A lot of marketing teams still guess about when the right time is to pass a lead to sales.
Is it after the prospect downloads that 17-page eBook?
After they click on a few emails?
How about after they spend 45 minutes browsing your site and visit your pricing page?
Without a consistent framework in place, your MQLs (marketing qualified leads) will be hit or miss, and your sales team will waste a lot of time pursuing leads that don’t convert. According to an oft-cited report by MarketingSherpa, 73 percent of all B2B leads are not sales-ready.
Lead scoring promises to bridge the gap between marketing efforts and sales results. Considering that that’s one of the biggest challenges for modern B2B companies, you can see why marketers are eager to jump on the bandwagon. But how important is lead scoring in the context of a larger marketing ecosystem? Is it something every company should practice?
Lead Scoring Overview
Let’s begin with a basic overview. In simple terms, lead scoring is a tracking system for the qualification process. It assigns each lead a numerical value that indicates whether the lead is ready for sales, needs to be nurtured (via email and other outreach) or should be discarded altogether. Most analysts divide the scoring metrics into two categories:
Explicit: demographics, firmographics, BANT (budget, authority, needs, timeline); submitted voluntarily by the lead
Implicit: observed behavioral information (sometimes referred to as “digital body language”); includes site browsing activity, email engagement, downloads, clicks, social media shares, etc.
Traditionally, marketing’s focus has been to fill the pipeline with as many leads as possible. More leads = more sales conversations = more revenue. Right? Well, not exactly. It doesn’t matter how many leads you have if they aren’t good leads — aka, leads that have purchase intent and match your target audience.
Lead scoring is a way of refining the quality of leads. Instead of raking them in by the thousands when you implement a lead scoring system, you may see fewer leads in your pipeline – but the proof is in the conversions.
As you might imagine, lead scoring is a tedious process, and not everyone is convinced of the benefits. Depending on which source you consult, anywhere from 66 percent to 81 percent of businesses still don’t practice it.
If you’re undecided, you should be aware of how other brands leverage lead scoring for growth. Even if you’re on board and planning to automate the process, it’s important to define clear goals and success factors. What do you hope to achieve? How will you track the results?
Here are three areas where marketing and sales typically see the biggest improvements:
Higher Sales Productivity Instead of wasting their time cold-calling and following up with unqualified leads, your sales team can have rewarding conversations and invest their time in activities that actually yield results (issuing a free demo, giving a price quote, etc.). By filtering out bad or cold leads, a scoring system can also shorten the sales cycle (from sales-ready to purchase). A pure and concise conversion process means you can win more business opportunities with fewer sales reps.
More Conversions Again, lead scoring doesn’t mean you’ll bring in more leads; it means you’ll be able to focus your efforts on better quality leads. If you’re doing it right, “MQL” may start to mean something again, instead of being a euphemism for “50/50 chance.” And what is the best proof of qualification, if not conversion? In a 2013 Lenskold-Pedowitz study, 68 percent of marketers said lead scoring was “highly effective and efficient” at improving their programs’ revenue contribution.
Marketing and Sales Alignment Although this is a less tangible benefit, it has very real implications. According to SiriusDecisions, B2B companies with aligned marketing and sales departments experience 24 percent faster revenue growth. Lead scoring provides the perfect opportunity for the two departments to collaborate. Sales specialists can tell marketers what kind of content will help them start conversations and which metrics are actually indicative of purchase intent. And marketers can use this insight to improve their efforts and create targeted programs.
Where Lead Scoring Can Go Wrong
A lead scoring system will disappoint if it isn’t built or managed correctly. There are a number of places where marketers can go wrong. Here are four to watch out for.
Neglecting negative scoring criteria In some situations, it may be necessary to subtract points from the lead score. Two common examples are 1) When a lead visits your company career page (they’re interested in working for you, not buying from you) and 2) When a lead initially earned a lot of points, but hasn’t reengaged in quite a while (“gone cold”). If you count only positive actions as points, you may end up with leads that falsely register as qualified.
Using one-dimensional scoring Your scoring system should allow for differentiation between elements such as behavior, demographics, firmographics, etc. If all these factors are lumped together in a single value, it can present a skewed picture. For example, a lead could have a very high score from reading/downloading content, but be from the wrong industry or company size to match any of your products. Most companies use at least two scoring dimensions.
Inaccurate lead information Lead scoring begins when a prospect gives you their information, typically by filling out a web form. The problem is, not every prospect gives correct information. This may be out of ignorance (they don’t know their budget yet, or they aren’t a decision-maker and so are not privy to the data) or simply to avoid unwanted contact. Prioritize what information you actually need, and don’t bombard a prospect with questions on the first contact. You can try progressive profiling (getting additional information in subsequent forms, one or two pieces of information at a time) to solicit more deliberate, accurate answers as the relationship strengthens.
Not analyzing and adapting Lead scoring isn’t designed to be static. It’s important to continuously evaluate your criteria, get feedback from sales, and adjust as necessary. You’ll also need the right tools for tracking leads from capture to close, in order to know which metrics succeed and which don’t. Closed-loop reporting and marketing automation technology will play a huge role in the analytics process.
As the buyer’s journey continues to diverge from old, linear models and grow in complexity, lead scoring will become a staple of B2B marketing. You’ll save your sales team from countless wasted hours, give your marketers a better framework for building targeted campaigns, and drive more revenue with less effort. So, the answer to the question, “Is lead scoring important?” is an emphatic… Yes!
Download our eBook, “Create a Lead Scoring Program in 5 Steps,” to learn how to create your ideal buyer profile, identify scorable attributes and behaviors, assign point values for profile data, and implement your new lead scoring program. With accurate scoring models in place, you can ensure better prospect and customer nurturing, increased engagement, improved lead transfer, and sustainable growth.