Use Lead Scoring to Identify Sales-Ready Leads - B2B Marketing and Sales Tip #140
Written by Jon Miller, author of the Modern B2B Marketing blog and VP of Marketing for lead management software company, Marketo
Most leads from B2B marketing campaigns are still researching. Prematurely passing these early leads to sales only annoys the buyer and makes sales even less likely to follow-up on marketing leads. This means the majority of inquiries require further lead nurturing before they become sales ready, so marketers also need the ability to know when to try to nudge the prospect to the next stage and when to pull back and give the prospect some space.
This is where lead scoring comes in. Lead scoring is the process of determining a prospect’s level of interest in your solution (engagement), as well as your interest in a prospect (demographics targeting). When used effectively, lead scoring means you will pass fewer, but higher quality, leads to sales. By not wasting sales time on low quality leads, reps can focus on just the high quality leads — meaning wins rates and sales productivity go up. In fact, as little as a 10% increase in lead quality can generate a 40% increase in sales productivity. In a world where the sales department costs equal 20 or 30% of total revenue, this kind of improvement means a dramatic impact on the bottom line.
How can you use lead scoring to achieve this kind of benefit for your organization?
First of all, too many companies use only basic demographic data (e.g. title, company size, etc.) in scoring. This is useful, but demographic data only tell how interested you are in the prospect—and nothing about how interested the prospect is in you. Even BANT criteria (budget, authority, timing, and need) have limited usefulness since buyers’ answers to those questions are notoriously inaccurate, and as we all know, people’s actions speak louder than their words. This means you should also track a lead’s behaviors so you can you measure their interest and engagement in your solution.
Begin by monitoring and tracking online behaviors, such as email responses, completed forms, and Web site visits. You can do this manually with web analytics, or automate the process using marketing automation software. Assign a point value to each, just as you would assign a value to each job title. Certain behaviors – such as using your company brand name in a search, visiting your pricing page, or returning frequently to your site – indicate higher readiness to buy, so assign even higher weights to those behaviors. Since B2B purchases typically involve 6 to 21 different people, add up the scores for each contact at a given company to measure the total level of engagement for that organization. Finally, be sure to lower the score over time if engagement goes down.
Review the point values with the sales team, and decide what score indicates sales-readiness. If the sales team determines a prospect is not yet ready, recycle the lead back to marketing for additional nurturing. Finally, be sure to close the loop and refine your scoring rules and point values over time for continuous improvement.
Want more details? Here’s a link to a free eBook from Marketo called Best Practices in Lead Scoring.
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August 26th, 2008 at 11:06 am
Thank you your posting about Lead Scoring and Exchanges (Or as we have been calling for years, a “Lead Marketplace”)
When it comes to Internet Leads, LeadPile has heard it all before. Many time before! At LeadPile, we have been hearing it for six years! When it comes to Lead Exchanges, or Online Leads, I find it interesting that almost every poster says the same thing, every time, about Online Leads and Lead Exchanges.
What do they say? The obvious of course; “We are the best, we are greatest, we are the kings of all leads, our leads rock, our leads convert best, our leads convert at the highest in the industry, our platform is the most robust and greatest platform in the universe, and our leads are better than your leads because I say so!
So let’s take a moment to really break this down (assuming I have your attention!) What do the following statements really mean?
• “We are the best”
• “Our leads are the greatest”
• “We rule the world”
• “Our leads are better than your leads”
• “My leads can beat up your leads”
• “Our leads are the Super Duper Leads”
• “Your leads are garbage”
• “These are the Glengarry Leads“
• “Coffee and XYZ Lead Provider’s Leads are for phone closers only”
…“And not only that, I have heard that your leads are terrible. How do I know? Well I just spoke to your competition at another leading Lead Exchange/Lead Provider who told me so. So obviously it must be true! Why would they say such a thing about your leads? I can’t imagine!”
And now for the comment about leads that I absolutely just love…(in this case a mortgage lead)… “I heard from my Uncle’s Sister’s Brother’s Aunt’s, Half-Sister’s Brother’s Loan Officer (who cannot even close his own sister’s loan because another Loan Officer from another Company just outhustled him to get it done!), that the lead he just bought from XYZ Company (LeadPile/Reply/Root/Leadpoint/YZZ Exchange) was terrible because it was only a 70% LTV, FHA Rate and Term Refinance (and the customer’s current rate was 8.9% with a 27% back end ratio!)
In addition, the Loan Officer complained that he did not have enough equity to work with to close the deal. And not only that, he tried this Lead Company, or exchange out, by buying one lead.
And when he called that lead four hours after receiving it (because he was in a tanning salon), the customer told him that he just signed an application 15 minutes ago with a local lender that sent a friendly Loan Officer over to their home! The audacity of the customer to want to do business with another Loan Officer who out hustled him because he was in a tanning salon!
“Now that is a really bad Lead! The humanity! I was in a tanning bed, and some other Loan Officer out-hustled me for the deal. I am so mad that I am now going to give that lead provider a whopping 1.22113314451 stars for sending me a lead that I waited 4 hours to call (only to be told by the customer that they signed an application 15 minutes ago with a different Loan Officer who drove to their home!)
“These leads are pure garbage and I am going to let the world know by ripping this lead provider in every forum known to mankind”. “How can they sell such garbage leads?”
“In addition, I heard through the grapevine that my Uncle’s Sister’s Brother’s Aunt’s, Half-sister’s Brother’s Loan Officer knows another guy (who works part-time as a Net Branch Loan Officer out of his bungalow in Malibu) who just closed a loan by calling 10,000 random numbers from the White pages. And he says that the best leads are the leads you get from the phone book! I have to believe him because he lives in Malibu!
So now I will tell everyone about the Phone Book Leads because I want to screw that Company that just gave me that lead that I could not close because I was in the Tanning Salon! I will show the bad lead Company who is boss by giving the Phone Book Leads a rating of 97.78899655 (or maybe 12.55 stars) so that everyone will run out and get a phone book just to spite that Company who gave me that really bad lead! Let’s make sure that all the other Loan Officers in the world know that the phone book leads are the Holy Grail of Leads!” Now What?
Well, the Tanned Loan Officer spreading the good news about the good Phone Book leads is actually a Phone Book Rep on the side! How convenient!
So, spread the word! Who needs leads from any other lead provider besides the phone book? All you need is a phone book, and to prove it…just look at their 12.55 star rating! And by the way, since I am a part-time phone book salesman, I would be delighted to sell you some phone books!
Note: I have seen some amazing Loan Officers who could actually close more phone book leads than many Loan Officers who are busy complaining about real-time leads…but that is another post, and another story completely.
So let’s continue with the story about Leads…
Let’s say you are selling cars and I give you ten real time delivered auto leads. You do not close one lead. So what do you do next? You say the leads are garbage, right! Right! These Auto leads stink! I am going to tell everyone because I did not close a deal from the 10 leads!
Run for the hills…These leads are a joke. I will tell everyone that the Auto Leads I bought from you absolutely stink!
But wait! I sell the next three leads to another Auto Sales Person, and he/she closes two deals from the next three leads (Too bad sales person #1 did not by thirteen leads instead of 10! Or, maybe he just was not a very good closer)
So now the leads are the greatest thing since sliced bread right? Wrong.
All this really means is that 2 deals closed from 13 overall leads. What this also means is that the sales person who went zero for ten says the leads are garbage, and the sales person who closed two out of three says the leads are terrific!
Right? Wrong!
Why? Maybe the SuperCloser who closed two out of three leads is not going to tell anyone how good the leads are! I sure as heck would not publicize this very much! Would you? He will probably tell everyone he knows that the leads are crap (just like the first guy) to eliminate as many people as he can from buying the good leads!
So what does all this really mean? It means that without an Efficient Lead Marketplace, the Lead Business can be insane.
It means that the only way to get a pure, efficient Lead model is to do business in a Lead Marketplace that is can provide volume, and measurable metrics to its participants. In essence, a well-designed Lead Marketplace makes mince meat of all this aforementioned insanity.
Why?
If the leads are working for the buyers, they will continue to buy the leads from the provider through the exchange, and other Buyers will see the demand for a particular lead provider, and the increased bid price is driven by quality, need and ROI.
On the other hand, if the leads are not working, the reverse is true. Lead Buyers will stop buying the leads and/or lower their lead bid to make their metrics work.
Either way, a well-designed Lead Marketplace works very well for both the buyers and Sellers. If the leads are not working for the buyers, they can wait on the sidelines.
But what happens when the sideline players see the lead prices going up from certain Sellers?
It may be a clue that the leads do indeed close, and maybe they need to get themselves back in the game (maybe slowly at first, but that is up to them!)
This is the beauty of the Lead Marketplace or Lead Exchange. It levels the playing field for both small and large Publishers and Advertisers.
Bottom line: Lead Marketplaces work and they are in their still in their infancy.
With ramp-up in volume, Lead Exchange will become even more compelling.
To our fellow pioneers, I salute you. To new players to the game, we wish you the best.
Now for a quick note on which Exchange is the best/greatest/most efficient/and most technologically advanced? Good question! I know you would expect me to say that LeadPile is the greatest. I will not say that here. Here is what I will say however…Check them all out, and decide for yourself!
Andy Jacob; Founder, LeadPile