Saturday, December 6, 2008

Lead Scoring; Points, Ranks, and Sales Handoff

Everyone uses the term "lead scoring" in demand generation. It's definitely a foundational concept for the industry, but under the covers, there are (or should be) two things happening, only one of which is scoring. The goal, of course, is to look at your prospects, and understand whether they are the right person (explicit scoring) and/or are showing the right level of interest (implicit scoring). But, implied in this is the assumption that you will do something different with those that score high from those that score low.

If that's the case, and you are looking to do something different with some leads than others, you need to think about "lead ranking" as a core part of lead scoring. Let's look at an example. Say you want to divide up your leads using explicit (fit) criteria into As, Bs, and Cs, and then divide your leads using implicit (interest) criteria into 1s, 2s, and 3s. Then, the A1s would be passed to sales, the A3s would be nurtured, the C1s would be cultivated by inside sales to get to the right contact, and the C3s would be dropped (obviously the other categories would be dealt with also, but for the sake of simplicity bear with me).

Here's the challenge. We're now looking at two distinct undertakings:

  1. Finding the right mix of criteria to score the leads in order to determine whether they are A, B, C, or 1, 2, 3. (See for a discussion on why you really need both dimensions of scoring)

  2. Building the business process for appropriate follow-up, nurture, or cultiviation of the leads once it has been decided that they are an A1, A3, or C1.

These undertakings are actually very separate, and both will need a lot of tuning over time. As your website changes, you launch new marketing campaigns, or you tweak the relative weights of one criteria over another, the scores of leads will change. Likewise, as you add sales people, change territories, or alter quotas, you may wish to send more leads of lower quality, or less leads of higher quality.

Separating the "lead scoring" - ie assigning 0-100 points based on activity - from the "lead ranking" - ie determining what is ranked as a 1, 2, or 3 - lets you build your business processes independent of any tweaking and optimization. Your field sales team may get A1 and B1 leads, your inside sales team may get A2, B2, and C1 leads, and you may route A3, B3, and C2 to your nurture marketing programs. Regardless of what you do to change your approach to scoring, or what the thresholds are for each rank, your team knows what to do when they see an A1 lead coming their way.

Not only can you better build your sales or nurture marketing follow-up processes based on abstracting the lead score from the lead rank, but you can look back at your sales successes after a few quarters, and by comparing the underlying score against the sales success rates, you can get good insights into whether you are able to loosen the ranking criteria and have more leads flow through to sales, or would be best to tighten the criteria and have less leads of higher quality.

This question is one of 8 critical lead scoring questions to consider when thinking about a lead scoring system.

Many of the topics on this blog are discussed in more detail in my book Digital Body Language
In my day job, I am with Eloqua, the marketing automation software used by the worlds best marketers
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Darin said...

Thanks, this gave me some more tools to help my clients with their scoring. I hadn't tried to rank the fit vs. interest like you do here. Very insightful.

Steven Woods said...

Glad it helped Darin, hope the implementation of the ideas goes well. Iteration towards an optimal solution is usually better than trying to design the perfect solution out of the gate. Good luck.