Lead scoring is the use of numerical values (scores or points) to determine the quality of your leads. You score each lead based on different characteristics like company attributes, website activity, email engagement, and others in order to identify, prioritize, and convert good leads faster.
The latest State of Marketing Report by HubSpot and other big names shows that the #1 priority for salespeople in 2021 was closing more deals (Surprised? Me neither.) Followed by “improving the efficiency of the sales funnel.”
Marketers often get caught in vanity metrics like website visits, time on site, email leads, and others that they forget the lifeblood of the business — revenue. Distracted by the numbers game, they often send bad leads to the sales team, slowing the sales processes and hindering the overall efficiency of the sales funnel.
Fear not, as we have the perfect solution for you, fellow marketer.
Implement it today, and your revenue metrics will go up as you become the new favorite person among your sales teammates.
This post will give you a complete understanding of lead scoring, its importance, and some practical ways to use it in your business.
So let’s just jump and learn how to get all of the benefits of lead scoring for your business!
What is a lead?
Before you start implementing lead scoring, you should understand what a lead is.
A lead is any person who shows interest in your products or services — a potential customer.
They have provided at least some information suggesting possible interest in buying from you. For instance, people who submitted a form on your website, downloaded an eBook, subscribed to your blog, or signed up for a free trial.
You might find some businesses call these people “prospects” or “opportunities” while others make a clear distinction between “prospects” and “leads.” Frankly, the terminology is not important as long as you clearly define what a lead means in your own business.
The easiest way to do that is to understand where the leads fit in your sales funnel. Grab a pen and paper and draw your funnel, then pin-point where the leads are in that journey and why:
Businesses might not be united when it comes to defining what a lead is, but they all agree on one thing:
The more leads you can generate, the more customers you get.
Focusing on lead generation should be among your top priorities, no questions.
However, not all leads are created equal. Did you know that, for example, 96% of your first-time website visitors aren’t ready to buy from you?
Someone coming to your website for the first time and leaving their contact information might not be the best lead to focus on right now.
Conversely, a person who has read all of your emails for the last 2 months and visited your pricing page is someone you want to call as soon as possible.
That’s why it’s essential to pay attention to the quality of the leads you are getting and prioritize the ones that are most likely to move to the next stage of your sales funnel.
And that’s what lead scoring will help you with.
Lead scoring definition
Lead scoring is the process of assigning points to your leads, so your sales team can prioritize the hottest leads and convert them to paying customers.
Lead scoring points are usually assigned based on 2 main types of criteria:
- Lead attributes — data like firmographics and demographics helps you match your leads to your ideal customer profile. The lead usually provides that data when they submit a form on your website. Then, you build your scoring based on how the lead compares to your perfect fit customer. For instance, if you are after CEOs, you can increase the lead score by 10 if the contact’s job role matches that value.
- User activity and engagement — you score your leads based on what actions they perform (or don’t perform) on your website, in your emails, and other web properties. For instance, if a lead opens an email, you increase their score by 3 points; if they download an ebook, you increase their score by 5; if they cancel a meeting, you decrease it by 10, and so on.
This process helps your sales and marketing teams see the most valuable leads and prioritize their efforts accordingly.
With an effective lead scoring in place, you can focus more time and resources on the leads with the highest score, ultimately increasing your conversion rate and getting more salesy.
Why should you score your leads?
Do not score your leads at your own peril.
Here are the top three reasons why you must start using lead scoring.
1. More effective marketing campaigns
According to a Gartner study, 70% of leads are lost due to poor follow-up.
That means you could be losing the majority of your potential customers without even realizing it!
Put in other words, you might be selling your products and services to cold leads while ignoring leads that are ready to make a purchase. Focusing on the wrong opportunities can cost you money and hinder your sales.
Implementing lead scoring can help you identify which leads are ready to purchase and maximize your chances of conversion.
This change can save you a lot of resources and minimize acquisition costs across your sales funnel.
That doesn’t mean you should throw cold leads in the garbage. Instead, all you have to do is put them into your lead nurturing campaign and give them more time to realize value from your business.
With Encharge, you can create segments for Cold and Hot leads and execute different automation paths based on the lead scoring:
2. Better alignment between sales and marketing team
You must make your sales and marketing teams work together as smoothly as possible to maximize your sales potential. If you do it properly, it should work as in the figure below:
Everything works seamlessly, and no leads are wasted.
To achieve that, you can implement a proper lead scoring strategy and automate it.
The end goal is to automatically send leads that reach a specific score to your sales team.
Your sales team can then close these leads without any hassle.
3. Increased revenues and better conversion rates
Improved efficiency across the sales funnel, better response time, proactive follow-up, and others are just the proxy benefits of implementing lead scoring in your marketing.
The most significant benefit is the increase that you will see in your bottom line.
That’s right, businesses that have implemented lead scoring have seen a 77% higher ROI on their marketing efforts than those not using it.
So what is it not to like about lead scoring?
Lead scoring models explained
Before you start implementing, you must choose the most suitable lead scoring model for your business.
We slightly touched on the topic already, but we are going to explore in more detail a few common lead scoring models:
- Demographic/firmographic model
- App activity model
Online behavior model
- Email engagement model
- Social engagement model
The demographic lead scoring model is the easiest one to implement if you already have the data.
If you know your ideal customer profile, then you can start scoring your leads based on the demographic or firmographic data that you collect for them.
You can create your lead scoring based on contact properties like:
- Job role
- Company size
You can request demographic data on your landing or registration pages to collect this information from your leads.
After that, you can increase the lead score for each desired demographic data point and decrease it for the leads who don’t fit your ideal buyer profile.
Fill in your ideal customer profile, and then jot down the positive and negative attributes. For example:
|+ Positive Score
|– Negative Lead Score
|Has the right job title
|Works in a different department
|Has the buying authority
|Is not a decision maker
|More than 25 employees
|Company is too small – below 5 employees
|Has subscribed to the newsletter
|Hasn’t opened any emails in the last 30 days
|Has booked a demo call
|Hasn’t visited any critical marketing pages
|Has visited pricing
|Cancelled a demo call
This model is mostly beneficial if you sell to a small group of customers or there isn’t a lot of digital engagement involved in your business.
App activity model
This model is based on actions your leads perform in your product.
For instance, if you run a task tool like Todoist, you can increase a lead score by 1 point each time a person creates a new task, and add 5 points each time a user adds a new project.
To use this model, you need a platform that connects with your app and can receive events (user actions). For example, Encharge plays nicely with your product activity, and you can connect it with your app using an API or Segment.com.
Then, build a lead scoring flow using Event Triggers:
Online behavior model
This model is similar to the app-behavior model. Still, instead of scoring your leads based on activity in your app, you score them based on their behavior in external properties/outlets.
These behaviors include things like booking a phone call, clicking on a Facebook ad, and others.
For example, you can increase the lead score if a person books a Calendly meeting with you, submits a chat request in Intercom, and others.
Not all marketing automation tools offer this feature, though.
But if you are looking for a reliable tool with tons of great integrations and features like this, you should try Encharge.
For example, you can set triggers when a lead changes a field name, book an appointment, creates new HubSpot contact, and so much more.
Email engagement model
Getting a person to subscribe to your emails is a huge win, but how do you know how interested are your email subscribers?
It’s simple — you track their email engagement. But, first, you need data like email opens, clicks, and replies.
Then, you build your lead scoring based on that activity. You can score leads based on any email activity or just specific emails.
This model is great for businesses with large email lists driving most of the sales.
Social engagement model
Some marketing automation tools like HubSpot allow you to track your social media engagement and score it accordingly.
This lead scoring model is best for B2C businesses like influencers, eCommerce, and other brands that rely on social media engagement as the main driver for their revenue.
Lead scoring calculating systems
There are 4 different systems for calculating your lead score:
- Manual scoring.
- Logistic regression lead scoring.
- Automated lead scoring.
- Predictive lead scoring.
Each has its pros and cons, which you’ll discover right now.
In manual lead scoring, the marketers do the whole job.
You’ll need to determine the key attributes you’ll be observing and assign points to each of these attributes (or actions).
After that, you can find out (manually) your most qualified leads and contact them (you guessed it, manually, again).
We highly recommend using automated methods instead of manual lead scoring. Manual scoring is old-fashioned and highly ineffective.
Logistic regression lead scoring
Logistic regression involves building a formula in Excel (or Google Spreadsheet) that will tell you the probability of a lead converting. It’s more accurate than the manual method and also takes more attributes into account.
You are looking at all attributes, how they interact with each other, the results they’ve brought in the past, and combining this knowledge to form predictions.
This is a better option than manual scoring but still extremely hard to execute if you have a large user base.
Automated lead scoring
This is the most common type of lead scoring. It involves setting up a set of predefined conditions or automations/flows in a marketing automation tool in order to score people based on attributes or activities that you define.
For instance, increase the lead score by 3 when the user opens an email. Decrease the score by 10 if they unsubscribe from your emails, and so on.
The total lead score is recorded in the profile of the user. Then, you can use that lead score to trigger automated emails, start flows, segment users, and more.
This is how the lead scoring in Encharge works, as we will explore in a bit.
Predictive lead scoring
Predictive lead scoring is a whole other story.
It uses machine learning, AI, and data mining to scan your data, find out which attributes qualified leads have in common, and assign proper values to them.
Here is how predictive lead scoring works.
- Setting key attributes – machine learning automatically finds out the attributes and a combination of attributes that will likely lead to a sale.
- Assigning probability score – after the machine learning sets up key attributes, it will assign the chances of conversion based on these attributes.
- Updating the algorithm – as more leads enter the system, the algorithm refines itself and updates to deliver the most accurate results.
Using it properly can do wonders for your business, as AI scoring can scan and observe your data from every angle.
The drawback is that AI-based lead scoring is only available in enterprise-level marketing automation tools. Plus, you’ll need a ton of user data for the algorithms to provide viable predictions.
Overall, the automated lead scoring model is your best bet. That’s why we will focus on it in the next chapter.
How to start with lead scoring in 5 clear steps
Calculating a lead score can be pretty confusing at first.
You don’t know what value should each criterion represent, and if you mess it up, your whole sales funnel can go down the drain.
Don’t panic. Below you will find out the best ways to score a lead from beginning to the end so you’ll know what to do at each step of the way.
Step 1: Choose your lead scoring model
The first thing you must do is pick the lead scoring model with which you’ll be scoring your leads.
We’ve covered the most common scoring models above, such as:
- Demographic/firmographic model
- App behavior model
- Online behavior
- Email engagement
- Social engagement
Of course, you can incorporate more than one scoring model, but we always suggest starting simple.
Once you pick a lead scoring model, it’s time to choose the critical actions and attributes you will base your scoring on.
Pro tip: If you are using a demographic model, we suggest creating a buyer persona to find out the demographics of your ideal customers. We recommend using our customer persona table:
Step 2: Choose the scoring criteria
Depending on which model you have selected, you’d have to create a list of all attributes and/or actions you will use in your lead scoring.
For instance, if you are using the demographics model, you might want to use “Job role”, “Country”, and “Company size”.
Using the email engagement model, you might want to use opens, clicks, and replies.
If you use Encharge for lead scoring, these attributes and actions will be set as triggers and used to create a lead scoring flow. So, for example, to score based on email engagement, you’d have to use the Email Activity trigger. We are going to explore this process in a bit more detail later.
Step 3: Assign point values to the criteria
Once you have the actions and attributes in place, it’s time to assign point values to each one of them.
Create a table with all of the attributes and actions, and add the appropriate scores.
Assigning the correct values can be extremely tricky, especially if you haven’t done any lead scoring before.
If you don’t have any reference experience, you probably don’t know what actions have the most significant impact on whether a lead converts or not.
You should talk to your sales team, and any other stakeholders involved in the marketing or sales funnel to facilitate the process. Your teammates work with new leads constantly and might know what factors make a lead qualified.
You can also check your CRM or look at the customer activity in your marketing automation tool. For example, look at the closed deals and your most valuable customers. Are you able to identify any common patterns?
For example, with Encharge, we have noticed that people that have imported at least 100 contacts and activated at least one flow are much more likely to convert, so we could assign 10 points to all trial accounts that start a flow.
Such table for Encharge could look something like this:
|Lead Scoring Model
|Attributes or actions
|US, UK, etc.
|Lead nurturing, Onboarding
|Replied to email
|Signed up for a trial
|Created a task
|Created a task
|Created a project
|Booked a call on Calendly
|Clicked on LinkedIn post
|Clicked on Facebook post
Step 5: Automate the lead scoring with a marketing automation tool
The last and most exciting step of the process is to implement your lead scoring.
If you are looking to score your leads manually, think again. It’s close to impossible, especially when you have a large list of 1,000+ leads. Can you imagine being at every step in the way and writing down the score manually?
I didn’t think so.
So that leaves the door open for the best option — automated lead scoring.
You will use a marketing automation tool. As your leads go down the sales funnel, their score will be adjusted automatically by the tool in the background, even while you sleep.
This will save you a ton of time, make the whole process much more accurate, and allow your sales and marketing team to focus more energy on closing the right leads, not scoring them.
Implement automated lead scoring in Encharge
To implement lead scoring in Encharge, start by creating a new automaton flow.
Then, select the triggers you want to score with and drag and drop them over the canvas area.
Encharge supports several different triggers. For instance, you can score a lead when they enter or exit a segment, when a user performs an event in your app, when they visit a page or engage with your emails, and a whole much more.
Lastly, connect the triggers with the Lead Score action step.
Now every time that the trigger fires, the score will be assigned to the lead.
For instance, if John satisfies the conditions of the “Active Subscribers” segment, he will enter that segment and trigger the “Entered Segment” step, which will result in him getting 5 points to his total lead score.
You can then view the total lead score in the profile of the person:
Lead scoring best practices
Let’s look at some best practices to get your lead scoring to the next level. Following these will help you gain a competitive advantage, maximize the results from lead scoring and make your strategy more effective.
Here are the 5 lead scoring best practices to use with your strategy.
1. Incorporate negative scores
Unfortunately, most marketers forget about negative lead scoring (also know as decremental lead scoring).
A negative lead scoring decreases the lead score based on specific triggers like failing to open emails, canceling a scheduled call, unsubscribing from your emails, etc.
For example, let’s say you’ve made an appointment with a lead, but the lead cancels it. This is a strong signal which usually indicates that lead is lost. That’s why you should either label it as lost or decrease its lead score.
Also, note that not all leads are looking to buy from you.
For instance, someone could just be looking at your careers page or downloading your content because they want to work for your company instead of being your customer.
That’s where negative lead scoring comes in very handy.
2. Set a marketing qualification threshold
Setting up a marketing threshold will allow you to alert your sales team when a lead score reaches a particular value. At that point, a lead is ready for selling.
With Encharge, you can send your leads to your CRM and even assign a follow-up task to your sales reps as soon as your leads reach that threshold.
To do that, create a segment using the Field condition. Select “Lead Score” and set the value of your threshold. For instance, when Lead Score is more than 20.
Then you can use the Entered Segment trigger step to automate sales tasks in your CRM:
3. Disqualify dead-end leads
Some leads will never convert into customers, no matter what you do.
This can be a case of a job seeker we’ve talked about earlier or a student that is just looking for your content to use in their academic research, or simply a business that is not a fit for your service or product.
That’s why you should set up an automatic disqualifying system for these leads.
For instance, you can set it up like this:
- Haven’t opened any emails in the last 60 days.
- Set a role as a student or unemployed.
- Haven’t read blog posts nor visited any other pages
This will help you maintain a database full of healthy leads and remove the time wasters that would never convert to customers.
To do that in Encharge, create a segment with the required criteria. Then build a flow that automatically tags this person as “disqualified” and changes the deal stage to Disqualified or Lost.
4. Collaborate with marketing and sales teams
Marketing and sales have to work together to devise the best lead scoring strategy.
Talk with your sales teams and identify what makes a lead good. Is it the number or the type of forms submitted, the pages they visit, the features they use? Salespeople have the data to help you create an effective lead scoring and choose the right lead score threshold.
Overall, it will make the whole strategy more rigid and help you increase your company’s conversion rates and productivity.
5. Check and refine your lead scoring strategy regularly
Lead scoring isn’t any “set it and forget it” kind of thing. You should revise it regularly to ensure you aren’t qualifying your leads too soon or too late. If you’re qualifying tons of leads, but only a few are converting, you have a problem.
It probably means that your threshold or individual values are set incorrectly, and you need to make a change as soon as possible.
Ideally, you’d get your marketing and sales team together and discuss it with them. They will most likely give you valuable insights on what to refine.
Lead scoring — because not all leads are created equal
Lead scoring can segment your leads based on their likelihood to convert, make your sales team more efficient by prioritizing the right opportunities, and help you deliver delightful customer experiences.
Do not wait to implement lead scoring in your business. Get the ball rolling today and start closing more leads.
Sign up for a free 14-day trial with Encharge and create your first automated lead scoring flow.