A Startup CEO’s Handbook for Effective Lead Scoring in Marketing
Lead scoring is necessary for any startup navigating or starting into the world of inbound marketing. This process involves assigning a value to your leads based on their behavior and demographics helping you gauge the quality of your marketing efforts and adapt your strategy accordingly.
As a result, lead scoring is a vital component of any successful sales and marketing strategy. This valuable technique empowers your sales and marketing teams to focus on the most promising leads, follow up at the right time, and ensure optimal resources.
If lead scoring is widely adopted, there is no one approach to it. Depending on your business and organization, Ideal Customer Profile (ICP), and Go-To-Market (GTM), there are different ways to implement lead scoring.
Let’s dive deep into lead scoring and understand how to implement it to drive growth and conversions successfully.
Understanding Lead Scoring: Terms and Definitions
Let’s start by demystifying lead scoring and the key terms you need to know:
What is lead scoring?
- Lead scoring is a crucial aspect of an effective sales and marketing strategy.
- It entails assigning a value to leads based on their behaviors and demographics.
- This process enables BDRs (Business Development Representatives) and sales teams to prioritize their efforts, focusing on leads with the highest potential.
- It also allows you to analyze the effectiveness of your marketing activities by assessing the quality of the leads generated.
- It lets you think about your ICP (Ideal Customer Profile) and align your marketing and sales teams around lead discussions.
- To implement lead scoring effectively, you can create multiple scores, including:
- Behavioral Score: indicates the lead’s actions or interest in your activities. It can include visiting a blog post or registering for a webinar.
- Demographic Score: relies on lead characteristics such as location, company size, or industry, providing insights into lead quality.
- Product Score: primarily used by Product-Led Growth (PLG) companies using PQL (product qualified leads), this score assesses a lead’s interaction with your product, such as completing a particular step, indicating product activation.
- Hubspot defines lead scoring as “the process of assigning values, often numerical “points,” to each lead you generate for the business.”
Definitions of various lead stages
The first step of efficient lead scoring is to define your lead stages. While these definitions can vary between companies, ensuring clarity and alignment across your organization is essential.
How you’ll define your lead stages is up to you, but your sales and marketing team needs to understand the intricacies of the lead stages. These definitions should be documented and easily accessible within the company.
Tip: If lead stages can change over time, consider that too much change can impact your ability to analyze your actions. So, take some time to agree on the definitions that make sense to your business.
Here’s an example of lead stages and their definitions:
- Lead: represents a deanonymized individual typically identified by collecting basic information like an email address. They come from various channels, such as website forms, social media, or events.
- MQL (Marketing Qualified Lead): In many companies, an MQL is a lead that achieves a specific behavioral score, signifying strong interest and engagement with your marketing efforts. This lead could have, for example, consumed your website and blogs, downloaded a white paper, and done other activities that added up together to show signals of solid interest in your activities. As for myself, I prefer to define MQLs in another way. I like to qualify them with their demographic score, which gives me information on the quality of leads I generate.
- SQL (Sales Qualified Lead): An SQL is an MQL deemed ready for direct sales contact. In most companies, this is when demographic score comes into play, adding characteristics to the MQLs such as industry, job title, and country and making sure that the leads sent to the sales are not just showing strong interest in your product but also the characteristics of your ideal customer profile. As for my part, this is where I add the behavioral score to my qualitative leads (or MQLs).
- PQL (Product Qualified Leads): Product-led growth (PLG) companies usually use it to score leads based on their product activity. It can indicate product consumption (X times over the last week) or particular features (completed an entire workflow) and must relate to product activation.
- Opportunities: arise from SQLs that have advanced to a stage where they could become customers. Methods here differ from qualifying an opportunity (MEDDIC, BANT), but I like to use the BANT methodology, which includes Budget, Authority, Timeline, and Need. Establish key criteria with your sales team and ensure that every opportunity passed to an AE is relevant. That way, you ensure consistency in your metric tracking, ensure your sales team focuses on the right opportunity, and improve your conversion rate.
- Deal Lost / Deal Won: These stages represent closed opportunities, signifying whether a deal was won or lost.
These definitions can vary depending on the companies and the processes. You can use it, but your marketing and sales teams must discuss it. Don’t rush to do it; everyone needs to be clear, understand, and comfortable with the definitions and stages to achieve success.
Now, let’s understand why this is important and its intricacies.
Intricacies Behind Lead Scoring
Understanding the intricacies of lead scoring is crucial for its successful implementation:
1. Marketing Efficiency Analysis:
Your lead definitions provide valuable insights for analyzing your marketing efficiency. Tracking your lead stage will help you understand where there are gaps or inefficiencies in your marketing efforts. For example, you’re driving many leads. It is excellent, but are they matching your ICP? It is only possible if you track MQLs based on demographic score; this is why I choose to do so. You can also analyze conversion rates from MQLs to opportunities or website traffic to leads, giving you key insights to drive your marketing strategy.
2. Priority for Sales Follow-up:
Your lead definition will give a sense of priority for your sales follow-up.
Lead scoring is, before anything, a way to prioritize the leads to follow up with.
Contacting the right lead at the right time is crucial in the sales-buying journey. It is why making sure your lead scoring is well thought out and adapted to the specificities of your business is essential for your success.
Providing your sales team with low-quality leads will end up with poor follow-up. But if your lead scoring is well thought out and gives the right leads to your sales team at the right time, your BDRs will fight for it.
And as we know that addressing a prospect within the hour will increase your chance of success by 95%, you can’t be wrong. So good lead scoring = good follow-up = good prospect experience = increased conversion rate.
As simple as that.
3. Building Trust:
Your lead definition will ensure trust from sales and the overall company
Ensuring that you pass the right leads to your sales team fosters trust among your teams. And where there is trust, there is alignment, and success is never far away when marketing and sales align.
It will also build trust within the overall company. In fact, when you present marketing numbers, making sure that they reflect your company’s real success will gain the company’s trust and will avoid the usual marketing eye’s powdering effect.
4. Alignment of Sales and Marketing Teams:
Your lead definition will align your Sales and Marketing teams.
Establishing a lead scoring will also construct a shared understanding and criteria for what constitutes a quality lead. It allows for insightful discussions between the sales and marketing teams, fostering better collaboration and ensuring alignment among the team toward the direction to take.
5. Improved Conversion Rates:
Your lead definition will improve your Conversion Rates:
By targeting high-scoring leads, conversion rates are likely to increase.
Why?
Because:
1/ you pass the right leads,
2/ better, you pass them at the right moment,
3/ your sales team follows up quickly as they know they are of high quality,
4/ sales efforts focus on the right deals where your sweet spots are,
5/ prospects experience increase, and you turn up more sales opportunities
6/ as opportunities are well position for your sweet spot and prospects experience is good you likely to improve your deal conversion rate.
As a result, you increase your conversion rate from leads to opportunity and opportunity to deal!
How do you score your leads?
Scoring your leads involves assigning numerical values to both demographic and behavioral aspects. Here’s how you can approach it:
Select a target score.
It can be anything: 10, 50, 100. What is important is that attaining this score should reflect essential criteria for your business. Select the same target score for your demographic or behavioral score to avoid confusion. If you need to reach 35 points to achieve your demographic score, you’ll also need to get 35 behavior points to trigger the behavior status.
Demographic score.
This score defines lead characteristics, such as location, job title, company size, or industry. Depending on your business and ICPs, some criteria can be more relevant than others.
For example, a company whose Ideal Customer Profile (ICP) is a CEO from a Small and Medium Enterprise (SME) company from the fashion industry in Germany will score differently from a company targeting large accounts, including multiple personas and regions.
Ensure you’ve identified your ICP or persona and influencers. Then, score your leads based on the most important criteria for your business.
Calculate different scenarios to make sure this is consistent.
Example: My company offers a B2B SaaS platform to improve financial operations within SMEs operating in the retail industry. Target markets are the United States and the UK. My target score is 50.
Country: United States and the UK will get 10 points. The rest of Western Europe will get 5. Other regions will get 0.
Fonction/Job Title: CFO and Finops will get 20 points. Rest of the finance department 10. Other departments will get 0.
Company Size: Companies with 0-10 employees will get 0. From 10-50, it will get 10 points, 50-200 will get 10 points, and 200+ will earn 0 points.
Industry: An enterprise from the retail sector will get 20 points. The rest will get 0.
You can also give negative points to students or interns, for example: – 10 points.
This example is fundamental, and it’s usually much more shadowed. Also, consider that your lead enrichment cannot be 100% efficient; you’ll probably need more data sometimes. Take it into consideration when assigning lead scoring. If you never have the industry, for example, calculate your score accordingly to avoid having leads that never trigger the score needed to pass the MQLs status. Or make sure you have the information (ask it in your forms, create a qualification process, enrich your leads, and more.).
It can also evolve. If you discover some problems within the system, change your scoring system. The objective here is to give the right leads to the sales team. Keep your marketing and sales team aligned and discuss lead scoring regularly.
Behavioral score
This score hinges on lead actions and engagement with your marketing content and activities. The score will depend on the activities you offer and the importance you give them. Which signals are vital for you, and which aren’t? Categorize actions based on awareness, consideration, and decision stages. And assign scores to actions that inform you about the time to contact the lead.
Example:
The lead consumes a decision-stage blog: 7 points
It downloads a decision-stage whitepaper: 15 points
After a few days, the lead attend a webinar including a demo: 15 points
It looks at a customer story: 7 points
And finally, the leads look at your pricing page: 7 points
It triggers the MQLs/SQLs status and informs your BDRs that the lead is ready to discuss.
Some signals, such as a demo/contact request or a trial, can also directly trigger the status.
On the contrary, some can indicate that the leads are not interesting. For example, if they look at your career page, they are most likely looking for a job than having a project. You can then give negative points to avoid triggering the MQLs/SQLS status.
Product score
Many PLG (Product-led growth) companies that offer free trials use this score. It is based on product consumption and gives you a signal on product activation when the lead starts to use the product. The score will then depend on your product and what you consider these signals. It needs to be designed commonly with your product and marketing team. It could be:
The lead uses your product every day for seven consecutive days: 10 points
It completes its onboarding steps: 10 points
After a while, the lead imports its financial data within the app: 10 points
The lead creates a financial report from the data: 10 points
Finally, it invites two or more contacts within the app: 10 points
It would trigger the status of the product-qualified lead. Here, we focus on the app’s lead behavior, not marketing activities.
What should you keep in mind when implementing your lead scoring system?
Implementing lead scoring requires careful consideration:
1. Involve All Concerned Teams:
There is no point in establishing a lead scoring system without involving your sales team. Lead scoring is for marketing and sales activities and means something when they are willing to go in the same direction. It is the process that bridges both teams, so it involves all stakeholders from the beginning.
2. Choose the Right Platform:
Lead scoring can be treated differently on the marketing automation platforms. Select a marketing automation platform that accommodates your scoring needs and provides flexibility. Question them about their philosophy of lead stages and scoring and the flexibility the system allows. Choose the platform that will make you efficient and implement the right lead scoring for your company.
3. Think About Historical Data:
Your lead scoring system will be the foundation for analyzing your marketing actions over time. It will give you the necessary insights regarding the quality and quantity of your lead generation. Think for the long term and how you’ll use it. Make sure your lead scoring system allows you to analyze your actions properly. And consider that any further changes will change your ability to compare data. Document any change when implemented to retrieve the reasons for changes over time and avoid lousy decision-making.
4. It Depends on Your Business and Specificities.
While guidelines exist, there’s no one-size-fits-all approach to lead scoring. Think about what’s best for your business and what success looks like for you. Avoid agencies that want to implement lead scoring without asking the right questions, and involve your teams in the process. Tailor your scoring system to align with your unique business requirements and objectives.
5. It Evolves Over Time:
Lead scoring is not static; it evolves as your business grows and changes. Even if thinking through will avoid changing the system every week, which would have impacted your ability to analyze your actions, lead scoring needs to evolve when problems or system defaults arise. Regularly review and discuss your lead scoring processes to adapt to new challenges and opportunities.
Lead scoring is a dynamic process that empowers businesses to prioritize and nurture leads effectively. By combining demographic and behavioral scores, organizations can streamline their sales processes, enhance team collaboration, and drive higher conversion rates. As the digital landscape evolves, a well-implemented lead scoring system becomes indispensable for staying competitive in modern business.
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