Grab a coffee and read our purpleblog

Tea works too. Or hot choco­late. Or even some­thing stronger! Our arti­cles are based on the most com­mon ques­tions we get from our clients, that’s why they are so inter­est­ing to read, and actu­al­ly utilise. You won’t notice how time flies!

7 min read Lead Scoring What It Is and Why It Matters

Lead Scoring: What It Is and Why It Matters

Key Takeaways

  • Lead scoring is a way of sorting leads to determine which could be most valuable to businesses.
  • Companies that implement lead scoring can see an improvement of 77% to their ROI.
  • Businesses that embark on lead scoring should be sure to involve their sales and marketing teams to obtain an accurate picture of their lead generation processes.

What is lead scoring?

Lead scor­ing is all about assign­ing val­ue to dif­fer­ent poten­tial customers.

It’s a method­ol­o­gy that ranks some leads above oth­ers in terms of how valu­able they could be to businesses.

Lead scor­ing is used by busi­ness­es to eval­u­ate and rank poten­tial cus­tomers (leads) based on their like­li­hood of becom­ing pay­ing cus­tomers. Each lead is analysed for cer­tain cri­te­ria (e.g., behav­iour, demo­graph­ic, and engage­ment) and assigned a val­ue or score based on these factors.

Lead scor­ing can help busi­ness­es focus their sales and mar­ket­ing efforts by high­light­ing which leads are most like­ly to con­vert due to their appar­ent engage­ment or inter­est lev­els. Ulti­mate­ly, this process allows for more effi­cient use of resources and can ulti­mate­ly lead to increased sales and revenue.

There are numer­ous oth­er ben­e­fits to lead scor­ing, which we’ll delve into below. This arti­cle will also explore the var­i­ous ways busi­ness­es can con­duct lead scor­ing, as well as some dos and don’ts.

Let’s get started.

Why should I start lead scoring?

Once your busi­ness starts imple­ment­ing lead scor­ing, you can expect to see the fol­low­ing results:

Better prioritisation of sales and marketing efforts

As men­tioned above, lead scor­ing helps busi­ness­es iden­ti­fy the most promis­ing leads. This helps them focus their sales and mar­ket­ing resources on those indi­vid­u­als who are most like­ly to make a pur­chase, ulti­mate­ly sav­ing time and mon­ey by avoid­ing wast­ed efforts on leads that are less like­ly to convert.

Improved ROI

By stream­lin­ing their resources on the most promis­ing leads, busi­ness­es often see increas­es in their return on invest­ment (ROI) for sales and mar­ket­ing efforts. In fact, organ­i­sa­tions using lead scor­ing expe­ri­ence a 77% increase in lead gen­er­a­tion ROI.

Improved lead conversion rates

Busi­ness­es using lead scor­ing also see increased con­ver­sion rates (CR). By focus­ing on leads that are most like­ly to con­vert, a high­er per­cent­age of those tar­get­ed will ulti­mate­ly become pay­ing cus­tomers. A boost­ed CR also means that busi­ness­es are spend­ing less time, mon­ey, and ener­gy on lead generation.

More personalised communication

A key com­po­nent of lead scor­ing is under­stand­ing the needs and pref­er­ences of indi­vid­ual leads, allow­ing busi­ness­es to com­mu­ni­cate with cus­tomers in a more per­son­alised and rel­e­vant way. This is known to build stronger rela­tion­ships with cus­tomers and increase the chances of con­vert­ing them to pay­ing customers.

Increased customer satisfaction

Since lead scor­ing means that B2C com­mu­ni­ca­tion is bet­ter tai­lored to the spe­cif­ic needs of indi­vid­ual leads, busi­ness­es can see boost­ed cus­tomer sat­is­fac­tion lev­els. This is because cus­tomers feel that a busi­ness under­stands their needs and pref­er­ences, which can encour­age them to rec­om­mend the brand to friends and become repeat customers.

Over­all, con­duct­ing lead scor­ing can pro­vide sig­nif­i­cant ben­e­fits for busi­ness­es by help­ing them to bet­ter under­stand their cus­tomers and focus their resources on the most promis­ing opportunities.

If you’re con­vinced and want to kick start a lead scor­ing cam­paign, read on to learn how you can do so:

How do businesses conduct lead scoring?

Lead scor­ing is typ­i­cal­ly con­duct­ed with a com­bi­na­tion of auto­mat­ed tools and human analy­sis. Here are the steps typ­i­cal­ly involved in the process:

1. Determine which data is important to your business

Busi­ness­es first need to deter­mine the cri­te­ria that are most rel­e­vant to their spe­cif­ic goals. Doing this will help iden­ti­fy which data is rel­e­vant to their lead scor­ing efforts because it will inform the fac­tors that leads will be scored on.

For exam­ple, the online behav­iour of web­site vis­i­tors could be real­ly impor­tant to an e‑commerce busi­ness, while a local busi­ness could be more inter­est­ed in loca­tion data. These cri­te­ria will then inform scor­ing in that users who engage more with a web­site will receive a high score and leads that live out­side a catch­ment area will receive a low or neg­a­tive score.

Here are some oth­er exam­ples of data that could form the basis of your lead scor­ing efforts:

  • Demo­graph­ic infor­ma­tion (e.g., age, gen­der, location)
  • Com­pa­ny infor­ma­tion (e.g., if B2B, industry)
  • Online behav­iour (e.g., web­pages vis­it­ed, down­loads, forms filled, pur­chase and brows­ing history)
  • Email and social media behav­iour (e.g., open rates, click­through rates, shares, likes, fol­lows, retweets)

Lead scor­ing typ­i­cal­ly involves a com­bi­na­tion of both explic­it (infor­ma­tion pro­vid­ed by the lead) and implic­it data (gath­ered through the lead­’s behav­iour), so don’t feel pres­sured to pick just one.

If you’re not sure which data will be most impor­tant to your lead scor­ing efforts, you can get help by involv­ing your sales team in the dis­cus­sion, con­duct­ing cus­tomer sur­veys, and look­ing at cus­tomer-acqui­si­tion data reports.

Your sales team and cus­tomers will know lots about the sales process and, there­fore, what was and was­n’t effec­tive in dri­ving sales. Plus, your ana­lyt­ics report will give con­crete answers to ques­tions regard­ing con­ver­sion and help iden­ti­fy the most com­mon traits among con­vert­ing customers.

2. Create a value range

Once the cri­te­ria are iden­ti­fied, each one is assigned a val­ue range. For exam­ple, if mul­ti­ple pur­chas­es are an impor­tant fac­tor for your busi­ness, you’ll cre­ate a cor­re­spond­ing range. In this instance, you might set up your val­ue range like this:

1 pur­chase = 10 points, 2 pur­chas­es = 20 points, 3 pur­chas­es = 30 points, and so on.

You might cre­ate a mul­ti­fac­eted val­ue range based on sev­er­al fac­tors. For instance:

Fill­ing a form = 10 points, mail­ing list sign-up = 15 points, vis­it­ing a high-val­ue page = 20 points

There are count­less ways you could set up your val­ue ranges. Just make sure that high points are only award­ed to fac­tors that are proven to be valu­able to your busi­ness and that points are award­ed pro­por­tion­ate­ly in accor­dance with your con­ver­sion analytics.

For instance, if users that signed up to your mail­ing list proved to be more valu­able than those who just made an account with your e‑commerce site, don’t award the lat­ter more points.

3. Score your leads

Using the cri­te­ria and ranges you have estab­lished, it’s time to score each lead accord­ing to their behav­iour and char­ac­ter­is­tics. This can be done using an auto­mat­ed lead scor­ing tool that aggre­gates data from var­i­ous sources, or it can be done man­u­al­ly by a sales or mar­ket­ing team member.

For large datasets, an auto­mat­ed tool is most effi­cient, and it will sync up with your CRM soft­ware so every­thing’s in one place.

4. Start prioritising leads

Once leads have been scored, you can start pri­ori­tis­ing them. The leads with the high­est scores are typ­i­cal­ly giv­en the most atten­tion and resources, as they are con­sid­ered to be the most like­ly to con­vert to pay­ing customers.

A great way to cel­e­brate your new lead scor­ing efforts would be to launch a high­ly tar­get­ed email mar­ket­ing cam­paign on your small­er but more qual­i­fied list of leads. Or you might just car­ry on with your sales and mar­ket­ing efforts but trim down the list of peo­ple you intend to reach out to.

5. Adjust your criteria and scoring as time goes on

Over time, busi­ness­es may need to adjust their lead scor­ing cri­te­ria and val­ue ranges based on changes to their goals, cus­tomer behav­iour, or the state of the mar­ket. By doing so, they can remain rel­e­vant and in tune with cus­tomers even as things evolve. We rec­om­mend eval­u­at­ing your lead scor­ing process if sales or con­ver­sions sud­den­ly take a down­ward turn or if you open up a new mar­ket­ing chan­nel (e.g., cre­ate a com­pa­ny social media account).

Different lead scoring models

Depend­ing on their spe­cif­ic needs and goals, busi­ness­es can choose from a few dif­fer­ent lead scor­ing mod­els. Here are three to be aware of:

1. Rule-based model

The rule-based mod­el involves set­ting up a set of pre­de­fined rules to score leads. These rules can be based on var­i­ous cri­te­ria, such as those list­ed above.

This mod­el is use­ful for busi­ness­es that have a clear under­stand­ing of their ide­al cus­tomer pro­file and want to focus on those who meet spe­cif­ic cri­te­ria. How­ev­er, it’s lim­it­ed in its abil­i­ty to cap­ture com­plex rela­tion­ships between dif­fer­ent lead attributes.

2. Predictive model

The pre­dic­tive mod­el involves using machine learn­ing algo­rithms to analyse his­tor­i­cal data and pre­dict the like­li­hood of a lead converting.

This mod­el is par­tic­u­lar­ly use­ful for busi­ness­es that have large vol­umes of data and want to lever­age it to make more accu­rate pre­dic­tions. The mod­el can be trained to look for pat­terns in datasets that are indica­tive of a lead being more like­ly to con­vert and then use this infor­ma­tion to score leads.

3. Hybrid model

The hybrid mod­el is a com­bi­na­tion of both rule-based and pre­dic­tive mod­els. It involves set­ting up pre­de­fined rules as well as using machine learn­ing algo­rithms to iden­ti­fy pat­terns in the data.

This mod­el is use­ful for busi­ness­es that want to lever­age the ben­e­fits of both mod­els. They’ll like­ly have some pre­de­fined rules in place, such as the exam­ples list­ed in our “how-to” section.

Lead scoring Dos and Don’ts

If you’re going to embark on lead scor­ing for the first time, there are some things you’ll need to know. Here are our top dos and don’ts for lead scoring:

Don’t rely solely on one source of data

It’s impor­tant to con­sid­er mul­ti­ple sources of data when scor­ing leads. Rely­ing sole­ly on one type of data, such as demo­graph­ic or behav­iour­al, may result in an incom­plete pic­ture of each lead­’s poten­tial. Instead, make sure you com­bine the infor­ma­tion from both types for a more com­pre­hen­sive approach.

Don’t use subjective or arbitrary criteria

Lead scor­ing cri­te­ria should be based on objec­tive data that is mea­sur­able and rel­e­vant to your busi­ness goals. Using sub­jec­tive or arbi­trary cri­te­ria can lead to incon­sis­tent and inac­cu­rate lead scor­ing. Instead, the cri­te­ria used to score leads should be clear­ly defined from the very beginning.

Don’t set it and forget it

Lead scor­ing should be an ongo­ing process that is reg­u­lar­ly eval­u­at­ed and adjust­ed as need­ed. Set­ting the cri­te­ria and then nev­er revis­it­ing them can lead to an out­dat­ed and inef­fec­tive scor­ing methodology.

Don’t ignore negative scoring

Neg­a­tive scor­ing is a way to sub­tract points from a lead­’s score based on spe­cif­ic behav­iours or char­ac­ter­is­tics that indi­cate a low like­li­hood of conversion.

For exam­ple, it might be used to indi­cate an inac­tive mail­ing list sub­scriber. If you’re going to embark on a lead scor­ing strat­e­gy, it would be a good idea to imple­ment neg­a­tive scor­ing to cre­ate the most accu­rate pic­ture of your leads.

Don’t segregate your sales and marketing teams

Lead scor­ing should be a col­lab­o­ra­tive effort between sales and mar­ket­ing teams. This will ensure that the scor­ing method­ol­o­gy devel­oped aligns with both teams’ goals and pro­fes­sion­al opin­ions. Plus, uni­ty between these teams will ensure the smooth-run­ning devel­op­ment and imple­men­ta­tion of lead scoring.

Don’t neglect the human element

While auto­mat­ed tools can be help­ful for lead scor­ing, it’s impor­tant to involve human analy­sis and inter­pre­ta­tion as well. Human input can pro­vide con­text, nuance, and expe­ri­ence that auto­mat­ed tools may miss. So, make sure you ask your sales and mar­ket­ing teams for their opin­ions when eval­u­at­ing the most effec­tive con­ver­sion and lead nur­tur­ing techniques.

Final thoughts

Lead scor­ing can seem like a lot of work. But the pay­off can be invaluable.

To make things eas­i­er for you, we rec­om­mend that you use tech­nol­o­gy as much as pos­si­ble to help with the more com­pli­cat­ed aspects of con­fig­ur­ing and analysing data. How­ev­er, don’t for­get to ask the mem­bers of your team who under­stand the sales jour­ney best for their pro­fes­sion­al opinions.

As there can be a lot of data to con­sid­er, it’s easy to focus too much on a sin­gle cri­te­ri­on. It’s impor­tant, though, that busi­ness­es try to under­stand how dif­fer­ent fac­tors can inter­link and devel­op a lead scor­ing process that allows for this.

Free Consultation
Please let us know your project requirements, and we’ll get in touch as soon as we can.

    We are pleased to welcome you on the purpleplanet!
    To order the service package you’ve chosen, please fill in the form and we’ll get in touch with you soon.

      We are pleased to welcome you on the purpleplanet!
      To order the service package you’ve chosen, please fill in the form and we’ll get in touch with you soon.