One of the most common sources of friction between poorly aligned sales and marketing organisations is sales’ perception that the quality of leads generated by marketing is poor – and marketing’s frustration at sales inability or refusal to follow up on the “leads” they have generated.
CSO Insights Prove That Lead Scoring Improves Revenue PerformanceIt’s a stand-off that must be resolved, and one of the best ways of doing it is through the adoption of a lead scoring system that clearly defines – to the satisfaction of both parties – what a “good” lead looks like, and what sales commits to do with it.
The latest research from CSO Insights (based on an international sample of more than 600 companies, many of them technology-based) confirms the value of adopting lead scoring – and demonstrates a clear positive impact on win rates and revenue performance.
Can you really “informally” score a lead?
The word is clearly getting around – CSO Insights found that nearly two-thirds of the organisations surveyed claimed to have implemented some form of lead scoring approach. But within this generally positive trend, only 25% of the organisations surveyed had adopted a formalised approach to lead scoring.
The remainder claimed to have implemented an “informal” approach to lead scoring, but I’m inclined to believe that this is something of a fudge. I’m not sure how you can construct a formally documented agreement between sales and marketing (which, after all, is what is really required) based on an informal scoring process.
Having said that, some attempt to score leads is better than none. It’s just that the greatest benefits come from a formally and consistently implemented process. So what happens when a lead scoring system is implemented?
Key benefits of lead scoring
The first effect is that the number of leads passed to sales from marketing typically declines. Whilst at face value this may seem to be a bad outcome, in practice it means that leads that had no chance of ever closing got filtered out before sales could waste any time on them.
Because the leads passed to sales were of higher quality, sales follow-up rates were higher, and the conversion rate to first meetings also improved.
But the most dramatic improvements came in the win rates of marketing generated leads that were accepted by sales: the performance improvement ranged from 1.5 to 3.5 times over organisations that had not implemented lead scoring – and those with formal lead scoring systems showed the greatest gains.
Improving relationships and performance
Adopting formal lead scoring doesn’t just improve relationships between marketing and sales – it improves revenue performance. So what’s the best way of implementing the process?
First, sales and marketing must agree on what an ideal prospect looks like. This is the essential foundation for lead scoring. We’ve found that a relatively simple approach works best – and you can download a guide to the process here.
Next, you need to build a lead scoring process based on identifying the most common characteristics of your most valuable prospects. This is typically a combination of attributes and activity.
Attributes are associated with what you know about both the prospect organisation and the potential opportunity. These are often demographically based (size, sector and location), but I’d urge you to look for and capture the non-demographic structural, behavioural and situational factors that typically define a great prospect.
Activity is associated with what the prospect has done – how often they have visited your website or interacted with you in other ways, which materials they have downloaded, which pages they have visited, etc.
Keep it simple – and do it together
There’s a real danger in over-complicating this: today’s marketing automation platforms allow you to score hundreds of variables. My advice, particularly if you are lead scoring in a formal way for the first time, is to keep it simple. Just focus on a handful of the most obvious key indicators. You can always refine the process later.
My second and critical piece of advice is that this must be a joint exercise between sales and marketing. If marketing try and do this on their own, the exercise will inevitably fail. Anyway, it’s a great opportunity to get sales and marketing around a table and to discuss and agree what a good opportunity looks like.
By the way, in doing this, you won’t just emerge with a framework for scoring leads that all parties have agreed to you – you’ll also end up with some actionable insights about the sort of campaigns you ought to be running.
Don’t forget to download the “ideal prospect guide” – and please share your experience of lead scoring…
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