For many businesses, a database of prospects and customers is one of their most valuable assets. But as your database grows, it becomes difficult to address each contact on an individual level and personalize your communication. As a result, contacts in your crm database will often receive the same marketing materials, regardless of what their interest level is.
One solution to the problem is lead scoring.
What Is Lead Scoring?
Lead scoring is a system that helps marketing and sales teams understand how far along the sales cycle a prospect is. It works by giving points to a lead if they meet certain criteria or perform particular actions. The higher the points the lead has — the more ready they are to buy something.
For example, if a prospect has been spending time on a particular product page, then you will know there’s a good chance they have an interest in that product. Points can then be given to the prospect for their behavior, thus increasing their total score.
Allocating points to the prospects lets you know they’re ready to convert. Likewise, if a prospect hasn’t visited your site lately, you can deduct points to indicate that they need additional nurturing or aren’t a good fit for your business.
The total number of points that indicate a prospect is ready to close is often arbitrarily decided, albeit by people who understand their sales cycle well. Alternatively, the optimal number of points can be decided by advanced algorithms that determine readiness from vast volumes of data.
Once a prospect has acquired enough points, you know it’s time to try and close the sale. This approach helps you to interact with the right prospects in the right way at the right time — maximizing your chances of converting your leads.
There are two methods to score leads:
Traditional lead scoring
Traditional lead scoring involves awarding or removing points according to an arbitrarily decided framework. Put simply, you decide how many points each lead will be awarded for performing certain actions and meeting other criteria, like job title, company revenue, and location. One advantage of this method is that you have full control over the scoring system; another is that it’s easy to make adjustments to the scoring framework as required. Marketing automation tools implement your lead scoring strategy so you don’t have to score leads manually.
Predictive lead scoring
With predictive lead scoring, computers determine how many points each lead is awarded. Based on the contacts in your database that have already converted into customers, scores are attributed based on patterns in demographics and behaviors. This is known as machine learning.
The main advantage of predictive lead scoring over traditional lead scoring is that it can spot trends and other key data points that are easily missed, like their online shopping habits and other behavioral data. For example, prospects in a particular location may be more or less influenced by seasons than others. Perhaps store owners will see an increase in revenue in the summer due to an influx of tourists with disposable income, thus making your product more affordable. Such information could easily be missed by human eyes, but the algorithms of predictive lead scoring are more likely to recognize it.
However, the main disadvantage of predictive lead scoring is the large database required to get accurate results, with accurate customer conversion tracking in place.
After each lead is given a number of points, the next question is what to do with them. How has lead scoring made it any easier for you to work with your large database of leads?
By leveraging segmentation and lead nurturing.
What Is Segmentation?
Segmentation involves separating your leads into groups, and in this case, this is based on their total lead score. This helps make the database much more manageable because it allows you to interact with your prospects according to which categories they have been placed in.
Lead scoring not only gives you information on how close a prospect is to buying, but it can also give you other information, like details on specific products your prospects are interested in. Lead scoring software can monitor online behavior like which of your website’s pages a prospect has visited. So, if they have been looking at product pages in a particular price range then you would have an approximation of their budget. This information then helps you interact with present offers that are more likely to appeal to them.
What Is Lead Nurturing?
Most of your website’s visitors will not be ready to buy when they visit for the first time. Many will be looking for information or an answer to a question. Others will be browsing with the intention of potentially buying in the future, and others might be shopping around and comparing you to the competition. The remaining fraction of visitors that are ready to buy from you still need to be approached with the right sales methodology.
In some cases, your leads will need to be guided through the sales journey. They may need to have their questions and reservations answered. They may need to be educated on your products to help them understand how they will benefit them. When the prospect is ready, you will need to approach them with a suitable offer, but doing so too soon could cause them to go cold. Alternatively, if you don’t interact with a warm lead soon enough, you might lose them to a competitor.
Lead nurturing (whether done manually or using marketing automation) guides prospects through the sales journey while building your relationship with them.
Maximize Effectiveness with Automation
As you grow your database and get more leads, lead scoring, segmentation, and nurturing can become too time-consuming to be done manually. Thankfully there’s a solution that makes it relatively effortless.
Recent years have seen a surge in the popularity of marketing automation, thanks to platforms that have become advanced enough to offer powerful features that help to make a difference. Marketing automation platforms and customer relationship management (CRM) software helps marketers manage their database and arrange for certain interactions to be performed automatically.
Has somebody just signed up for your newsletter? A welcome message can be automatically sent to them. Or perhaps a prospect has requested a demo of your software and you want to ensure their inquiry is acknowledged ASAP. It’s easy to see how this can help save a lot of time when working with a large database, but time is not the only benefit of using marketing automation in conjunction with lead scoring.
With marketing automation, you can ensure your leads are interacted with at the right time and in the right way. You don’t need to wait for a sales rep to be available to contact them or for admin staff to work through lists of emails.
Instead, the appropriate material can be sent at the right time according to predetermined criteria.
Automation allows for impressive personalization, helping to ensure you’re pushing the right buttons. It also means that things are done accurately with little to no human error.
Tracking and monitoring the touchpoints with prospects are also made easier, giving you more valuable feedback to help you sell to individuals, and empowering you with information that will help you create and optimize current and future campaigns. Plus, your team has more time to spend on strategy and other important aspects of your campaign instead of spending countless hours sending emails and performing other menial tasks.
When combined with other modern marketing methods, automation can help improve your efficiency and your effectiveness, reducing costs and increasing revenue.
Lead Scoring Helps Your Bottom Line
Lead scoring makes it easier for you to manage your large database of leads, especially in conjunction with other modern marketing methods. Lead scoring can help save many hours, helping to reduce staffing costs and allowing your team members to focus on more productive activities.
It also helps ensure your prospects are interacted within a timely manner and in a way that is most appealing to them. Perhaps most important is that this leads to an increase in conversions because of the more personalized and accurate approach.
If you are interested in lead scoring, consider CRM software that will help you manage your database and automate your processes. For a relatively small investment, you may be rewarded with a significant boost to your bottom line.