One of the biggest topics in most sales-based industries is lead generation. Lead generation is a key step in driving sales and business development.
What is a lead worth though? After all, not all leads are created equal.
Segue into lead scoring, a system that every business should have in place. What is lead scoring and how does it benefit your business? Lead scoring is assigning a point system for each new lead based on buying signals and strength of the opportunity. The score indicates a lead’s strength and therefore, their closing potential. Lead scoring utilizes automation to indicate how you should spend your sales resources.
Let’s say you’re a financial advisor and two inbound leads are created through your marketing communication.
The first lead is a local business owner with 100k in assets, looking for advice. The second lead a local employee with 10k in assets and the expectation that the right strategy will make him a millionaire.
The business owner has more assets, a more reasonable goal, and is more likely to appreciate your services. They get a high lead score.
The employee has far fewer assets and doesn’t seem to understand the services you provide. They get a low lead score.
Through lead scoring, your sales efforts will be focused on the better opportunity. Not only is the business owner more likely to convert, but he is also more likely to be a long term client. Because of his high lead score, your energy will be focused on the right prospect. Lead scoring helps you to prioritize your sales efforts.
Setting Up Lead Scoring
Chances are you’re using a CRM to manage your business. Many CRMs have a built-in way to assign lead scores. CRMs like Salesforce allow you to create rules that automatically score a lead based on a variety of factors when it enters the system. These factors can include how they entered your pipeline, their interactions with emails and landing pages, their job title, answers to questionnaires, and more. You can also assign points manually to a lead when they’ve had a good call or meeting.
How to Score Leads
How does a lead earn a high score? The easiest way to decide is by first knowing your niche. We’ll score some leads that fill out a questionnaire form on a landing page. The CRM will assign them points depending on their answers. Let’s use the local business owner and employee example that we commented on earlier.
Pretend your niche is local business owners with 50k or more in assets seeking a more consultant style approach to organizing their finances.
The business owner fits perfectly into your niche. According to the form they filled out they are local, own a business, have well over 50k in assets, and are seeking advice. By using the questionnaire, the CRM can assign this person a high lead score by assigning points to their answers.
According to the employee’s form, he is local, that fits one part of your niche. The employee, however, does not own a business, has less than 50k in assets, and is seeking someone with the ability to take their modest savings and make him a millionaire. None of these factors fit into your niche target. This means the CRM will assign them fewer points, resulting in a low lead score.
What if a local business owner seeking advice contacts you, but he only has 25k in assets? Leads that fit a significant part of your niche, but not all of it, get a medium score in the CRM. This shows there is potential for them to become a client but won’t take top priority with your sales efforts.
What if the business owner with 25k in assets was referred to you by a current client? While using your niche to score leads is the best method, there are other factors to decide as well. Referrals, for example, are leads more likely to convert into clients. So while he doesn’t have 50k in assets, he is entering your pipeline with interest and social proof of your services. You can use this information to manually improve their lead score. The business owner with 100k in assets will still take precedence.
To see how we implement lead scoring into our own lead generation, use the form below to schedule a call with us. We’ll show you how we use lead scoring to optimize our sales process.