Last year, less than half of forecasted sales deals closed in favor of the vendor making the forecast, according to CSO Insights, a research organization that tracks selling-related issues.
Losing half your deals is bad enough, but a significant portion of the losses result in a "no decision." Obviously, these kinds of numbers represent a significant expense for all companies, and sales and marketing leaders are eager to weed out deals that won't close so that they can deploy resources elsewhere. While there is no perfect solution to this business problem, lead scoring is one antidote.
Scoring leads is important so that companies can qualify business opportunities before investing precious time and resources in a sales process. To best prioritize your lead generation, though, you need to pick a lane, so to speak. There are multiple ways to qualify an opportunity and lead-scoring models vary, so let's outline some of the methods.
The intention behind scoring is to reduce qualitative observations to quantitative certainties, which involves assigning values to common customer behavior, such as downloading a white paper or attending a webinar. But scoring is more complicated than that. For example, the demographics of the person and company engaging in the activity are also important. Identifying someone with a title and a job description who is responsible for a business problem that your company addresses rates higher on the lead score than a regular employee at that company.
Typically, a company will assign values to customer behaviors and attributes that it can observe through a nurturing process. Attending a webinar, downloading certain literature, job title, having an active project with a budget and other criteria factor into the score. A vendor will typically also determine a threshold score to convert an immature lead into a qualified one -- at least from a marketing perspective, also known as a qualified lead or MQL. Many conventional marketing campaigns use this approach in making offers to suspects and scoring their behaviors.
But a customer's engagement with content, while it is valuable, is not diagnostic. A person may simply be browsing rather than buying. So while sales people rate leads qualified using a scoring approach as having higher quality, they continue the qualification process to ensure that a lead is sales-ready.
More lead information, please
Capturing additional information about a company will enhance a lead score and provide greater confidence to marketing and sales people about lead quality.
To capture additional company information, some vendors use various search and Web-crawling technologies that can find information supporting or contradicting lead status. For instance, a company declaring bankruptcy might otherwise be a good candidate for a product, but with its finances in disarray, it may not present a workable lead.
Existing customers and lead scoring
Every company has a great deal of raw material for lead scoring from its installed customer base. Existing customers went through a successful marketing and sales process, and analyzing the data from those processes can provide an accurate picture of an ideal customer and an optimized sales process. This amounts to scoring your customers to provide a template.
Unfortunately, many businesses do not save prior sales data in usable form for this kind of analysis. The good news in this situation is that it's never too late to begin collecting that data.
Horses for courses
The kind of lead qualification and scoring that a company engages in has a lot to do with its sales process and the products and services it offers. A company with a product line that is easy to sell and has a high close rate probably needs less well-qualified leads because it invests relatively little in a short sales process. In contrast a company with a known six-month sales process and an expensive product will want to highly qualify and score its leads, preferring to nurture prospects for a period of time to justify the resource investment.
Regardless of a business' lead development methodology, occasionally a prospect will show up with an open checkbook and demand a product on the spot. While unannounced "bluebirds" are always welcome, there are too few of them to base a business plan on.
Today bluebirds are rare, customers demand more from their vendors than a core product and vendors are naturally reticent about investing scarce resources in active sales campaigns. As a result, many vendors want to boost their odds of success. Starting a sales process with better-quality input is a good approach.
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