Lead Scoring - Why to Use It and How to Build It
Guide to episode
- Today digital leads are different than traditional leads. There are more, they're less qualified, and therefore they require different tactics.
- Using lead scoring requires a robust tech stack of CRM, sales force automation, sales acceleration, and marketing automation.
- Start lead scoring by observing contact and account actions and tallying the weighted values associated with each action.
- Consider account level factors as well.
- Use the score to help sales teams prioritize active leads and deliver the right attention and experience to each one based on where they are in their journey
Hi, I’m Ed Marsh. Welcome to this episode of Signals from the OP. In these videos, I work to share emerging ideas for senior management of middle-market industrial manufacturers - in digestible chunks. Today we’re going to chat about CRM usage and data quality.
Today, I want to dig into lead scoring and how it could/should be used by manufacturers to improve their lead management, marketing, and sales.
Let’s start with two points of context.
First, let’s talk about how leads have changed over the last several years. I’ll frequently chat with the CEOs of industrial manufacturers who tell me that their sales team has a hard time getting in front of buyers – but assure me that once there, they do well. So, they want to explore how to use digital methods to increase the number of leads they have.
That’s relatively straightforward to do – it takes some time and some resources, and technique makes a big difference in the rate of success. But it’s essentially an inbound content marketing play.
It’s really important to understand, though, that those “leads” are different than what they may have in mind – and certainly different than what their veteran salespeople expect. For companies like this, a “lead” is often what they used to collect at trade shows. In other words, an engineer from a company that has a project they’ve been assigned with an implementation date and approved capital. You know, a sort of BANT qualified lead.
Today’s digital leads can certainly be that type, but quite often they’re very early stage – often just educational. That’s great in that it puts the sales team into conversations very early. But it’s different. And for sales teams under heavy quota pressure, or measured by quotes and pipeline, they’ll feel it’s a waste of time. So often the leads are generated…and then ignored.
Second, the concept of lead scoring is premised on the assumption that a company has an adequate CRM, sales force automation, and marketing automation. The process will observe a number of actions such as website visits, page views, email opens, velocity of engagement, number of people from the same company engaged, etc. And it will automatically trigger actions – some involving sales reps directly, and others automatically but on their behalf. None of that is possible if you don’t have an adequate tech stack.
So let’s stipulate that you have the tech stack which includes CRM, sales force automation, sales acceleration and marketing automation, that your team uses it consistently, and that philosophically you’re comfortable with the fact that leads will be different than in the past.
So now on to the Lead-scoring. It is just as it sounds – applying a numeric value to a lead which can be used to inform lead management and help to continuously prioritize and reprioritize sales rep focus.
Generally, lead scoring will consider indicators of buyer intent – starting with first party intent or the signals you observe on your own digital properties. I mentioned some earlier. These would include:
- Website visits
- Web page views
- Email opens
- Email clicks
- Chatbot/live chat engagements
- Quote requests
- The frequency, the velocity (e.g. the change in frequency) and the number of each
- We might also include registration or attendance at a webinar or other digital events
- And it’s not all digital – visiting with you at a trade show, or an inquiry through a channel partner could impact the score
Those are individual factors –company or account factors can also make a difference. Kerry Cunningham who was the account-based marketing expert at Sirius Decisions and then Forrester for many years talks about a scenario that might be familiar.
When a company sees a contact from a high-profile target account convert on their website, every gets excited. When another contact from the same account converts, the reaction is more muted. “We’re already talking to them” folks will say. But Cunningham’s point is that the first could be noise – the second is the important one which confirms organizational buying interest.
So, let’s add some account factors. These can include:
- Aspects of fit – size, industry, geography, public vs. private ownership, number of employees, key customers, or other factors that you look at to intuit how likely they are to be a good fit. This is your ICP or ideal customer profile.
- And the number of people from the company taking action is also a factor as Cunningham notes – for instance, one person taking a couple of actions over a couple months is very different than several people from the same company all becoming active within a week
- The combination of job titles can help you to infer the stage in buying journey, the profile of the project, and constitution of the buying team
- If you have website visitor identification tools, you could also include information on anonymous site visits by folks from the company
- And third-party intent data adds another perspective
The process of lead scoring is really simple in theory, but complex in execution. Essentially, you’ll ascribe some numerical value to each factor, weighted for its presumed significance. The values can be positive (e.g., more activity) or negative (e.g. diminished activity.)
You create thresholds that you associate with marketing and sales activity – for instance, a moderate score might route the account to a BDR to follow up on active contacts and identify other contacts that fit known buying team roles. A really high score could alert a salesperson to reach out proactively and possibly even automatically enrich the database with additional contacts for them to work.
It's important that this happen dynamically, with dashboards and alerts to help sales understand how things are changing and where they should focus. And it needs to dovetail with the established sales process.
I say it’s complex in execution because in my experience you’ll never quite solve for the perfect values, weightings and thresholds. Your lead scoring model will frequently change. That’s OK. Simply thinking about it and working it into your sales process will force you to continuously improve.
That’s how it works. But why is lead scoring important for industrial sales organizations?
Let’s go back to the beginning.
As you improve your digital posture to deliver a better buyer experience, you’re going to create a lot of leads. But they’re not all active sales-ready leads. So, you need a tiered approach to sales and nurturing (periodic marketing emails, outbound sales, field sales) that is matched to the stage of the lead.
Lead scoring will help you match each lead, contact and account to the right resources to deliver the experience the prospect wants, to hold sales accountable for the right levels of performance and activity, and to optimize your company’s chance to create appropriate business from the lead.
If you don’t stratify leads somehow – dynamically using scoring is the best approach in my experience – then you’ll waste leads as sales gradually ignores more of them since many won’t be qualified opportunities. So, stop wasting leads!
I’m Ed Marsh. Thank you for joining me for this episode of Signals from the OP. If you enjoyed it, please share it and subscribe – either to my YouTube channel EdMarshSpeaks.TV or at the related blog SignalsFromTheOP.com.