How to Do Effective Lead Scoring

How to Do Effective Lead Scoring Feb 25, 2020 - Marcel Odena

For effective lead scoring, the first thing we have to do is think about our ideal customer persona (ICP) and define the assignment of points based on what we value most. The goal of getting leads is usually to get more customers and sales, thus growing the revenue of your company. Therefore, not all leads have the same value. The leads which will be easier to are more valuable to us. Even more valuable still are the leads with a high probability of closing a high-value sale. We always want our sales team to focus their efforts on the best leads. Effective lead scoring allows us to classify leads based on their score and prioritize the leads with the highest score. The criteria for effective lead scoring are usually classified into two groups: one group that considers the demographic characteristics of the lead and another that takes into account the lead’s behavior in terms of their interactions with our digital assets (website, blog, content, etc.). In this article, I’ll explain both these criteria and teach you how to combine them together to give each lead a total score. 

What is lead scoring?

You probably already know what lead scoring is, but I’ll give a brief explanation just in case.

Lead scoring is a technique that allows you to assign a score to a lead depending on specific criteria. If we have 100 leads, the system will calculate the score for each one, the highest score being the best (highest value) and the lowest score being the worst (lowest value and will meet very few if any of the conditions we’re after). 

Why do we have to do lead scoring?

You may be asking yourself, “why should my company implement a lead scoring system?” The answer is very simple: if your company generates a high volume of leads per month, it’s in its best interests to do lead scoring so it can classify all its leads and order them from best to worst in terms of quality. Doing this allows you to focus your company’s efforts on the highest quality leads, and by that, I’m referring to the work of both the marketing department and the sales department. Clearly, your company doesn’t want to waste time on low-quality leads, which are the leads that you’ve analyzed and have determined you’ll be unlikely to close a sale with. Saying it like that might sound a little frivolous, but let me present a scenario. Your company decides to invest money, time, and effort in capturing leads, gathering all the contact details of people who will potentially pay for its products or services. In this sense, it’s interested in dedicating its resources towards high-quality leads, those that are better aligned with your company objectives.

How many leads should I have before I start implementing a lead scoring system?

This is relative. The criteria you should apply are the volume of leads you get each month in relation to the number of staff dedicated to the sales process. I’ll provide an example to help you understand. Say every month the marketing department gets 100 leads (making an average of three to four daily leads). Now, let’s say the sales team consists of 3 people. In this scenario, as you can see, a lead scoring system wouldn’t be necessary. Sure, it would be a bit better but it’s hardly going to be necessary. With three people dedicated to working on 3 to 4 leads per day, your sales team can manually examine each lead with a magnifying glass, looking them up on Linkedin to see what company they work for, what position they hold, etc., and decide whether it’s worth continuing the sales process. 

Now, imagine that instead of 100 leads per month, your company generates 600 leads per month (on average, that would be about 20 leads per day). In this situation, analyzing each lead individually to see whether it’s worth following them up is going to be quite complicated. And it’s going to get harder with each passing day as your leads start to accumulate. If you’ve got a high-quality lead that the sales team decides to follow, the process will take time (typically, they’ll try calling the person, organizing a meeting, and making follow up calls, etc.). Depending on the time required for the sales process, you’ll probably start building up a waiting list of leads that needs to be followed. It won’t take long before the sales team has a list of 80 pending leads that it needs to deal with. In this situation, it’s super important to classify your leads with a score, or in other words, to implement a lead scoring system. 

Criteria for doing lead scoring

The criteria for lead scoring are usually classified into two broad categories:

  1. Demographic Criteria: are points based on the characteristics of the lead and their environment, such  as the attributes of their company.
  2. Behavioral Criteria: are based on the behavior of the lead regarding their interaction with your company, whether that be through the use of your website, blog, downloading content, or attending webinars, etc.

Below I’ll explain each of these lead scoring criteria in detail.

1. Demographic criteria for lead scoring

The demographic criteria refer to the characteristics of the lead and its environment, including its professional attributes. Imagine our ICP (Ideal Customer Profile) is the financial director of a large company. In this case, we’d define our criteria to give lots of points to a lead which held the position of a financial director, especially within a large company. Now, imagine another employee from the same company with the position of “sales director.” In this case, this lead would be scored lower because even though they work at the same company, they don’t hold our preferred position (financial director). Therefore, we wouldn’t assign so many points to this person (if assign any at all).

Now I’ll explain several attributes of a lead that are usually considered when doing lead scoring:

  • Lead position: this is undoubtedly one of the most important attributes to score. Once we’re clear about who our ideal lead is (ideal buyer persona), we can give more points to leads who work in our preferred position. We may have several positions that interest us, with some being more valuable than others. In that case, we can apply a range of scores: position A gets 10 points, position B gets 8 points, position C gets 6 points, etc.
  • Company name: the company where the lead works is another key aspect for lead scoring. If we sell Software As A Service (SaaS) that costs €4,000 per month, we already know small companies won’t be able to afford it no matter how much they want it. Now, the name of the company itself is difficult to assign points to because it likely won’t tell us anything about its characteristics.  To get around this issue, you can use an external rating system for the companies you target. Alternatively, you can do the ratings manually through research.
  • The number of employees in the company: this is one of the fields that’s usually included in the form when a lead downloads content (an eBook, webinar, etc.) so we can get an idea of how big their company is and be able to assign them points automatically. Going back to the previous example, if a company has more than 1,000 employees, we will give it lots of points because we know it can afford our service. On the other hand, if a company has between 1 and 10 workers, we wouldn’t give it any points, or we’d give it negative points as we know it can’t afford our service.   
  • Industry: the industry in which a company operates is usually very important in the sales process. For example, say we know 40% of our clients are from the insurance industry, and 15% are from the banking industry. In this case, we could assign 10 points if the company operates in the insurance industry, 8 points if it operates in the banking industry, and so on. 
  • Country: Is the country where the lead’s company is based important to the sales process? You bet. For example, imagine our company is targeting the northern European market but has set three specific countries as a priority. In this case, you could assign a rating score depending on the country (country A gets 10 points, country B gets 8 points, country C gets 6 points, and so on). 

These are the most common fields in the lead capturing form and are usually valid for any company. Now, for a specific company, we can think about what additional attributes the lead may have that could be valuable to us. For example, say we sell Software As A Service (SaaS) that performs a complementary function to existing accounting software. And if a company has a financial system like SAP, Microsoft Dynamics, or Sage, the likelihood of it buying our SaaS is much higher. On the contrary, we know that if they don’t use an ERP (and manage their accounting through Excel), it’s highly unlikely they’ll be interested in our service. So if that’s the case, we could include the following qualifying question into our content download form: “What system does your company use?” We’ll give them the following options: SAP, Microsoft Dynamics, Sage and Excel. And depending on what the lead selects, we can assign a low or high number of points. 

2. Behaviorial criteria for lead scoring

The behavioral criteria refer to how the lead acts concerning our company. Without forgetting our ultimate final objective, to sell our product or service, we’re more interested in a lead that shows a lot of interest in our company than one that practically shows no interest at all, right? So, the criteria for assigning points based on behavior means rewarding leads that exhibit our “desired” behavior, AKA showing a lot of interest in our product.  For example, based on experience, we know the user is much more receptive to our marketing if they’ve visited certain key pages of our website, which could be the product/service description page, the price page, or the request a demo page. In this case, we could assign a large number of points if the user has visited specific pages.

Here are some ideas of user behaviors for which we could assign a rating:

  • Key pages the user has visited: As I was saying above, a lead doesn’t have the same value if they visit the home page and leave compared to a user who visits the home page, the service page, the price page, and the contact page (even if they don’t fill out the form).
  • Type of requests made by the user: generally, a user visits our website and exhibits “passive” behavior by consulting pages, reading articles from our blog, etc. All this takes a long term and we ultimately learn nothing from it. But there might come the day when the user will perform one of our suggested actions, such as “request a demo”, “request a quote”, or “Contact us”. When that happens, we should give a high score because the user is expressing interest in our service/product. 
  • Content downloaded: we could assign more or fewer points depending on the content downloaded, looking at both the type of content and the quantity. For example, if the user downloads a guide on a “top of the funnel” topic, it would have a relatively low value. On the other hand, a download of “the definitive guide to selecting a SaaS” would be much more valuable to us because the associated purchase intention is much higher.
  •  Website visit frequency: here we’re taking into account whether the user visits our blog regularly or not. The idea is to give more points to a lead with higher engagement.
  • Interaction with our emails: in a lead nurturing strategy, we typically send several emails to the user based on their interests and other criteria. We may want to measure the user’s response to our emails and assign a score based on their behavior.

Note that all this is an “approximation” to reality. In other words, we establish scoring criteria based on behaviors that denote an interest in our product, but this interest is only our assumption. For example, we might think if a user sees certain specific pages, then they’re interested in our product. However, that might not be the case at all. The user could have visited these pages yet have no interest in making a purchase whatsoever. That said, statistically speaking, well-defined criteria and scoring scales should help us develop a point-based lead ranking. And ultimately, this should help us convert more leads into sales.

How to calculate the score of a lead?

Option 1: add up the points

From my point of view, the definition of the scoring criteria and the number of points awarded for fulfilling a specific criterion is still the convention of each company. Company A may decide that if a lead is a financial director, it will assign 5 points while company B may decide to assign the same lead 10 points. For me, the most important thing is to calibrate the scoring for multiple scenarios in relative terms. So for company A, if the lead has the desired position (financial director), we assign 5 points, but if it has a less desirable position (sales director), we only assign 1 point. And the same applies for company B: if the lead holds our desired position (financial director) we assign 10 points, and if not (sales director), we only assign 2 points.

Therefore, calculating the score of a lead should be as easy as adding together all the points derived from evaluating the conditions the lead fulfils, right? Well, I’ve seen this logic used in different companies, but I don’t personally think it’s the best approach. Allow me to explain: I recommend you don’t add the demographic criteria score together with the behavioral criteria score. Why’s that? Imagine that a lead with a really bad demographic score enters into your system. That means the lead doesn’t align with your potential buyer profile, and it’s extremely unlikely you’ll ever sell them anything. Now, imagine the same lead shows a lot of interest in your product, downloading multiple eBooks, attending several webinars, visiting key web pages, and so on. According to how we’ve defined our scores, the user would seem like a high value lead once we add all the points up, even though in reality, they are not of a high value at all. And this information would prompt the sales team to prioritize a low-value lead. 

Therefore, the most sensible option would be to add up all the points related to the demographic criteria. We then set a minimum score to consider the lead interesting, which the market team would then know is “qualified” to prioritize. Meanwhile, we add up the behavioral criteria and establish a minimum score for us to consider a lead interesting or “hot.” 

Option 2: Assign qualification based on conditions

Of our two criteria, notice that one indicates how good a lead is simply because of who they are: their position, their company, etc. And the other criterion indicates how good the behavior of a lead is according to what we have defined as valuable. Now, imagine you have an excellent lead with superb attributes (position, company size, etc.). We could classify this lead in five levels depending on its quality.

  • Type A Lead -> excellent: meets all our requirements.
  • Type B Lead -> pretty good: meets many of our conditions but not always 100%. For example, a lead who complies with everything except the size of the company. Say we want companies with more than 500 workers, and the lead works in a company that has only 300 workers.
  • Type C Lead -> average:
  • Type D Lead -> low quality:
  • Type E Lead -> a very low-quality lead that barely qualifies
  • Type F Lead -> adiscarded lead due to poor quality (does not meet any of our requirements)

With this method, we could program our system to evaluate how a lead complies with our requirements and, depending on the result, label that lead with a letter “A”, “B”, “C”, “D”, or “E.” I feel this makes dealing with leads more intuitive. A Type A lead has the highest quality, while type E is a poor quality user who complies with few or none of our requirements. 

We should also consider what happens when we don’t have all the necessary attributes of a lead to evaluate its score. In these situations, we’d have to assign a state of “indeterminacy” until we have all the attributes we need. We usually then employ lead nurturing techniques to encourage the lead to download more content. In the download form, there will be newly added fields to capture the required information and hidden fields for when we’ve already got the data we need. We do this through a technique called progressive profiling, although we’re starting to go a bit beyond the scope of this article now (if you’re interested in this topic, then please let me know as I value your opinion). 

How do you implement lead scoring?

Well, you may have realized by now that implementing lead scoring techniques requires that first, you have very clear ideas, and second, you have an advanced lead management tool available. There are dozens of tools out there that do lead management, and the most advanced of these include a lead scoring capability. Everything I’ve explained above must be programmed into a tool of this type for you to be able to assign the points of your choosing. Some of these tools assign their own points by default. But be careful here, because the standard criteria of the tool won’t necessarily align with the needs of your company. 

Some of the best tools for doing lead scoring include Hubspot (one of the best), Marketo (very good, but mostly used by enterprise companies), Active Campaign (similar to Hubspot but cheaper and with less functionality). Explaining these lead management tools in detail must also be left for another article.

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Marcel Odena

Marcel Odena

CEO at Magnetica Advertising | LinkedIn Ads Expert

Since 2013 I've been working in the Pay Per Click Advertising Industry. I manage Google and LinkedIn Ads accounts for several B2B companies. I work to deliver results to my clients as well to contribute to do better B2B marketing. I like to learn and share my knowledge at the same time.