The 1992 classic film “Glengarry Glen Ross” had a memorable opening scene in which a big-shot real estate salesman descends from corporate to browbeat a group of failing Chicago reps for their poor performance.
At one point during his rant, a rep remarks, “the leads are weak” — prompting the withering retort: “you’re weak.”
But, in an almost tacit admission that they’re right, he presents a stack of leads tied with a gold string — the “Glengarry leads,” which he promises to the top salesman after a week. Each of them fight for those leads, because as anyone in sales knows, not all leads are created equal.
But if you don’t have access to a stack of handpicked super leads, how do you figure out which of the leads coming into your business are good and which are junk? It’s not easy — a lot of factors go into qualifying. But a lead scoring model will condense everything and make it easier to spot the prospects you should focus on.
To create your own lead scoring model, check out our guide, then explore some lead scoring software options to set up your own.
Overview: What is a lead scoring model?
A lead scoring model refers to a system to evaluate and rank leads based on how likely they are to become a customer.
Lead scoring models are a vital part of lead management, allowing businesses to identify the highest-quality leads so the sales team can focus their efforts on nurturing them, rather than waste their time chasing dead-end leads with low conversion rates.
Lead scoring models typically give “points” to individual leads based on factors such as how much interest they’ve shown in the product, whether they have the budget for it, whether it’s a large enough opportunity to be worth your time, what kind of time frame you’re working with, and some factors that are unique to your business.
Finding the right lead is important not just to get a sale, but also for customer relationship management. If you’re closing unqualified leads, you may find they cancel orders later, and your overall retention numbers will be so low you’re constantly trying to replace your customers.
How to calculate a lead score
How you score leads is entirely up to you, but many companies score theirs on a scale of 1 to 100.
They may rank certain factors higher than others — for example, based on past sales data, Company X has found that customers who sign up for their newsletter on their landing page are 25% more likely to convert than other leads, so they may rank that engagement higher than others.
4 great lead scoring models and how to use them
Don’t just copy a lead scoring formula from someone and use it in your business. Other companies don’t have the same business model, customer base, product line, or marketing strategy as you, so you must create a lead scoring system that fits your business.
However, by studying a few scoring programs, you can come up with some ideas on what yours should look like.
Model 1: Website visitor scoring
This is one of the most common lead scoring methods. If you’re trying to identify sales leads from people who visit your website, zero in on which parts of your site they interact with and their general behaviors.
Signs they are interested in your products include browsing your pricing page, providing their email in exchange for a discount, or adding items to their shopping cart. Other signs of interest, although less so, and they should be scored lower as a result, include reading a blog post or clicking your “about” page.
Here’s an example of what this scoring system might look like for an e-commerce business:
- Add products to shopping cart (but not buying) – 20 points
- Provide email in exchange for discount – 10 points
- Download PDF – 7 points
- Visit the pricing page – 5 points
- Read a blog post – 2 points
- Visit the “about” page – 1 point
When you should use this model: This scoring method is best for e-commerce and other online-based businesses that generally get their leads through online marketing efforts and search engine optimization.
Model 2: Suitability and activity
You don’t have to use a numbered scoring system.
Online marketing and digital advertising firm Cyberclick uses a visual system that measures the level of interaction with the website against the demographic profile of the lead — in other words, leads who have a profile that makes them a strong fit for the company and who have interacted heavily with the site are the best candidates for conversion, whereas poor fits who don’t interact with the company are the worst candidates.
There’s a range of moderate but not excellent candidates in between, such as those who don’t make a great fit in terms of profile but show a lot of interest in the site, as well as those who aren’t interacting but fit the company’s profile, indicating they make good secondary targets.
Here’s a generic example of what this scoring system might look like:
When you should use this model: This method is widely applicable, so regardless of your industry or business model, this should help you identify good leads. However, if you think a more detailed point system is necessary, this might be too simplistic for you.
Model 3: B2B scoring
When it comes to B2B sales, the person you connect with in a company is everything. A business could be the perfect fit for your product, but if you’re talking to the wrong person, the deal can fizzle. As a result, some companies score leads based on a person’s job title, department, or role in a company.
For example, a vice president would be worth more points than an HR manager, because they have more authority to make a purchasing decision. Or you might value people in the IT department more than those in marketing since you sell small business cybersecurity products.
You might even add points based on how many employees a company has if you sell premium products at enterprise prices.
Here’s an example of what this scoring system might look like for a firm that sells IT services to small businesses:
- Business size:
- 1-20 employees – 10 points
- 21-100 employees – 5 points
- 101+ employees – 2 points
- IT – 10 points
- All other departments – 1 point
- Vice president – 10 points
- Manager – 5 points
- Analyst – 1 point
When you should use this model: As stated, this model is ideal for B2B lead generation, because it’s focused on targeting certain job titles, departments, and business types. This wouldn’t work if you are focused on selling to consumers.
Model 4: Email engagement
Emails are great for lead scoring because it’s easy to see exactly how people are responding to your campaigns. Use email marketing software to examine the open rate, the number of click-throughs, the number of people who haven’t responded to numerous emails and therefore probably aren’t interested, and more.
With an email scoring system, not only will you identify hot leads with high conversion rates, you’ll also be able to more finely tailor future campaigns to increase the number of qualified leads you generate.
Here’s what a generic email campaign scoring system might look like:
- Click-through on a product – 30 points
- Click-through on a promotion – 20 points
- Click-through for any other reason – 10 points
- Email open – 5 points
- Not responding after 5+ emails – -25 points
When you should use this model: Businesses that heavily rely on email marketing campaigns are best served by this model, but even if you don’t often use email marketing, implementing this scoring system will help your team improve on conversions and perhaps justify expanding the amount of email campaigns you do.
Consult with your marketing team before implementing a scoring model
Successfully implementing a lead scoring model relies on coordination between your sales and marketing teams. Work together to develop customer profiles that define who you are most likely to convert. This way, you will be better informed when you determine how to score leads.
For example, if you’re a commercial drone manufacturer and your top customers are construction managers who want to use them for automated site surveys, your lead scoring system should provide the highest scores to those people.
Give top points to those who work at construction firms, serve in a managerial role, and have browsed your drone products, for example.
This is not a process you should rush, so schedule a day to get together with your salespeople and marketers to hash out a scoring system, and then launch a pilot program to see if it improves your conversion rate before implementing it fully.
The Blueprint has reviewed many of the top CRM software and lead generation software options, which may help you put together a lead scoring system that works for you.
View more information: https://www.fool.com/the-blueprint/lead-scoring-model/