring every email, or are you an irritating nuisance in their inbox? If it’s the first option, they’re far more likely to be a promising lead.
- Which emails do they click? If a lead is mainly interested in offer promotions they may be closer to making a purchase.
Social media channels are also a good place to look for lead activity. Look at how many times they share, comment, like, or retweet your posts. How often are they clicking the links you share? Just like with email, leads who express more interest in your brand on social media should score higher.
Step 3: Assign point values to different lead attributes and behaviors
Once you’ve identified a number of attributes and behaviors to focus on, it’s time to work out how many points each one is worth.
This is a subjective process, and there’s no inherently right or wrong way to go about it. Some attributes will be linked to higher close rates than others, which means they should deserve a higher score. For example, if your data shows that leads who engage with promotional emails tend to convert more than others, assign this activity more points.
The point-assigning process isn’t simple, and you should take a wide range of data into consideration. It’s also important to try and build a consistent system for scoring. To go back to our previous example, if leads who tend to click through promotional emails convert at a rate 5X higher than those who simply open them, consider awarding 5X more points.
In your entire point system, each attribute or behavior will correspond to a point value based on how well it predicts conversion. If interacting with a sales rep at one stage is highly predictive of future conversion, this might be assigned 100 points. If signing up to your email list is much less strongly associated with conversion, it might only result in 10 points.
Step 4: Scoring leads based on accumulated points
Now that you have a system in place for assigning points to different attributes and activities, it’s time to begin the process of scoring your leads. Each lead in your database should eventually end up with their own overall score, the sum of their performance in each category.
Remember that some actions may result in a negative score — like somebody living in a geographic region that you don’t serve. Some actions may even disqualify a lead from your database.
Step 5: Decide on a lead qualification threshold
When each lead has been assigned a score, it’s time to figure out the threshold for a lead to qualify. Once again, this is an arbitrary and subjective process, but it should remain consistent and firmly rooted in the data you have.
Consult your sales and marketing teams and agree on a qualification threshold. This could be 50 points, 80 points, or 1000 points depending on your system but it should always be tied to the likelihood of a lead to convert.
Once a given lead surpasses the threshold, they’re ready to be passed to the sales team.
Step 6: Refine and tweak your process over time
Lead scoring is not a one-and-done sort of process. The factors involved are fluid and constantly changing over time, so your process has to be adaptable and flexible. You’ll need to constantly review your lead scoring criteria and make changes in response to new data and changing trends. An attribute or behavior that strongly predicts conversion today might be completely different in a few months.
Finding Lead Scoring Success
Lead scoring is an incredibly powerful tool when used correctly. It allows sales and marketing teams to gain valuable insight into what leads are most likely to convert, and then rank leads according to that criteria — this means you can structure your entire marketing and sales process much more efficiently.
Implementing an effective lead scoring system requires a lot of research, data, and input from various people at your company. However, it’s well worth doing, and the research shows it can be extremely productive.
At Driftrock, we can guide you through this process and help you navigate the often complex world of lead scoring to get the very best results for your brand. Get in touch with us to learn more and get started.