What Is Lead Scoring?

What Is Lead Scoring?

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What Is Lead Scoring?

What Is Lead Scoring?In business, not all leads are created equal. Some will be red-hot and demand prompt

attention; others will be lukewarm and may need nurturing before they can be actively

sold. Then there are those people just too early in the information-gathering phase to

consider them sales-ready leads.

The big problem is separating the “hot” from the “not” business leads. It can be time

consuming and, if not handled correctly, a bit of an inexact science that may result in

lost opportunities.

That’s where lead scoring comes in. In very basic terms, lead scoring is an objective

system for ranking leads to determine which ones are ready to convert immediately,

which ones need further nurturing, and which ones are highly unlikely to buy. In other

words, lead scoring helps you determine which leads are hot — and which leads

are not, allowing your sales and marketing teams to put their efforts into the best

opportunities for revenue generation.

An automated lead scoring system is a rules-based process that takes into

account the online behavior of your sales prospects. Actions like opening an email,

filling out an online form, attending a webinar, visiting your website, or clicking a link

add to a lead’s overall score. The higher the score, the more probable it is that a lead

will convert. Lead scoring ensures that the best leads are passed on to your sales team

and prioritized based on revenue potential and buyer readiness.

Table of Contents

Context: Answering an Important Marketing Question. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

How Lead Scoring Works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

How Does a Business or Organization Benefit from Lead Scoring? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

The Marketing Qualified Lead (MQL). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Lead Management Software. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

What to Look for in a Lead Management Tool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Context: Answering an Important Marketing Question A great deal of marketing revolves around a question that is not always asked out loud

but is at the heart of many marketing campaign decisions: “Who is worth an investment

of resources?” Marketing budgets are finite. The bandwidth of both Marketing and Sales

teams is limited; therefore, it’s important to know:

Which prospects deserve focus and expenditure of time or financial resources?

Which leads will pay back the marketing investment by generating revenue or

taking other desired actions, such as donating to a nonprofit organization?

Lead scoring is a tool that marketing and sales teams can use to determine which prospects

are worth the effort to follow up.

68% of successful marketers cite lead scoring based on content

and engagement as most

responsible for improving

revenue contribution.

Source: The Lenskold and Pedowitz Groups

Companies that excel at lead nurturing generate 50% more sales-ready leads at 33% lower cost.

Source: Forrester Research

Organizations that use lead

scoring experience a 77% lift in lead generation ROI, over organizations that do

not use lead scoring.

Source: Marketing Sherpa

68%

50%

77%

LEAD SCORING STATISTICS

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What Is Lead Scoring?

A lead qualification process is one of the basic features of a good marketing automation platform.

By setting up an efficient lead qualification system, you can keep unqualified leads from clogging your

sales funnel and give your marketing and sales teams a clear path to accurately identify the hottest leads

and focus on prospects that need more information and attention to convert.

How Lead Scoring WorksTo understand lead scoring, first assume that a sales lead has been captured in a marketing automation

(or lead management) system.

The lead record contains the lead’s name, company, address, email, phone number — all pretty basic

information. At that point the lead is little more than a name. You don’t know if he or she is worth another

second of anyone’s time or a penny of additional marketing resources. Their score is 0.

Now, imagine that lead visits your product web page.

This action reflects some potential buying interest. As a

component of a marketing automation tool, a lead scoring

system can be set up to add a point to the lead score

based on the action of visiting the product page. If the lead

returns and visits the page again, the lead will then have 2

points, and so on.

FIGURE 1 shows how a lead can add or lose points over

time, depending upon positive or negative behaviors.

Common reasons for adding to a lead score include:

• Opening an email

• Clicking on a link in an email

• Visiting a web page

• Completing an online form

• Visiting the pricing page of your website

• Visiting a landing page

Keep in mind that this point system is completely

customizable. Your business or organization decides

which actions hold the most value for you and points are

then assigned to reflect that value. You’ll see how this

works a little later on.

FIGURE 2 shows an example of how a lead scoring rule

is implemented. In the iContact Pro Lead Scoring module,

the user is establishing a rule that adds a point to the

score if the lead has commented on a Facebook post one

time in the previous 5 days.

Conversely, a lead can also lose points, for instance, by

consistently not opening emails over a period of time, or

visiting your company’s careers page (a signal that they

might be interested in a job with your organization, not a

purchase).

Lead scores can also be created based on demographics or

location. Custom criteria could include: company size, job title,

geography, gender, income, and previous engagement.

FIGURE 2. A social media-based lead scoring rule setup in iContact.

Does nothing for 90 days -1

Score = 13

FIGURE 1. Lead scores change over time, with positive and negative lead behavior affecting the score.

Visit web site +1

Score = 3

New Lead

Score = 0

Open Email +1

Score = 1

Click on 2 Links +2

Score = 4

Does nothing for 90 days -1

Score = 2

Visits 10 web pages +10

Score = 14

Click on Link +1,

Score = 2

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What Is Lead Scoring?

For example, a retailer specializing in women’s shoes might automatically give every woman who

registers with their site an immediate score of 10 if she lives within 5 miles of a retail location.

Proximity means there is a greater likelihood of an in-store visit, and that lead is worth a little extra

effort. A man living 25 miles away and registering on the site would get no points, initially. Nothing

against him. He’s just more of an unknown; he may be interested in making a purchase, perhaps for

a wife or girlfriend, and may have serious buying intent, but he would have to demonstrate that with

more positive online actions before he merits a designation as a “hot” lead.

Lead scoring takes into account factors such as email, social media

and website engagement, along with other details such as job title,

geography and demographics when evaluating the quality of your

contacts. Lead scores can then be used to assign the type of content a

subscriber receives or raise a flag to your sales team that the prospect

is ready to be contacted about a specific product or service.

FIGURE 3. Lead scores should determine the level of marketing investment, with the highest scoring leads receiving the most resources.

How Does a Business or Organization Benefit from Lead Scoring? An organization benefits from lead scoring when its marketing team uses

the lead scores to make campaign decisions. Otherwise, it’s just another

number. Assuming the marketing team sets up scoring parameters that are

meaningful, with lead scoring, an organization can:

Avoid wasting time and limited resources: Low-scoring leads

do not deserve the most attention. You can keep marketing to

them in the hope that they eventually convert, but your best

efforts should focus on high scorers.

Target campaigns: Scoring parameters can push up scores

for targeted segments. For example, people who click a link

and live in a specific zip code can be set aside for specialized

messaging.

Systematize and scale marketing: Once implemented, a lead

scoring system can scale to handle large numbers of leads

without time-consuming manual work. This capability helps a

business grow without having to hire too many extra people.

Demonstrate tangible marketing results: Defining success in

marketing can involve abstract and subjective parameters. Lead

scoring gives the marketing team a quantifiable way of showing

exactly what they have done right. For instance, marketing

might commit to generating 1,000 leads with a score greater

than 100 in a month. Then, they will either meet the goal or not

– nothing abstract about it.

Most Actions:

Highest scores. Most qualified. Deserve the most

marketing investment.

Fewer Actions:

Lower scores. Less qualified. Deserve some

marketing investment.

Little/No Actions:

Low scores. Not qualified. Deserve little or no

marketing investment.

What Is Lead Scoring?

The Marketing Qualified Lead (MQL)A lead scoring system allows a business or organization to better align the marketing and

sales teams to work more efficiently together to achieve the ultimate goal: conversions

Sales and marketing people may disagree about what exactly constitutes a “qualified” lead. Sales

often wants a lead that is truly ready to buy. A Marketing Qualified Lead (MQL) is a lead that meets

criteria set out by marketing, even if they are not actually pulling out their checkbook to make a

purchase.

One common practice is to establish a lead score threshold to be considered an MQL. Once a

lead reaches the MQL score threshold, it can be turned over to sales for direct outreach. Ideally,

this is accomplished through bi-directional sync with your CRM that makes the process automated

and efficient. The practice of handing over only the highest scoring leads ensures that sales

representatives invest time in contacting the most highly qualified leads.

Lead Management SoftwareA comprehensive Lead Management (or Marketing Automation) platform enables lead scoring to

be implemented efficiently. Usually, the software provides a graphic interface where the user can

set up if/then rules to assign lead scores in a workflow. The if/then rules are based on “triggers.”

For instance, a trigger like “clicks on email” might result in a point being added to the lead score.

A good lead management software tool integrates with customer resource management (CRM)

systems, making the lead reporting process seamless and automatic. For example, with iContact

Pro, you can automatically send any lead that reaches your score threshold directly to your sales

team via Salesforce to tell them that this lead is ready to buy.

The sync also works bi-directionally, automatically moving new leads and contacts from your

Salesforce CRM to iContact Pro for marketing programs. Whenever a contact's record is changed

in iContact Pro, the updated information is automatically pushed back into your Salesforce CRM

so data remains consistent across both platforms. This keeps both the marketing and sales teams

working in sync.

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Among B2B marketers, the #1 benefit of marketing automation is generating more and better leads.* Lead scoring should be part of any marketing automation platform you consider.*Pepper Global, Marketing Automation Trends Report 2014

Scoring for an MQL may involve assigning higher scores to certain criteria. For example, if an organization is targeting leads in a specific industry, then a lead in that industry might get a 10-point bonus. This pushes a lead in the desired industry to the top of the high- scoring pile right away for immediate sales attention.

+10

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What Is Lead Scoring?

What to Look for in a Lead Management ToolUse this checklist to evaluate and compare different lead management tools in marketing automation

platforms to make sure they have the features you need.

ABOUT ICONTACTSince 2003, iContact has been offering comprehensive email marketing solutions for businesses, nonprofit organizations, and educational institutions of all sizes. All our email marketing products offer award-winning customer support, 600+ professional email templates, and a reliable 97% inbox delivery rate. iContact Pro, our answer to the growing demand for marketing automation, takes email marketing a huge step forward with workflows, lead scoring, landing pages, and more. It’s the complete package to take your contacts on their journey from first interaction all the way through to marketing success.

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Lead Scoring Checklist: Rules-based lead scoring

Enables lead scoring based on social media activities

Time-based lead score reduction

Demographic/geographic scoring

Bi-directional CRM integration

List segmentation by score

Part of a comprehensive marketing automation platform

Remember: Too many leads can be as frustrating as too few. This is especially

true when the quality of leads hasn’t been properly ascertained. Red-hot

opportunities can get left on the shelf to wither because the sales team is wasting

its time with tire-kickers, and morale plummets when sales calls go nowhere.

Lead scoring is designed to give your organization the best possible understanding of a business lead’s potential and ensure any positive engagements are handled in a timely and professional manner.

To learn more about lead scoring or to request a demonstration of iContact Pro, visit www.icontact.com/pro

or call (877) 820-7837.