Lead scoring is an effective way to track contacts’ engagements, creating a temperature gauge to plan future messaging and targeted sales outreach.
Similar to playing any game, scores make sense only if you have rules and goals to determine how points are scored. Think of lead scoring as gamifying your marketing and sales process. The points will help determine who your best prospects are and close deals quicker.
What is lead scoring and how does it work?
Lead scoring is a widely used methodology by marketing and sales teams to determine the likelihood of a lead making a purchase. The process involves assigning a score to each lead based on how they engage with your brand.
The lead score indicates the probability of a lead making a purchase, with higher scores indicating a greater likelihood of purchase. Scoring typically ranges from 1-100. Before setting up a lead scoring model it’s important to understand common attributes that help set the baseline for your score.
Explicit vs. implicit scoring attributes
Lead scores are calculated based on various attributes, which can generally be split between explicit and implicit attributes.
Explicit lead scoring
Explicit lead scoring is the information given explicitly by the lead, such as demographic data. Examples of explicit attributes include job title, company size, industry, and location.
Implicit lead scoring
Implicit lead scoring involves analyzing a lead’s behavior to gauge their level of interest. This includes behavioral scoring, active and passive buying behavior, and interactions in the sales and marketing funnel. Implicit attributes include white paper or gated content downloads, website visits, email engagement, watching product demos and videos, and attending webinars.
Each attribute that applies to a lead earns them points toward their lead score. For example, visiting the pricing page may indicate a high level of interest and therefore add points to their lead score. Conversely, unsubscribing from emails may subtract points from their lead score.
Once a lead reaches a certain point threshold, such as a score of 50, a sales rep will reach out to close the deal. Many companies have sales automation to identify qualified leads and alert sales reps accordingly.
Why is lead scoring important for your business?
Lead scoring is essential for removing guesswork and enabling you to focus on the most promising leads that are likely to convert, something every business can benefit from.
The impact of lead scoring
For example, let’s take the case of TechSolutions, a software development company. Before implementing a lead scoring system, they faced difficulties identifying qualified leads and wasted resources on low-quality leads that did not convert. This led to wasting time and leaving money on the table.
However, after implementing lead scoring, the company identified the most promising leads and prioritized them for sales follow-up, sending those who needed more lead nurturing to the marketing team. By focusing their efforts on high-quality leads, they improved their conversion rates and achieved significant revenue growth.
As a result, TechSolutions expanded its customer base and invested in additional marketing resources to generate even more leads. In short, lead scoring helps you identify where your leads are in the sales funnel, enabling you to focus on the most promising leads and take appropriate action to turn them into customers.
The benefits of lead scoring to your business
Now that we understand the importance of lead scoring in the buying cycle let’s explore the real world benefits it can offer to both the marketing and sales teams:
Lower marketing and acquisition costs
Appcues, a B2B SaaS company, reduced customer acquisition costs by 80% through lead scoring. By prioritizing leads based on their engagement level and fit with Appcues’ ideal customer profile, the company could focus their marketing efforts on the most promising prospects.
Higher conversion rates (CVR) and time saved
LearnUpon, an e-learning software company, increased their MQL to SQL conversion rate by 30% after implementing lead scoring. By prioritizing leads based on their engagement level and fit with LearnUpon’s ideal customer profile, the sales team could focus on the most promising prospects and close deals more quickly.
Improved sales and marketing alignment
Hootsuite, a social media management platform, improved alignment between its sales and marketing teams by implementing lead scoring. By providing sales with higher quality leads and more detailed lead intelligence, the company was able to close deals more quickly and with greater success.
Increased revenue
ZoomInfo, a B2B data and intelligence provider, saw a 45% increase in sales conversions after implementing lead scoring. By focusing its sales efforts on leads that had the highest scores, the company was able to improve conversion rates and drive more revenue.
The evidence speaks for itself. Lead scoring drives revenue growth and provides a range of benefits for your business. The question now is how?
Resources on lead scoring
Want to dive deeper into lead management and lead scoring?
Creating a lead scoring system
Let’s explore how to enhance your marketing efforts by creating a lead-scoring system. By effectively utilizing lead scoring, you’ll be able to prioritize your leads, nurture them efficiently, and ultimately boost your conversion rates.
Understanding lead scoring
You can award points for a variety of actions. Points can be awarded or subtracted and can expire after a set amount of time. In ActiveCampaign, lead scoring is found in the “Contacts” tab, and then in “Scoring”:
When you click “Add New Score,” you denote if the score is for a contact or a deal.
For our example, we are creating contact scoring rules relating to engagement, let’s make sure we are editing the name of our scoring rules to be ‘Engagement’.
Then, after we ‘Add a New Rule’, the familiar conditions screen will pop up, allowing you to input your conditions. We want to award five points to someone who signs up for a newsletter through our Newsletter form. When complete, be sure to set your Lead Score Rule to Active in the upper right corner.
Note: A contact either meets conditions or does not. Meeting a condition adds or subtracts a value only once; the points are not cumulative. In our example, the only rules we’ll put in our Engagement score are actions people will take only once. Examples include subscribing to a newsletter, downloading a specific report, or attending a particular event.
Now that we have an Engagement score, we can add points to the Engagement score in our automations. For example, if we send an email to our new newsletter subscribers, who have just earned five points by completing our form, we may also want to give them points for actually opening the email.
Because opening an email is a smaller commitment than completing a form, we’ll award two points for the act. Additionally, points can be set to expire. If you want a good read of how hot or cold your leads are, expiring points will help you keep track.
In this example, we used an If/Else statement to award points to contacts who open the email. The points are set to expire after three months.
Now that we know where and how to add points let’s think about overall planning.
Strategy first
In order to determine how your organization should score your contacts, you have to understand what’s important to your organization. What kind of actions do you hope your audience will take? What communications do you send, or what events do you plan? How do you determine if a contact is hot or cold?
There are several different actions that could be important for a contact:
- Subscribing to email updates
- Requesting a free informational download
- Requesting a consultation
- Registering for an event
There are also actions that, in the aggregate, may add up to an engaged contact. While these actions may seem small on their own, the aggregate can show a bigger picture. For example:
- Opening an email
- Clicking a link
- Visiting a particular URL more than once
Understanding all the different actions your contacts can take, and learning their tendencies, will help you along the way.
Data-driven planning
Look at your data and get a feel for any similarities between your contacts that ultimately convert.
For example, if a large percentage of conversions occur following a free consultation, awarding a higher number of points for a consultation makes sense. Those leads are historically more likely to convert than others.
Monitoring cold leads can also help you make strategic decisions. A contact may open a few emails but never take any additional actions. A small action like opening a single email doesn’t call for another email; you want to avoid being considered spam!
Awarding points
Now that you have a handle on what’s most important, you can add to your Engagement Lead Score rules.
Remember: Contacts only trigger rules in the Scoring section once, and the points are NOT cumulative. You don’t want to put repetitive actions here as a best practice.
- Subscribed with Newsletter form submission = 5 points
- Requested a report through Request free report form = 10 points
- Has achieved goal Requested Consultation = 20 points
We’ve determined that these actions mean a lot to our organization and signify a greater level of interest from our contacts. They’ll also take these specific actions only one time. We’ve scored them to give additional insight into the engagement level of our audience.
You can also set up automations that award points. As noted earlier, not all points are created equal. Some points may need to expire because smaller actions may not be a meaningful way to determine engagement.
For example:
Opening an email = 2 points, expire after 3 months
Clicking a link = 5 points, expire after 3 months
Simply opening an email doesn’t require much effort. That is why those points expire: if someone just opens emails and racks up points but never takes any additional actions, there’s no need to identify them as a particularly hot lead. (Additionally, if many people open your emails and take no additional actions, you may want to revisit your messaging.)
FEATURED AUTOMATION
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Take lead scoring to the next level
Our next guide, Lead Scoring 102, covers additional examples of when lead scoring can empower your marketing automation and next steps for dividing your leads by engagement. Lead scoring empowers you to automate re-engagement campaigns, create entries in the Deals CRM, and many other actions based on lead score criteria you create.
Do even more with lead scoring
Lead scoring is a powerful way to individualize marketing automation across all types of businesses. If you’re looking to improve an existing lead-scoring system, check out our post on creating an effective lead scoring system.
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