How to Use Lead Scoring to Boost Your Bottom Line

If you’ve got a great customer relationship management (CRM) system, then it probably gives you the option to use lead scoring.

But what is lead scoring, exactly?

And how can it help your business?

Those are just a couple of the questions that I’ll answer in this article.

What is Lead Scoring?

Lead scoring is a way to prioritize contacts.

There are many ways that your marketing and sales teams reach people. In some cases, folks will fill out an online form to learn more about what you’re offering. In other cases, contacts will respond favorably to a cold call.

All of that effort gives you a catalog of candidates who might become customers.

But some candidates are more likely to become customers than others.

That’s why you need lead scoring. It helps you identify which of your contacts are “hot” and which are “not.”

The Importance of Lead Scoring

So where are you at right now?

Are you handling countless leads manually? Do you find that you’re spending way too much time on contacts who never become customers? Do you have plenty of marketing campaigns that provide contacts but you don’t know how to prioritize them?

If the answer to any of those questions is “yes,” then you already know the importance of lead scoring. It’s a business process that will save you time and money.

For starters, it saves you money by lowering your acquisition costs.

Remember, one of the most important questions you can answer in business is: how much does it cost to acquire one customer?

Once you’ve answered that, it’s your job to reduce that cost. As much as possible.

Lead scoring will help you do that by enabling your team to invest their time more wisely.

Additionally, lead scoring also helps you put in place a system that optimizes your sales and marketing workflows.

For example, your sales team might only reach out to contacts with a minimum score of 40. Contacts who fall under that score will go through a lead nurturing process via email marketing.

And when some of those folks get nurtured into a higher score, sales reps can contact them.

Finally, lead scoring also enables you to maximize your top line revenue. That’s because your team will focus on contacting people who will open their wallets.

How Do You Measure Leads?

As the name implies, lead scoring is often measured with a number. The higher the number, the more likely the contact will turn into a customer.

But how do you keep score?

By following how the contact engages with your business. Whenever the contact hits a marketing channel, the score increases.

However, some channels are more valuable than others.

For example, if somebody calls your business out of the blue and says, “I really want to buy this product you’re selling,” that’s an engagement that’s worth a whole lot of points.

You might give that person 50 points towards the lead score.

On the other hand, if somebody says “Yeah, I might be interested” in response to a cold call, that’s worth far less.

You might give that person 10 points towards the lead score.

There are plenty of other types of engagements as well, including:

• Filling out an online form
• Opening an email
• Clicking a link inside an email
• Visiting pages on your website

And more. 

It’s up to you to determine how much each engagement is worth. However, in some cases, your CRM might already use its own scoring system.

You can also subtract points to a lead’s score based on behavior. For example, you might take points away from people who unsubscribe to your email list.

By the way, the kind of lead scoring I’m describing here is called implicit lead scoring. It’s behavior-based.

Explicit lead scoring, on the other hand, is based on demographic and company data. For example:

• Job title
• Industry
• Location

Why is that important? Because, for example, your business might serve a specific industry. And contacts outside of that industry wouldn’t receive high scores.

If you’re in the food service business and primarily sell to restaurants, a lead who doesn’t work for a restaurant will likely have a low score.

Lead Scoring Model

If you’re starting lead scoring from scratch, you might wonder: “How do I get this ball rolling?”

Some companies predict the future by looking at the past.

They’ll take a look at common traits of contacts who ended up becoming customers. Then, they’ll build a scoring system with that info.

You can do that as well.

For example, let’s say you notice that people who clicked on a link in an email that offered a discount became customers 37% of the time. That’s a great ratio.

So, in the future, you’d give those people a nice bump up in their lead scores.

Do that kind of research for both implicit and explicit scores. You’ll come up with a winning formula.

Different Phases of Lead Scoring

Now, let’s take a look at the different phases of lead scoring.

Marketers use these five phases to identify where contacts/leads are in the sales journey:

• Contact – Information in a database with no qualifications. It’s basically just a name, address, phone number, and company details. You might have retrieved this contact info from a list you purchased or a business card you collected.
• Lead – Somebody who might be a marketing qualified lead (MQL) but hasn’t yet been qualified.
• MQL – Somebody who engaged with your business via a qualified channel. This person might have filled out an online form, downloaded a freebie, or subscribed to an email distribution list.
• SQL – This is a sales qualified lead. Your front-line sales staff has talked with the lead and determined that the person is part of your target market and  interested in making a purchase.
• Customer – Where you want to get to. This is somebody who gave you money in exchange for a product or service.

Further Qualifying Your Leads

Let’s say you’re running a business that offers multiple products or services. Somebody might become a customer for one product but not any of the others.

But that doesn’t mean that the person doesn’t want to buy one of your other products.

In fact, people who bought one product from you might be happy to buy another product if they’re satisfied with what they got the first time.

The point is: you need a system that qualifies people on a per-product basis. The way to do that is with tagging.

What is tagging? It’s a nifty little feature your CRM provides that lets you know which product the person purchased.

Let’s say you’re selling restaurant supplies and a lead purchased food-grade containers. In that case, you’d create a digital tag in your CRM called “Food Grade Containers.” Then add that tag to the person’s record.

But that same person hasn’t yet purchased a meat slicer. And your sales team thinks he might need one.

So you go through the whole lead scoring process again for selling that person a meat slicer. And you would tag the record with “Meat Slicer.”

Lead Scoring Tools

When it comes to digital marketing, the name of the game is automation. It’s best to automate as many routine and number-crunching tasks as possible.

That’s true with lead scoring as well.

The good news is if you’re using a quality CRM, then you’ve probably got a lead scoring system in place already. Now it’s time to use it.

However, if you’re brand new to this digital marketing thing, then you might not even have a CRM yet. In that case, you’ll want to get one with lead scoring.

Here are a few options:

• Zoho CRM – Even though it’s “free forever” (for up to 3 users), the free option doesn’t include lead scoring. So you’ll need to fork over at least $14 per month if you want that feature.
• Freshsales – Another affordable alternative to HubSpot. It offers a free 21-day trial and starts at $15 per month.
• HubSpot – A great choice when you’re ready to run with the big boys. Prepare to open your wallet, though: it’s $800 per month if you want lead scoring.
• Salesforce – It’s widely considered the “Rolls Royce” of CRMs. But you get a 30-day free trial to check it out. Pricing starts at $25 per month but expect that number to increase as you pay for add-ons.

There are plenty of other options on the market as well. Feel free to do some online research.

Wrapping It Up

Wrapping It Up

There you have it: a complete guide to lead scoring.

Now that you know the basics, fire up your CRM and see what it offers. Then, start using lead scoring to boost your bottom line.