Qualifying Prospects Through Lead Scoring
What do top-performing sales teams do better than under-performing sales teams? They don’t waste time selling to prospects who are not ready to buy. Instead, they have a system to identify the highest value prospects in their pipeline and invest their time with those that are most likely to close. Sounds simple, but when your CRM is filled with thousands of leads, knowing who (and who not) to contact, can be a challenge. Hence, the reason lead scoring was created, so that sales teams can prioritize whom to contact. In this article, we will provide an overview of lead scoring concepts and how sales teams can use lead scoring to improve sales performance.
Lead scoring has been around for over a decade. Because of the amount of data that can now be collected on prospects, software can analyze the data and help sales teams find the proverbial needles in the haystack. If your CRM has 1,000 leads, by default, they are not all equal. Some leads will be more likely to buy than others. Sales leaders do not want their sales reps wasting their time calling low likelihood prospects. They want to utilize their limited sales resources in the most efficient and effective way possible. Without a lead scoring system to prioritize your leads, it can be hit or miss.
In its simplest definition, lead scoring is the practice of assigning a ranking to the prospects interest and buying intentions. Usually, it’s a numerical value from a predetermined range, such as 0 to 1,000. Lead scoring provides sales teams with a way to predict the prospect’s readiness to buy based on a combination of data and predefined activities or behaviors. When you can sort your prospects by lead score, you can help your sales team contact the highest value leads more effectively. Because lead scores are dynamic and changing daily, sales teams have an efficient way to determine which leads to follow-up with on a daily basis. The goal of lead scoring is to help sales reps prioritize their sales follow-up and convert leads to clients faster.
Who Won’t Need Lead Scoring
Not every company needs lead scoring. When lead volume is low, there is generally not a need for software to analyze the leads. For startups with limited lead volume, they may not need to score their leads, instead just have a sales rep contact the prospect as soon as they enter the CRM. Lead scoring is needed when the number of leads cannot be efficiently handled by the sales team. Usually, when a company transitions from the startup stage to the growth stage. Two other important questions to consider prior to implementing a lead scoring solution for your organization include:
- Does your sales team have an efficient sales process?
- Do you have enough data on your prospects to implement lead scoring?
If your sales team does not have an efficient sales process, then lead scoring can be a huge mistake. Lead scoring is not a cure for a poor sales process. Without a well-defined sales process, adding lead scoring would be like adding an extra 50-horsepower to a car with four flat tires. Developing a lead scoring system without an optimized sales process will only ensure your sales team mishandles your best leads faster.
Another example of a company that does not need lead scoring is if they are unable to capture data on their prospects. Every sales manager is fond of saying, “If it’s not in the CRM it does not exist.” For lead scoring to work, you will need visibility into all marketing collateral, web pages, landing pages, emails, and social media. If your company lacks the capability to track the digital footprint of your prospects and online visitors, it will be difficult to accurately assess the lead score for your prospects. Some companies have produced volumes and volumes of marketing collateral but failed to digitally track who is consuming what content and how often.
Gain Insights Into Best Customers
Lead scoring does not just help sales reps be more efficient with their time, it also helps sales managers and marketing managers gain insights into who their best clients are and where they come from. Let’s say hypothetically that you determined that your best deals originated with prospects who visited your website three times, attended your webinar, and have a title of VP of Sales. Alternatively, you find that prospects who visited your website ten times, downloaded a white paper, and have the title IT Director, never become customers. This is an over-simplified example, but what lead scoring will do is allow you to identify high-value content, along with high-value behaviors. Without lead scoring, both sales and marketing are flying blind. With lead scoring, you gain insights into what your best customers have in common such as:
- What are the key attributes of your leads than became clients?
- What are the attributes of your leads that didn’t become clients?
- What are the attributes of a good fit or a bad fit for your product or service?
For example, your company may not be a good fit for solo entrepreneurs. Prospects that enter a form with a generic email account as their business mail, such as email@example.com, might not need to be prioritized for follow-up.
Gain Context Before the Sales Call
The goal of lead scoring is to allow sales reps to contact the prospects with high interest and a good fit. But an additional benefit for the sales reps is that they can see WHY they should be calling this prospect. Prior to their initial outreach, for example, sales reps could see the prospects clicked on a marketing email, downloaded a case study, and viewed a specific product page. Not only does the sales rep know this is an engaged prospect, but they have gained relevant context into the prospect’s current situation. With this type of context, the sales rep can craft a more personalized message because they have a more detailed understanding of the prospect’s interest. Without lead scoring, sales reps are guessing which prospects to contact and what message to create.
The Pareto Principle and Lead Scoring
The Pareto principle states that 80% of your results will come from 20% of the causes. It’s the law of the vital few and in sales, it means 20% of your leads will generate 80% of your revenue. With the Pareto principle in mind, lead scoring can help your sales team focus on the 20% that matter. Wasting time with prospects that are not ready to buy is an obstacle every sales rep wants to avoid. The sooner you can identify who the top 20% of your prospects are, the faster you can improve sales performance. By avoiding the bottom 80% of prospects until they are nurtured and ready to buy, sales teams can generate more sales with less effort.
Lead Scoring Isn’t a “Set it and Forget it” Solution
Like everything in sales, lead scoring is constantly evolving. It’s not something you set up one time and you’re done. Because you based your scoring criteria on a set of assumptions, you want to analyze and revise your scoring metrics as needed. How often should you revise your lead scoring model? The answer depends on how long your sales cycle is and how much content your marketing department is producing. For growing companies, updating lead scoring models regularly can be a challenge. But if you are a sales leader and you want to give your sales team the best chance at success, you will continually revise your lead scoring model to ensure that it is helping rather than hindering your sales results.
There are a variety of providers who can provide lead scoring, from simple, tracking email opens and clicks to the highly complex using predictive AI. There is much more detail that could be covered regarding setting up your lead scoring, but we hope this article helped highlight concepts that may have been overlooked. Remember, every company will develop its own unique criteria to score its leads. Lead scoring is not a cure-all for slow sales, but rather a tool that should be utilized to improve sales team efficiency and performance. If you have not tried lead scoring, it is a tool that works, provided you have implemented the right sales process and the proper commitment.
Looking for more advice on lead scoring? We can help, contact us today.
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