Lead conversion is a direct indicator of how successful your business is as it defines how many leads (prospects) are being converted into customers. A collaborative team effort must be made by your sales and marketing teams to convert leads at a successful rate. They must establish a blueprint to determine the status of all their leads in regards to where they are at in the buyer’s journey and therefore, how likely they are to purchase something. Knowing which leads to target will allow your teams to focus their efforts on individuals with actual buying potential and less time on those with little to none. Through some key best practices, you’ll be able to build a lead scoring model that will help define your ideal customer and likely lead to higher lead conversion rates.
What are the benefits associated with lead scoring and how does it impact lead conversion?
Lead scoring has a direct correlation with lead conversion, assuming you’ve built a trustworthy lead scoring model. Lead scoring can be defined as a methodology used by marketing and sales teams to determine the likelihood of leads becoming paying customers. Typically a score of 1-100 is assigned to a lead based on some key factors, which includes both demographic and behavioral data.
Demographic data includes attributes like job title, industry, location, and company size. This type of data is received directly from the lead as a result of them willingly giving this information to you. As an example, it can come from someone filling out a form on your website. On the other hand, behavioral data is based on actions a lead takes and can include information such as visiting your website, clicking links in an email or landing page, downloading content, or attending a webinar. Points are accumulated for each of these types of actions taken by the lead and will eventually hit a threshold score to determine if they are ready to be passed on to the sales team.
The threshold score will be unique to your company based on the leads you generate, so it’s critical your sales and marketing team do diligent research and testing to determine scores that make sense. A lead scoring model provides an objective way to rate leads as cold, warm, or hot, determine where they’re at in the buyer’s journey, and dictate the type of content they should be receiving within a nurture program that’s most effective given their status.
Why does lead conversion matter?
Lead conversion essentially is an indicator of how effective your marketing campaigns are in targeting and nurturing the right leads. Higher lead conversion rates equate to more revenue, so continually monitoring the rate at which leads convert to customers must be a top priority of your marketing and sales teams. As discussed above, a lead scoring model must be established to achieve desirable lead conversion rates. With a good lead scoring model in place, your company can reap some of the major benefits associated with it, significantly impacting the way your team operates. Below are some of the major benefits:
Higher conversion rates
When focused on higher quality leads, the likelihood of conversion is greatly improved. As a result, less time is wasted on leads who never convert. A lead scoring model with specific threshold scores will indicate which leads are sales-ready and will allow your sales team to handle them accordingly.
Lower marketing and acquisition costs
Lead scoring helps identify your ideal customer. That is, someone who is likely to make a purchase. By focusing more efforts on these individuals, costs associated with lower quality leads can be reduced.
Better alignment of marketing and sales teams
When both teams agree on a lead scoring model, it ensures everyone is on the same page and leads are processed in an objective manner.
Boost in revenue
Less time spent on lower quality leads = less wasted money. Saving both time and money can have a huge impact on your bottom line.
Lead scoring is a huge driving factor behind lead conversion. You must have a well thought out and thoroughly tested lead scoring model in order to have high lead conversion rates.
How can lead conversion rates be optimized by lead scoring?
As you can tell by now, lead scoring has a significant effect on lead conversion rates. But you now might be wondering how exactly to build a successful lead scoring model for your business. It’s critical you understand the two foundational aspects to it – demographics and behavior. The former represents who you want to do business with and the latter represents who wants to do business with you. Having both components work in tandem will help create a scoring system where your sales team prioritizes leads based on their score, and therefore, the most qualified sales-ready leads.
The major benefit of a lead scoring model is that it will objectively rate if a lead is ready to be passed to the sales team by scoring the actions they take. A point value is assigned to each action with their score being calculated in a cumulative manner. The more positive actions they take, the higher their score will be. The threshold amounts you set within your model will determine how each lead is treated once they hit them. So, let’s say the threshold score to become an MQL (marketing qualified lead) is 50 in your lead scoring model. If a lead reaches a score of 55, they should now be handled differently than they were before (and maybe in this example, they are now passed on to the sales team so they can work with them directly). Below are a few examples of what types of actions could contribute to a lead’s score:
- Clicks link in email = 2 points
- Visits a key webpage = 5 points
- Downloads content = 10 points
- Fills out content form = 15 points
- Fills out contact form = 30 points
- Attends webinar = 30 points
You’ll need to establish an automated process through the use of Smart Campaigns that looks for changes in lead scoring so that leads automatically move from one level to the next based on their actions.
This process of the transitioning phases of a lead is managed through Lifecycle Processing, where a lead’s lifecycle is defined by the progression from lead to contact. They will progress through the Marketing Funnel from the top (all leads start here), to the middle (where they’ve expressed some interest), and to the bottom (they are ready to purchase). You’ll need to set up system-based triggers (like when a score hits a certain threshold) and process-based triggers (something that’s set up by your team, like if a sales rep changes a lead’s status to “disqualified” based on their most recent interaction with them). The graphic below gives a good representation of what this would look like. The take home idea here is that leads need to be treated based on where they are at in the buyer’s journey, and having a good lead scoring model is necessary in processing leads throughout their lifecycle.
MAL = Marketing Accepted Lead
MQL = Marketing Qualified Lead
SAL = Sales Accepted Lead
SQL = Sales Qualified Lead
Customer = SUCCESS
Lead scoring and lead conversion go hand-in-hand. If you want to boost your lead conversion rates, you must address your lead scoring model. And if your lead conversion rates aren’t desirable or where you’d expect them to be, then you must be willing to make adjustments along the way. A lead scoring model is a foundational component of every successful business. It will dictate how high lead conversion rates are and ultimately, how much revenue your company generates long term.