How to Use Lead Scoring to Increase Conversions & Revenue
Jess served on the founding team of a successful B2B startup and has used a wide range of sales and marketing tools over the course of her 15-year career. She uses her industry knowledge to deliver the best answers to your questions about sales tools and sales management.
This article is part of a larger series on Sales Management.
Lead scoring involves creating and implementing a ranking system in order to be able to target your sales and marketing efforts on the prospects with the best chance of converting. This allows you to move hot prospects through the sales funnel and close deals more quickly. Learn how to do lead scoring in five easy steps, discover the best software tools to help you do it effectively, and explore examples of action.
1. Establish Your Lead Scoring Criteria
Lead scoring enables you to optimize your sales and marketing activities based on a quantitative score that comprises a lead’s rating. Scores can be manually or automatically applied to lead records as they are generated and continuously interact with your business.
Scoring criteria varies from business to business. But ultimately, your lead ranking system should measure the interest and quality of each prospect to determine whether it is a hot or cold opportunity.
The first step in finding the best prospects to pursue and nurture is to define what factors characterize the best leads. A solid lead will have a combination of three major factors: they will be a good fit for your product or service, have shown interest in what your company offers, and have the capability to purchase the product or service.
Good Fit
A common way to establish whether or not someone is a good fit for your business is by creating customer profiles. Also known as “ideal buyer types,” these profiles represent your business’ most common or most-desired types of customers based on demographics, behaviors, and priorities. They are the audiences you target in marketing or sales campaigns and dictate the messaging and communication channels you use.
Leads that are a good fit also have an immediate need for your product or service. For example, insurance policyholders usually don’t shop around until their policy’s expiration date approaches. Therefore, even if they are a good fit based on your customer profiles, they may not have to renew for many months, and so do not have an immediate need for your services.
Below is an example of a commercial insurance customer profile:
Interest Level
A lead may express a high level of interest in your business in a number of ways. For example, they could show a desire to learn more by being a marketing-qualified lead (MQL) through campaign interactions such as opening an email, clicking a link, submitting a web form, or downloading something. On the other hand, it could be someone you met at a networking event who verbally expressed potential interest in your products or services.
If they become a sales-qualified lead (SQL), they have shown even more interest relative to lead qualification activities in your sales pipeline by engaging with a sales rep or sales resource. Typical activities for this include asking for a demo, requesting pricing or a proposal, signing up for a free trial, or agreeing to a sales presentation.
Purchase Capability
The final criteria to evaluate is the prospect’s purchase capability. Often, a potential customer would be a good fit and shows plenty of interest, but cannot finalize the purchase. This typically occurs either due to budgetary constraints or because they don’t have the decision-making power for a particular product or service.
2. Create a Lead Scoring Point System
After you’ve established the main factors of evaluating a lead, create a point system based on your criteria. Lead scoring will always be measured by who the lead is and how they behave. Some of the activities they already completed may be what got them through the lead generation stage of the sales process and should be considered in their score.
The chart below shows examples of how to do lead scoring, including examples of what points could be assigned for various activities. Keep in mind that negative points can also be assigned for events that make a lead less qualified.
An example based on prospect fit, interest level, and purchase capability.
We recommend keeping your scoring system from 1 to 100 as you can easily interpret the score. However, a small business’ lead ranking system may be far more simple and range from one to 10 points. Plus, remember that lead scores can change day-to-day as new information is learned and events take place.
For example, you could learn that a lead fits some components of your ideal customer profile giving them 30 points. The next day, they interact with your marketing campaign by downloading a white paper giving them three more points for a total of 33.
A week later, they ask for pricing (add 4 points) and a demo (add 4 more points), putting their score at 41. Then, they suddenly realize they’re out of budget range (subtract 5 points), moving them to 37 until new information is acquired.
While you can do lead scoring manually, it’s far better to use customer relationship management (CRM) software. Most CRMs have both built-in, automated prospect nurturing tools that will help you save time, more easily identify hot leads, and automatically deploy sales pipeline activities to move them through your funnel.
CRMs allow you to organize lead information, communicate with them, and track their progress throughout the sales pipeline. Because of the lead management features a CRM offers, it’s much easier to automate scoring leads than to manually assign points because the activity and data are already being stored in the CRM platform.
CRM products like Freshsales and Salesforce provide lead scores within contact records or in a list format. Scoring leads may also be done (manually or automatically) through your CRM’s tools or artificial intelligence (AI).
Freshsales lead scoring in profile (Source: Freshworks)
Salesforce lead scoring list through AI (Source: Salesforce)
3. Configure Lead Scoring in Your CRM or Create a Manual Process
If you don’t have a CRM, you’ll need to come up with a manual or alternative process for how you and your team will manage contact records and assign lead scores. You may be able to use spreadsheet software to manage a simple process to score your leads. While spreadsheets don’t offer nearly the same workflow automation as CRMs with lead scoring features, they can still help you calculate and keep track of scores and identify those most likely to convert.
Assuming you have a CRM with a built-in ability to score leads, the next step is to configure the system to manage scores and assign points for criteria. Generally, you can do this in the CRM settings where attributes or criteria are established, and will take advantage of automation to streamline the process whenever possible.
CRM products like HubSpot and Zoho CRM make it easy to assign points based on activity or lead profile information. They even provide default lead ranking scores for various prospect and customer activities if you’re unsure where to start.
4. Target High-scoring Leads
Once you have configured your CRM’s lead scoring features or established a process for scoring leads manually, you can start using it to identify and prioritize the most important leads. These could be deals most likely to convert, but may also represent deals that are potentially more profitable than others.
Create a filtered lead list for your sales team for all prospects in a specific lead score range, such as the top 25%. Agents should then do direct follow-ups via phone or email with these hot leads. This is another instance where a CRM can help you save time—Freshsales, for instance, lets you filter lead lists by criteria, including lead score total or range.
Freshsales lead filtering by score (Source: Freshsales)
Likewise, marketing teams can target prospects that score high by setting up CRM rules that automatically deploy lead nurturing emails and content, or send this content manually. Additionally, if a lead is scoring poorly, you might deploy alternative email marketing campaigns or promotional deals to try to pique their interest and add points to their score.
Lead scores can also be used to determine automatic or manual lead assignment or routing to sales reps. For example, if a prospect engages with campaigns and their ranking indicates they are ready to purchase, your CRM can automatically send that lead’s information to a specific sales rep and simultaneously send an automated email to the prospect with an invitation to schedule a sales presentation.
HubSpot, for instance, lets you automate lead routing based on more than just lead score, but also territory, lead source, and industry. Part of this platform’s automated lead management features also includes sending preset emails to certain contacts if they meet a scoring threshold.
HubSpot workflow email automation based on lead score (Source: HubSpot)
Pro tip: Use scheduling software like Calendly to automate sales appointment scheduling. Recipients can sign up for phone or video meetings in a schedule portal that automatically syncs appointments to all attendees’ calendars. It can also send notifications about new, canceled, or rescheduled events, and integrates with popular CRM platforms such as Salesforce, HubSpot, and Zoho CRM.
Calendly schedule portal (Source: HubSpot)
5. Analyze & Adjust Your Lead Scoring Strategy
As part of sales management, you need to analyze your results and adjust your strategies accordingly. You may find you need to alter existing customer profiles or establish new customer personas for targeted sales and marketing activities as trends emerge or insights are gleaned.
For example, if you are a software business that originally targeted large, enterprise-level businesses, but randomly saw a lot of small companies and freelancers express interest, you could create a new customer profile representing those types of leads. Additionally, your system would change, giving more points to organizations with fewer employees than there were originally.
Similar to running any sales or marketing campaign, lead scoring requires trial and error to see what works. You’ll find certain activities hold more significance than you originally thought, such as someone downloading an industry report being more of a factor in closing a deal than if they had requested a demo. Specific areas of your profiles might also hold more weight than others.
For instance, you may have targeted a certain industry and job position without much care for the size of the organization. Then, after a while, you find that multiple industries found value in your product or service with a pattern of mid-sized companies having the highest closing rates.
That new profile attribute should then be given more points as that type of lead is generated, requiring an adjustment in the lead ranking system.
Examples in Action
Now that we’ve gone through the step-by-step process, check out some examples of how to apply lead scoring based on specific criteria. The examples below show how to do lead scoring for five different types of companies. You can see how the following points are assigned to a given lead based on prospect fit, interest, and buying ability.
ABC Law Firm
- A law firm (25 points) + 1-10 employees (20 points): 45 points
- Currently have software but urgently looking to change: 25 points
- Lead contact has some purchasing power: 5 points
- Software is near their budget: 2 points
- Had good email response and they requested a demo: 13 points (5+8)
- Current Total: 90 points (Hot lead)
XZY Law Inc.
- A law firm (25 points) + 51-100 employees (10 points): 35 points
- Currently have software and no urgency to change: -10 points
- Lead contact has sole purchasing power: 10 points
- Software is near their budget: 2 points
- Opened a marketing email: 1 point
- Current Total: 38 points (Cold lead)
The Accounting Firm Inc.
- An accounting firm (20 points) + 11-50 employees (15 points): 35 points
- No current software and no urgency to change: -5 points
- Lead contact has sole purchasing power: 10 points
- Software is within their budget: 10 points
- Good interaction on cold call, good email response, and downloaded whitepaper: 15 points (4+5+6)
- Current Total: 65 points (Warm lead)
John’s Law & Accounting Corp.
- A law/accounting firm (30 points) + 1-10 employees (20 points): 50 points
- Currently have software but urgently looking to change: 25 points
- Lead contact has sole purchasing power: 10 points
- Software is near their budget: 2 points
- Requested proposal: 12 points
- Current Total: 99 points (Hot lead)
MNO Human Resources Management
- An HR consulting firm (15 points) + 51-100 employees (10 points): 25 points
- Currently have software and no urgency to change: -10 points
- Lead contact has no purchasing power: 0 points
- Software is near their budget: 2 points
- Opened a marketing email: 1 point
- Current Total: 18 points (Cold lead)
Bottom Line
Lead scoring is a valuable tool for identifying the most qualified prospects to pursue in order to move hot leads through your sales pipeline more efficiently. It is highly recommended that you use a CRM to automate lead scoring, more easily generate contact lists for hot opportunities, automatically route hot leads to agents for follow-up, and automate lead nurturing and deal closing activities based on a prospect’s likelihood to convert.
