What is Lead Scoring? Using Data for Your SMB Leads
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.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block} Be honest; how many of your leads convert to actual customers? If you’re struggling to find and cater to your target audience, don’t worry! I’ve seen several companies struggle with this. My name is AJ! I recently sold my company for multiple seven figures . Now, I strive to help other entrepreneurs! One thing that took my business from struggling to booming was lead scoring! What do I mean by lead scoring? Keep reading if you want more sales and higher ROIs!
Key Takeaways
Lead scoring is a crucial process that ranks prospects based on the likelihood of becoming actual customers.
Lead scoring can help prioritize leads, optimize resource allocation, and improve sales efficiency.
The foundation of effective lead scoring lies in data use, where lead attributes predict their potential value.
SMBs can leverage lead scoring to nurture highly relevant leads, accelerating sales conversions.
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/*! elementor - v3.16.0 - 20-09-2023 */
.elementor-heading-title{padding:0;margin:0;line-height:1}.elementor-widget-heading .elementor-heading-title[class*=elementor-size-]>a{color:inherit;font-size:inherit;line-height:inherit}.elementor-widget-heading .elementor-heading-title.elementor-size-small{font-size:15px}.elementor-widget-heading .elementor-heading-title.elementor-size-medium{font-size:19px}.elementor-widget-heading .elementor-heading-title.elementor-size-large{font-size:29px}.elementor-widget-heading .elementor-heading-title.elementor-size-xl{font-size:39px}.elementor-widget-heading .elementor-heading-title.elementor-size-xxl{font-size:59px} What is Lead Scoring?
Lead scoring is when marketing and sales teams assign values to each prospective customer the business generates. Usually, a lead scoring system uses numerical points to rank prospective customers. Businesses use various attributes to determine a lead score. For instance, some of the most common scoring attributes include the following things: Demographics Professional information Address/Location Ways in which the prospective customer interacts with your brand online Website Activity There are several advantages to lead scoring models (I’ll cover those in the next section). However, companies score leads primarily because they prioritize prospective customers and allow sales and marketing teams to respond to each person appropriately. As a result, companies increase conversion rates and develop more meaningful conversations with their prospective and current customers.
Lead Scoring Benefits
As previously mentioned, there are numerous benefits of lead scoring. A common misconception is that lead scoring only impacts sales teams. However, an effective lead scoring system benefits your marketing and sales teams! Here are the advantages of implementing a lead scoring model! Increased Sales Efficiency Lead scoring ensures your sales team works efficiently because they only send time on qualified prospects. Therefore, your agents don’t waste time chasing low-quality leads. Instead, sales reps can offer the best customer experience by providing excellent communication depending on where each prospect is in the sales process. As a result, your sales department shortens the sales cycle and improves efficiency! Increased Marketing Effectiveness Marketing efforts are a crucial aspect of any business. You must target and create messages that resonate with your ideal customer. Fortunately, lead scoring can help your marketing team identify which campaigns and channels attract the highest quality leads. For example, say one of your business’s marketing campaigns generates 150 leads. However, according to your lead scoring strategy, only 30 of those leads can potentially convert to paying customers. Your second marketing campaign, which uses paid ads online, generates 60 high-quality leads. These scores indicate which channel your company should utilize more often to generate the best leads. Improved Sales and Marketing Alignment Your sales and marketing teams MUST be on the same page if you want to increase conversion rates and attract high-quality leads. With an efficient lead scoring process, your company has set rules that clearly define what a sales-ready prospect looks like. Therefore, any prospect the marketing department passes on to the sales team must qualify under your company’s rules. This system ensures marketing teams create targeted campaigns that attract the ideal prospects. Increased Sales and Higher Conversion Sales One of the most well-known benefits of a lead scoring process is that it can lead to higher conversion rates. How? Lead scoring ensures your business focuses on high-quality prospects. Further, when you assign data points correctly, it tells your sales agents which prospective customers are most ready to purchase. As a result, your team doesn’t come off as annoying to low-quality leads or pressure buyers. Better Revenue Forecasting Lead scoring helps your business forecast future sales revenue accurately. Once you correctly score the leads in your CRM, you can use this data to determine how much money you should expect from your marketing and sales efforts. Additionally, lead scoring tells you which campaigns and channels have been most successful in generating conversions. With this knowledge, you can assess where you should spend your marketing budget going forward. Predictive lead scoring is an excellent strategy to ensure your team makes data-driven decisions rather than guesses. ROI Growth Lastly, lead scoring models can help boost your company’s return on investments (ROIs). As previously mentioned, lead scoring helps your marketing department create campaigns that cater to the right audience. Therefore, your business avoids wasting money on ineffective ads that don’t target the right person. So, when you score leads, your teams understand which attributes make a person more likely to buy your products and services. As a result, your marketing and sales techniques are catered toward your target audience, and you spend your money wisely!
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Pro Tip #1: Use predictive scoring software to streamline the lead scoring process!
- AJ Silber
The Lead Scoring System Explained
What does an effective lead scoring model look like? Is it hard to implement lead scoring? While lead scoring may take some trial and error to perfect for your business, there are a couple of steps you can take to simplify the process. For instance, here are two things you and your team can do to starting implementing lead scoring: Establish buyer personas for your target audience Assign point values to lead criteria Below, I’ll explain each of these steps in greater detail! Establish buyer personas Establishing buyer personas is a crucial step in honing your lead scoring model. A buyer persona is a semi-fictional representation of your ideal customer based on market research and actual data about your existing customers, including the following details: Customer demographics Behavior patterns Motivations Goals Your teams can use this information to group similar individuals, creating a clear picture of who makes up your target audience. Every business owner must consider establishing buyer personas for lead scoring. With these personas, you can accurately predict which leads are likely to convert to customers , as they closely resemble your ideal buyer. Also, assigning higher scores to leads that match your buyer personas ensures your sales and marketing teams focus on the best potential opportunities , increasing overall efficiency. This strategic approach results in higher conversion rates and a more robust return on investment for your sales and marketing initiatives. Assign values to lead criteria Once you have established your buyer personas, the next step is to assign point values to different lead criteria. These criteria can include factors such as: Job title Company size Industry Website behavior Email Engagement By assigning a score to each of these factors based on their importance in determining a quality lead, you create a system that automatically prioritizes leads for your team. For example, if a lead has a high-level job title and is from a large company in an industry your business typically targets, they may receive a higher score. On the other hand, someone who lacks these characteristics may receive a lower score. By setting up this scoring criteria, you eliminate any confusion or subjectivity that can arise when determining which leads are the best fit for your business.
Lead Scoring Model
There are numerous lead scoring models your company can utilize. It’s critical to collect customer data from demographic information to how your customer base interacts with email marketing content. Do you have to use all of the lead scoring models I present? No, some may not fit with your business or industry. Still, using some type of system to score leads is essential. Let’s take a look at the different models you can use! Demographic Info Does your business sell products to specific demographics? For instance, some companies exclusively produce toys for kids. Therefore, these businesses wouldn’t want or need to target older people because they (most likely) do not need their products. On your landing pages, asking demographic questions is crucial if you’re catering to a specific type of person. Then, as people fill out the form, you can analyze the data and see how well people fit your target audience criteria. Additionally, collecting demographic information allows sales teams to subtract points from people outside the category you’re trying to sell to. Company Info If you’re a B2B organization, collecting company information is helpful. On your landing pages, you can ask questions like: How big is your company? What type of business do you operate? What industry is your company in? Are you a B2B or B2C organization? Depending on each client’s answers, you can award points to leads who fit with your target audience. Further, your sales team should remove points from leads who don’t fit your ideal criteria. Online Behavior Tracking how prospective and current customers interact with your company’s website and social media platforms is critical. Collecting this data tells you how interested certain people are in your products or services. Here are some examples of online behavior you should look for and track: The offers people downloaded or used The number of deals each customer uses The web pages they visited The number of web pages they visited Whether or not the person has been to your website before When assigning lead scores, most companies give more points to people who filled out forms or visited high-value pages , like the pricing or shopping page. Also, it’s wise to give more points to leads who visited your website multiple times than those who only interacted with your brand once. Email Engagement Email marketing is an efficient way to collect customer data and learn about what messages resonate with them. Therefore, when someone signs up for your company’s email newsletter, assigning them more points when lead scoring is critical. On the other hand, if someone unsubscribes from email marketing content, it shows they’re not interested in your products or services. As a result, you should subtract points. Lastly, giving more points to leads who click through high-value emails , such as exclusive discounts, is wise. Social Engagement If your target buyer persona is someone active on social media outlets, your lead scoring system needs to consider this. Some questions to ask about potential leads and social media activity include the following: How many times has a lead engaged with your social media outlets? What types of content did the prospective customer interact with most? How often did a lead share an Instagram post or retweet your company’s content? Based on how many followers and interactions the prospective customer gets on their social media activity, consider giving these individuals higher lead scores. Spam Detection Unfortunately, spam messages and activity are things every business must deal with. In your lead scoring model, it’s best to assign negative scoring to forms that look like they could be spam. It’s impossible to catch every single spam activity when scoring leads. However, if you watch for the obvious times, it helps maintain your customer data and continue attracting the right kind of buyer!
What is Lead Scoring in CRM?
In a customer relationship management ( CRM ) system, lead scoring is when software automatically assigns and filters prospective customers. Therefore, employees don’t have to manually sort through each lead, assign points, and hand them to the marketing department. Instead, CRM software handles this often time-consuming process. The benefits of lead scoring software in a CRM system include the following: Saves your employees time Fewer mistakes (assigning the incorrect values, forgetting a lead, etc.) Faster sales process It is easier to see where each prospect is in the buyer’s journey CRMs are beneficial for several reasons. Accurate and fast predictive lead scoring is one reason to implement CRM software!
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Pro Tip #2: Have your sales and marketing sit together to create rules that distinguish qualified leads from poor ones.
- AJ Silber
How to Choose Lead Scoring Metrics
Lead scoring efforts are crucial. But how do you decide on the metrics to assign points? There are four steps to choosing the right lead scoring metrics. Let’s look at each step in closer detail! Step 1: Use a CRM First things first, it’s essential to implement a CRM system. CRM software collects and organizes customer data better than your employees can. Also, most CRMs include lead scoring software , making life MUCH easier for your sales and marketing departments. Further, changing lead scoring criteria whenever you need with a CRM system is simple. Simply put, CRM software collects and organizes valuable lead scoring data efficiently. Step 2: Talk to Your Sales Team Step two is talking to your sales reps. These employees talk with customers who were successfully converted to paying customers and those who weren’t. Therefore, they have a good idea of the marketing techniques that encourage higher conversion rates. Your sales team understands your target audience better than most people , so it’s crucial to rely on them to determine what attributes make up qualified leads. Step 3: Talk with Customers Your customers are the ones who experience your sales team and their techniques firsthand. Therefore, they know what persuaded them to purchase your products or services. Conduct interviews with customers and ask what they think persuaded them to buy from your company. During this process, ensure you interview customers with long and short sales cycles. That way, you get various perspectives and collect more data. Step 4: Review Your Analytics Lastly, review your analytics. Analyzing your company’s data helps you learn from your mistakes and discover valuable customer insights. Your website, CRM, and social media platforms track various metrics that can help you determine what engages potential customers the most. For example, these systems collect data on how many people click on a specific page, use an exclusive offer time, and track the time spent on each webpage. Reviewing this data helps create a comprehensive lead scoring system based on actual customer data.
How to Expand on Lead Scoring
One predictive lead scoring platform is excellent. Still, you and your team may decide that you want to expand your data points to get a clearer picture of your target audience. Here are two ways to expand lead scoring models! Use Fit & Interest Separately When a customer fits your lead scoring rules, they are assigned a higher point value. For instance, when customers are a good fit, they meet criteria like: They live in the ideal region The business is in the right industry The client works in the right role On the other hand, interest level analyzes aspects like how engaged a customer is with your social media content. If fit and interest are both high priorities, it’s best to create an engagement score and a fit score. That way, your sales team can prioritize contacts with high point values in each category. Develop Multiple Customer Personas It’s also helpful to create multiple buyer personas because it’s very unlikely your business caters exclusively to one type of customer. Use your lead scoring tools to collect and organize data on the various customer segments who shop with you. Then, you can assign specific leads to certain sales reps who are best suited to handle their needs.
How to Calculate Lead Score
There are a few ways to calculate lead scores, including the following methods: Manually Logistic regression Predictive lead scoring Here’s what you need to know about each of these techniques! Manual Lead Score Manually calculating lead scores is one of the most challenging ways to assign points to prospective customers. However, if you have a small client base , this method is feasible. The steps to manually collecting lead scores are as follows: Calculate the lead-to-customer conversion rate of all your leads (the number of new customers divided by the number of leads you generate). Choose the attributes for customers who you think were higher quality leads (base these on those with the highest conversions) Calculate individual close rates of each attribute (figure out how many people become qualified leads based on their actions). Compare the close rates of each attribute with your overall close rate and assign points accordingly. Logistic Regression Lead Scoring Logistic regression uses data mining to determine your company’s close rate. Further, this method for lead scoring utilizes an Excel formula that determines the probability of a lead becoming a customer. Logistic regression is a more accurate way of calculating a lead’s score (compared to manually doing it). Predictive Lead Scoring Sales reps can also use predictive lead scoring to determine the final lead score of each customer. Predictive lead scoring systems utilize AI to work through thousands of data pieces to prioritize leads who are most likely to become a customer. The best aspect of a predictive lead scoring tool is that it gets smarter as it learns about your business and customer base. Therefore, your lead follow-up strategy optimizes itself, saving your sales reps a lot of time and energy !
Lead Scoring Tips
Tip 1: Keep Updating Your Lead Scoring Model Your lead scoring model should never be static. Always ensure you are adjusting it according to changes in: Customer behavior Market trends Your business model As your company grows, your ideal customer profile might change. Tip 2: Involve Both Marketing and Sales Lead scoring should not be a solitary activity performed by a single department. Both your marketing and sales teams should be actively involved in the process. They need to collaborate to define and agree on what constitutes a quality lead. Tip 3: Don’t Overcomplicate the Process While it’s essential to have a comprehensive lead scoring model, don’t overcomplicate it. Having too many scoring parameters can be confusing and may not necessarily result in better leads.
Final Thoughts on Lead Scores
Is lead scoring important? In short, YES! Customers with a higher lead score are more likely to convert to paying customers. Also, setting clear point value parameters ensures marketing and sales reps know how valuable each customer is. What attributes does your company use for leading scoring? Let us know in the comments section!
The post What is Lead Scoring? Using Data for Your SMB Leads appeared first on Small Business Bonfire .
