What Is Lead Scoring?

What is lead scoring?

Lead scoring is a process that ranks potential customers using various criteria to determine which leads are ready to purchase and which are unqualified. 

Sales and marketing teams use lead scoring the most but this tool can help all departments in your organization by increasing sales efficiency and improving revenue. 

How does lead scoring work?

Lead scoring requires determining specific criteria relevant to your business’s industry or customer base and assigning a number value (usually 1-100) for those data points. If you’re new to lead scoring and unsure what criteria to include, start with BANT (budget, authority, need and timeline). These data points are an excellent starting point for prioritizing leads.

Here’s how lead scoring works: 

• Determine a conversion point threshold: Consider key factors from conversion sources and critical areas that keep leads from completing a purchase. The total points a lead receives will help you determine a conversion point threshold across all leads. The higher a lead’s points, the more likely they will buy.
• Consider lead-scoring patterns: You should also factor in lead-scoring patterns. For example, if a customer converts 100 percent of the time after watching a webinar, that lead should be given priority even if it doesn’t meet the conversion point threshold.
• Use your customer relationship management (CRM) software to automate lead scoring: Once you set thresholds, connect this data to your CRM software. The CRM system can send you real-time notifications when leads meet the point threshold, allowing you to follow up with them before a competitor does. Consider creating visual charts for your lead-scoring system to improve lead-scoring accuracy across multiple departments.

Benefits of lead scoring

Accurately and efficiently scoring leads can save time and money. Consider the following benefits of lead scoring:

• Lead scoring increases sales efficiency: With a follow-up list of qualified leads that meet the lead-scoring threshold, your sales team can spend more time closing sales-qualified leads and less time with contacts who aren’t ready to buy.
• Lead scoring lowers customer acquisition costs: Marketers can quickly remove marketing dollars from channels below the lead-scoring threshold.
• Lead scoring improves conversion rates: Using a lead-scoring threshold, your sales personnel can speak directly to decision-makers poised to buy. Automated drip emails keep leads with a lower score engaged until they’re ready to purchase.
• Lead scoring increases revenue: As you refine the lead scoring process, revenue will increase. Since you focus on more qualified leads, you will have higher conversion rates and spend less time and resources on unqualified leads.
• Lead scoring improves collaboration between departments: Since lead scoring provides a factual score for each lead, marketers can rest assured they provide practical sales leads, while salespeople can confidently close sales.
• Lead scoring allows advanced targeting: Use lead-scoring data to increase landing page conversions and locate online forums and social media pages your customers use the most.
• Lead scoring helps build stronger relationships: Lead scoring improves market segmentation among your leads. Engaging with lead data can help you better understand lead connections and correlations. Personalizing content, sales calls and customer service requests can create repeat customers and glowing referrals.

How do you build a lead-scoring model?

Every company has a unique lead-scoring system based on its goals. However, the basic principles of lead scoring are similar. Consider the following steps when building a lead-scoring model.

1. Create lead profiles based on customer data.

Before you can understand lead quality, you must first understand your customer. Create segments within your leads by separating potential buyers into customer personas. Segment customers using existing customer data and overall observations of your sales.

Separate your leads into two groups: converted leads and dead leads. Use your lead-scoring criteria to rank all converted leads. If you already have lead data, compiling lead scoring and determining the leads with the highest conversion rate will be easier.

2. Determine general lead-scoring categories.

Consider the following primary data categories to inform your lead-scoring system:

1. Demographic and firmographic: Demographic and firmographic data is information about location, industry, company size and job title. This detailed data can be researched online or via social media or volunteered through an online form. This data provides little help in scoring compared to other categories. Keeping demographic data to four or five categories is considered sufficient.
2. Behavioral: Behavioral data refers to how a lead interacts with your company. Measure implicit data by how a lead visits your website, starts a free trial, engages with your social media or signs up for additional services. Your CRM system can track the customer journey step by step, giving you the data you need to score your leads accurately.
3. Email engagement: Lead scoring assigns points to leads based on email open rates and click-through rates. With lead-scoring automation software, you can keep your sales team updated by setting an expiration date on email engagement. Ultimately, your sales cycle should determine your expiration dates. 
4. Social engagement: This data shows how active leads are on your social media networks. Do they comment, share posts or click on links? This information also helps you pinpoint your most active social channels and divert your advertising dollars. 

Use these data categories to score your leads. For example, if a lead stops opening or clicking on links from your marketing emails, adjust their lead score by issuing negative points. Lowering their lead score can help accurately measure their current conversion probability. Other actions worthy of negative points include personal email addresses ― if you are mainly business-to-business ― and leads that lack information or look like spam.

However, if a lead increases their opens and clicks, it might indicate they’re ready to buy. This would cause their score to rise. A sharp rise in lead scoring should trigger a sales follow-up.

3. Pinpoint additional lead-scoring criteria.

After setting your general lead-scoring data categories, perform testing to determine other factors that may lead to a successful sale. Use all your marketing data and strive to create more detailed marketing attribution and contacts reports to pinpoint lead-scoring opportunities.

For example, you might find that leads who sign up for your webinar have a high conversion rate, but those who join your email marketing list are slow to convert. You might also discover that company size or a specific job title has a higher conversion rate.

4. Perform lead-quality tests to determine your lead-scoring threshold. 

After scoring your leads, rank them to determine which are worthwhile to pursue, considering your business’s staffing and marketing budget. However, ranking leads on a spreadsheet shouldn’t be your endpoint. Have your sales team follow up with all leads, regardless of their value on paper. 

After a few weeks, reexamine these leads and see which ones became customers and which didn’t convert. You’ll learn about your customers and the strengths of your sales and marketing teams.

Using the leads that became customers, take note of the lowest score. This total point value is your lead score threshold: It determines the leads most likely to convert with the least effort. Focus your marketing efforts on this segment and improve processes to convert leads below the threshold.

5. Use your CRM to automate lead scoring. 

If you think lead scoring sounds ideal but aren’t sure how to find the time to accomplish it, you’re not alone. Fortunately, automated CRM features can do the work for you. 

After entering lead-scoring criteria into the CRM software, the tool will score leads automatically and track scores as they change. Predictive scoring utilizes an algorithm with thousands of criteria to identify the best leads automatically.

Your CRM can help you quickly prioritize leads based on your qualified leads and what your dead leads have in common. Plus, the longer you use predictive scoring, the smarter it gets ― optimizing your lead scoring along the way.

Lead-scoring best practices

When implementing lead scoring, keep the following best practices in mind: 

• Don’t get caught up in the details: Keep the lead-scoring criteria simple. If you score too many data points, leads may be too similar in score ― this defeats the purpose. Frequently adjust your criteria and rules to keep your lead scoring accurate as your business evolves.
• Decide on processes: Before implementing lead scoring, decide what actions you’ll take if the lead meets the threshold and what you’ll do with leads with low scores. Depending on your team’s size and automation budget, following up with marketing qualified leads (MQL) and using drip email to nurture leads is standard.
• Define a follow-up schedule: Separating leads into two categories allows you to determine a consistent follow-up schedule. For example, high-quality leads could receive a phone call within 24 hours, while low-scoring leads would receive an automated email within one week.
• Connect your CRM: Ensure your CRM has lead-scoring integration so it can notify sales and marketing teams to contact leads who meet the threshold. It can also identify prospects who need more time to move from interest to intent.
• Frequently run lead-scoring reports: Lead scoring isn’t foolproof. Run CRM reports frequently to see if your lead scores match your conversions. If you notice any shifts in your target customer, see if your MQL-to-conversion rate is on the decline. Conversion decreases will require you to update criteria and analyze current lead-scoring models.
• Clean up data: Some leads will never convert to customers. By removing their data from the system, you can free up space for prospects and home in on accurate lead-scoring criteria. Automated lead-scoring software can disqualify leads, so you won’t have to waste time marketing to irrelevant contacts.

The best CRM software for scoring and managing leads.

The best CRM software can facilitate lead scoring and lead handling to improve sales and boost profits. Consider the following top CRM platforms that can help you qualify, track and score leads:

• Salesforce CRM: Salesforce CRM is a powerhouse with features and offerings for small businesses and enterprises alike. It offers rules-based lead scoring, automatic lead assignment and additional sales tools like forecasting and automatic lead-capture functionality. Our detailed review of Salesforce CRM explains more about the platform’s integrations, AI features and more. 
• monday.com Sales CRM: monday.com’s Sales CRM provides excellent features and support for sales and marketing managers. Its exceptional customizable lead-scoring function helps sales teams identify prospects who are likely to become customers. It also boasts helpful lead capture and deal management features. Read our in-depth monday.com Sales CRM review to learn more about this highly user-friendly platform.
• Freshworks CRM: Freshworks CRM boasts exceptional sales management features, including custom predictive lead scoring. It can also flag stalled deals to ensure better time management and create team-specific sales workflows. Check out our Freshworks CRM review to learn more about this comprehensive software suite that also includes information technology management, human resources, customer service and marketing support.