What is Lead Scoring Actually and Do You Need It?

What is Lead Scoring Actually and Do You Need It?

Do you know if your list is engaged and what part of them is ready to take an action?

One of the biggest challenges for small business owners is to approach the right audience with the right offer at the right time. This is why marketing automation seems like the best solution – and it is. Apart from knowing your email open and click through rates, you have the opportunity to follow your contacts’ actions throughout all your campaigns. The problem is taking action and identifying those real prospects that are ready to be presented with a great offer.

If you are a small business owner, you might have never heard the term “lead scoring”. But with the rise of CRM and marketing automation software, it is starting to appear on an almost daily basis around you.

What is lead scoring?

Lead scoring is a procedure sales people use to analyze if a prospect is ready to become a customer and be contacted with an offer. I call it a procedure because it was around long before any software. At first, it was more of a psychological thing – a sales person needed to “feel” if the person in front of him was ready to buy something.

Lead scoring is the process of assigning a score based on actions taken by the contact. Those are the important steps that they took, moving forward in your sales funnel. For example, if they downloaded a free ebook, signed up for a demo or free webinar, visited your sales page a couple of time, opened and clicked on your email offer.

How does it work?

Put simply: It tracks a contact’s interactions with your content and assigns a score based on predefined triggers (criteria).

Some CRM softwares would have an algorithm that doesn’t require any action from your part. They analyze the data you input in the software, combined with the actions a contact has or has not taken. Others would only work if and based on the criteria you defined – ONTAPORT is among them.

Keep in mind that lead scoring is not an instant solution – it needs time and interactions in order to start showing a relevant picture. This is because the script would not go back in time and score past actions – it will trigger as soon as one of the criteria is performed. That makes it so complicated for most businesses to understand – and implement. Because as soon as you realize what is the power of having the possibility to assign score to your leads, you want to use it NOW. But you also want to have valid data and hot leads ready to be contacted at the very same moment. Some software solutions have a workaround that (Ontraport tip – add lead scoring rules to a sequence, assign all your contacts to it and voila!).

Do you need lead scoring?

If you are using a marketing/business automation software, chances are you are going to rely on prospect scores sooner or later. Designing and implementing a good lead scoring strategy now would allow you to be one step ahead of competitors in a couple of months.

Here are the most important questions you need to ask yourself now – What would you do if you knew that people are interacting a lot with your content? What actions would you commence? Would you contact them with a special offer or add them to a group of special prospects? If you know just how to continue with the information at hand, you are ready to start the procedure.

How to identify important lead triggers?

Here are two successful ways that I use to identify a good trigger combination: follow the ideal customer or follow the funnel.

  • Ideal Customer triggers: As the name suggests, we start exploring the trigger options based on your idea for the ideal customer. Ask questions related to his actions – How often would she open your newsletters, Has he ever downloaded something from your website, How many interactions would it take for them to consider buying something from you? Keep a clear image of the ideal customer – your buyer’s persona – in mind when answering the questions and you would have a list of valid triggers.
  • Funnel-based triggers: If you have a clear sales funnel (and I hope you do), it might be even easier to identify the triggers. Each step that shows a person is moving forward needs to have a score assigned – the deeper they go into the funnel, the higher the score. It is really helpful to know basic stats like – a newsletter subscriber becomes engaged reader after reading/opening/clicking on three/five/ten emails. A rule of thumb is to track pages on your website (or landing pages) that a contact has visited and score accordingly (fyi, a demo is worth more than a free ebook). Just use that knowledge to assign a lead scoring rule.

Setting up your system

Now that you know what lead scoring is, you have an idea how you could use it in the near future and a list of triggers that are valuable for identifying a sales-ready prospect, you need to combine all this data into a winning lead score system. There are just some last details for you to decide on:

  • Are you going to have a maximum lead score? Is it going to be 5, 100 or 10 000? – This is important because it would guide you to evaluating the value of each action taken. For example, an email open could be worth 1 point, a click – 5, a download 20, and a demo request – 100.
  • Do those triggers become less relevant in time? Do you want to decrease their importance after a month or a week? – Some softwares, like ONTRAPORT, would ask if you want to decrease the score by certain amount every day. I would recommend using it for basic triggers like email opens and clicks, and not for the most valuable actions a contact can take – request a call/trial/demo.
  • When are you supposed to take action? – What is YOUR trigger score depends on the maximum lead score you decided to have. Identify 3 groups of potential customers – you can call them Cold, Warm and Hot prospects. Then create a strategy for each one of those groups – special offers, additional information, and so on.

As you can see, lead scoring is an important step forward when you are building your marketing automation strategy. It allows you to identify the best prospects, send them relevant offers and material based on their current position in the funnel, and even convert them easier and at the right time.

Question

Do you use lead scoring? What is your most successful trigger and your most valuable recipe?

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