Written by Cody Young, ReachForce Customer Success Manager

Lead Scoring appears to be the newest tactic Marketers are using to better identify warm to hot leads for Sales. Marketing vendors like Marketo and Eloqua are promoting lead rating and lead scoring as a means to increase sales effectiveness and accelerate typical sales cycles. Both are measuring a contact’s interaction behaviors with marketing activities. But should a contact really be considered a hot lead if they open a few emails and visit your website a time or two? I think our Sales team might disagree here.

At ReachForce, we are doing a little lead scoring of our own. Instead of analyzing prospect behaviors, we are going directly to them and asking them to participate in a survey. By gathering qualifying information directly from the prospect, our customers are able to better target their messaging at these new prospects. By enabling them to get to the right buyers, in the right companies, with the right message, they are seeing increased marketing results and sales conversions.

Here are few tips we share with our customers when we’re building out a lead scoring survey.

Lead Scoring surveys can quickly:

1. Qualify a company as a user of a certain technology or application – This type of question is to confirm if a prospect organization uses something that either compliments or competes with the survey sponsor’s offering.
2. Find out respondent status: decision maker, a part of a decision making team or a secondary influencer – This type of question is useful when setting the stage for a sales call or marketing campaign so messaging can be made as relevant and personalized as possible.
3. Find out how well the top 2‐3 product or service “key values” are recognized by each respondent – A “key value” is something that makes an offering better, unique or uncommonly relevant to the prospect. This type of question is used to find out if they will “get” your value proposition, or if education or special messaging is required.
4. Measure how important key values are to each respondent – This follow up to Q3 is used to find out how important the respondent thinks the sponsor’s key values are. Combined scores to this set of questions are used to determine degree of interest and help make sales and marketing messaging relevant and personal when following up on the lead.
5. Determine budget – This type of question is used to pinpoint how much the respondents’ organization spends (and by implication would expect to spend next time) on offerings similar to what the sponsor sells. Paying close attention to scores that are too low help sales and marketing teams prioritize.
6. Confirm plan – This type of question helps find out when or how often the respondent is in the market for what the survey sponsor is selling. Questions like this can also be centered on finding trigger events (audits, budget planning, corporate initiatives) that create sales opportunity.
7. Establish time line or “window of sales opportunity” – By combining the responses to “Confirm plan” and this type of question, the result is normally a reliable indication of when the respondent’s organization will begin the buying cycle for what the survey sponsor is selling.

The lead score you end up with for each prospect should help you to determine if the prospect can be immediately handed off to sales or put into a marketing campaign for further nurturing.

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Contributed by Cody Young, ReachForce Consultant

I came across an interesting post by Jeff Liebl on Performance Insider blog. The post proposed the notion of have a third-party scoring system for leads similar to FICO scoring. The potential pitfalls expressed in Jeff’s write-up about buying leads from online sources are well founded. And while conversation about scoring lead data in a way similar to FICO is interesting, the real value I see is the more practical and tactical thoughts he provokes about lead data quality in general.

First and foremost, the concept of establishing FICO-like rules for scoring individual lead quality while lists are being bought and sold shouldn’t be an edict for marketers to sit and wait for. Market forces are already making it happen in the B2B space (at companies like ReachForce) – and yes, it is having real effect on price models and competition between lead source vendors.

The most important element of any marketing effort is specifying the target – and you can’t really do that effectively by just ‘buying a list.’ Today’s marketing must be managed by understanding how sales funnels work and how buyers buy.

This puts a very special responsibility in the hands of all marketers to view this as filling up on ‘funnel fuel’ –not ‘list buying.’ Sadly, Jeff’s spot-on reference to “numerous reports of fraudulent and bad-quality leads” is a disturbing indicator that too many are still in line with the wasteful standard that marketing’s job is to buy lists and busy themselves sending out emails and letters for 2% response rates.

Buying data to feed sales funnels can best be compared to buying fuel – and from sludgy-crude to jet fuel, a wide range of grades exist. That being said, it should not surprise anyone that as new sales and marketing automation engines expose better ways to find, keep and grow customers, jet fuel is going to win the race every time.

Once high quality funnel fuel is secured, predictive modeling does not have to be a complex, budget busting ordeal. A simple way to start is by ranking a single-value to measure each prospect in a simple, but highly relevant way. These are what Dr. Eric Siegel calls ‘predictors’ in his short but informative article entitled Predictive Analytics with Data Mining: How It Works.

He draws a simple example using “recency” as a predictor (based on how long it’s been since a customer’s last purchase) and assigns higher point values for more recent customers. This simple analysis drives a very obvious prediction (you can probably guess) that contacting the customers in order of recency – calling the high scores first and the low score last – will result in better response rates.

Expanding on this, other predictive indicators and rules can be introduced to formulate smarter and smarter models as you go. The next example is to combine two predictors into a formula: recency + personal income. And if one of the predictors is more important to you than the other (by rule) then its weight is adjusted accordingly – e.g. 2 x recency + personal income.

Once you are able to score your database this way (or just parts of it for starters) using predictors that best fit your needs, the ability to target and finesse top scoring leads with highly relevant and personalized communication is enhanced – thus, increasing the probability that you can drive a prospect’s behavior and not just predict it (as with FICO scores).

A lot of the better marketers I know like this approach because it is not that complex and is the least costly, most deliberate way to drive sales revenue. After all, it really just keys on another formula that comes to mind: 2 x quality funnel fuel + targeted and personalized communications = high response.

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Attention Conservation Notice: The following post highlights research on B2B Technical Buyers and provides a quick overview of how to develop a persona for this role.

Building an effective B2B target database takes a lot more than just identifying the right market segment, company size, and target title. Before you get started building your database, it’s important to get to know the different roles, responsibilities and characteristics of each person involved in the buying process.

Today, we take a look at the B2B Technical Buyer – the person within a company or organization who is responsible for ensuring a solution meets the technical requirements of the company. For technology purchases this could be an IT professional. For CRM software it might be a Sales or Marketing professional. Depending upon the size of the organization, these individuals may or may not have final financial approval but they do hold significant influence over the purchase.

Here’s what a recent MarketingSherpa Benchmark Study says about this role:

a. white papers, product literature and industry articles as their top sources for product information.
b. their top search engine is Google. Depending upon the source of data, you’ll hear that anywhere from 80 to 98% of them start their purchase process on Google.
c. 64% of them shortlisted a product based on a timely sales call.

What does your technical buyer look like? For my network management software company, we built a persona profile that described his or her job, life and daily concerns. We did this by describing our best customers. We even gave him a name—Ajay—and a face by adding a photo. Now, whenever I write literature or design a campaign, I always think of Ajay and I’m better able to target the campaign using the right messages and media. Here are a few items to think of when you are building your own:

Name:
Photo:
Geographic:
Gender:
Age:
Annual Income:
Marital Status:
Number of Children:
Education:
Work/Life Experience
Psychographics:
Current Work Environment:
Mobile Devices:
Presence in the Buying Cycle:

For more on this topic, download the free B2B Marketing ebook called Funnelnomics from ReachForce.

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Marketing Profs ran a great article yesterday by Russell Kern entitled “How to Solve Direct Marketing’s Five Biggest Problems” that struck a nerve with me as a B2B direct marketer. He writes “Salespeople love to receive a nice steady flow of leads that keeps them busy, but not too busy. When that’s not what you’re giving them, they tend to become, well, verbal. So what does Sales do? It cherry-picks the best leads, letting the surplus responses fall to the floor to rot. Within 45 days, they’re yelling for “fresh” leads.”

Wow, does that ever sum up the universal B2B Direct Marketer’s challenge! It’s either too many or too few. We can never win. ReachForce’s superbly targeted B2B Marketing Oh Crap day addressed this challenge brilliantly. I know we can all relate to the effect that the holidays has on our lead flow.

If you are struggling with too many leads or too few fresh/high quality leads, then Kern advises:

• One of the fastest and least expensive methods to improve your results is to eliminate poor targets and increase the number of look-alike suspects.
• Here is a simple exercise to perform when putting together a lead generation mailing: Have your data-processing vendor run a count, by title, of your mailing list. At the same time, run a count of your customer titles.
• Now, compare the results. How many of the titles in your suspect mailing list are not in your customer file? How many titles like “administrator,” “consultant,” and, yes, even “inmate” have somehow slipped into your mailing list—people who will respond for the sake of it, but never, ever buy your product?

Once you’ve taken the important step to better target your campaigns, you should also consider a great automated scoring and lead scoring and nurturing program as we wrote about in The B2B Lead and our ebook on the topic Funnelnomics. If you have some time to sit down and study up on database marketing fundamentals this holiday season, I encourage you to take a moment to download the book and put a few of the lessons into action in 2008.

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I spoke at the Eloqua Marketing Effectiveness Summit last week up in Dallas (http://summit.eloqua.com/) – strangely enough as I write this I am back in Dallas on a trip to the east coast and my flight is cancelled (another blog, another story) and since I am here for 3 unplanned hours, how better to spend my time then to blog!

As the session started and the discussion leaders engaged the attendees (lead generation folks from companies like National Instruments, Vignette, FuelQuest, Paymetrics, etc.), I felt like the session was going to be a support group with 2 major glaring issues:

1. Sales and Marketing Relationship/Rules of engagement
2. Data Issues – New data (lists. Leads) sourcing, working with internal data (house lists, customer data, support data, cross selling, up selling).

On number 1 above I believe (and did pontificate at the session) that marketing and sales have to co-exist in harmony or the business loses. I also recommend a formal legally binding (not really) contract between marking and sales on the definition of a lead. As one marketer said, working with sales or empowering them with information to market to their customer base was “like giving the devil a soul” – lady calm down, maybe you need to talk this one through. Hey Psychiatrists out there, there is a new form of couples therapy needed on the planet – B2B marketing and sales.

In terms of data issues, I have been frustrated for the last 10 years on the poor quality of lists and also the lack of analytics available to marketers (and hence we launched ReachForce) but did not realize the gravity of the problems/issues and ongoing struggles. Some interesting points of note were:

• We are all stuck in a B2C world of thinking and need to think about B2B marketing differently – it is different and more complicated from a sales process perspective
• Internal company data is suspect at best – how do you define rules of engagement between sales and marketing on when or when not to touch a prospect / customer
• How do you keep internal data (in the CRM system) refreshed/updated as it’s touched by different people at different stages of a sales (and post sales cycle) – who is the MASTER owner of the data and defines the different roles of people by stage of marketing sales/cycle
• Data visibility – how do you think about direct visibility of service and support data (the instance was a support ticket) associated with a customer as a flag to marketing and sales before that person/company is touched/messaged next
• And on and on … enough that I think we will start B2B Marketing support group in Austin as a start in 2008!

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You know you have to have metrics to show value in marketing programs but are you tracking the right metrics? Can you track value added to top line revenue? Check out this article from Customer Think about aligning sales and marketing metrics.

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One of the more popular sessions at Dreamforce last week was a case study on Lead Scoring presented by Eloqua’s Innovative Marketer blogger, Steve Gershik. The study averaged results reported by 10 companies six months before implementing lead scoring and six months afterward:

Leads Provided to Sales

• 6months before lead scoring - 1372
• 6 months after lead scoring- 1058

Opportunity Win Ratio

• 6 months before lead scoring - 31.3%
• 6 months after lead scoring - 40.9%

Revenue/Deal

• 6 months before lead scoring - $39,100
• 6 months after lead scoring - $45,900

Total Revenue

• 6 months before lead scoring - $16.8MM
• 6 months after lead scoring - $19.8MM

This shows what most B2B Marketers already know: lead scoring will result in passing fewer leads to Sales, but with higher quality leads Sales will have higher win rates and close more deals faster.

A little bragging here: At the same event, my company—NetQoS—took home the Eloqua Markies Award for our success in the area of Lead Scoring. We were given the Marketer’s Choice award for a solution to a problem that many wished they had – too many leads from a very success viral campaign and a Networkers trade show.

Using Eloqua, we automated lead processing to prioritize business opportunities buried within more than 6000 raw leads. This reduced the processing time of just the 3500 tradeshow leads from two-and-a-half weeks (in 2006) to just three days (in 2007). Just 2 months after the event, we’ve already closed revenue.

Here’s a few tips we can share on processing and scoring your leads:

• Use self-qualifying questions to gather and score explicit data-the information the prospect provides using your Web forms (ie. company size, title, job function, etc.).
• Take scoring to another level by using behavioral or implicit data you collect by observing lead behavior (ie. email clicks, visits to web pages, keyword searches, referral pages).
• Test adequately before deploying.
• Monitor and optimize at least quarterly.

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