Today, we’re covering the basics of lead scoring. We will look at the different forms of lead scoring and a common methodology used to score leads.
We will look at explicit lead scoring, demographic lead scoring, firmographic lead scoring, and the BANT method of lead scoring.
All of these types of lead scoring are great ways to improve the efficiency of your sales process and get more sales in less time – making you more money and growing your business.
The comprehensive Guide to Lead Scoring gives you the info, tools, and strategies that you need to put together a winning lead scoring process.You can download the entire guide in an easy to read PDF format here today – get started being more efficient and more profitable with our lead scoring methods right now.
The Two Factors: Implicit and Explicit Scoring
When you’re setting up your own lead scoring system, you need to pay attention to two different kinds of feedback: implicit and explicit. Implicit scoring covers all of the intangibles, the things that aren’t concrete, such as what pages of your website are being viewed, or how likely the prospect is to meet with a sales rep. Explicit scoring covers tangible information – things that the client tells you or factors you can identify. In order to create a successful lead scoring system, you need to be able to correctly calculate both scores, which is harder than it looks.
Explicit Lead Scoring
You gather explicit lead scoring data by keeping track of information that’s been shared with you by the client, and any hard, observable data – usually collected by an online form. Demographics fall firmly under the “explicit lead scoring” category – age range, gender, location – those are all hard, immutable facts. This information let’s you know whether the prospect is at least comparable to your ideal prospect – right off the bat, you know what you’re dealing with.
Secondly, you can use their BANT (budget, authority, need, timeline) to determine how likely they are to buy right now. Before we get into BANT, let’s break down different types of explicit leads.
Demographic Lead Scoring
Demographics are almost self-explanatory. Age range, gender, location – all of these fall under demographics. This gives you a very general overview of who you’re working with.
Knowing the demographics of your customers and potential buyers is a powerful way to sort through leads. You can collect this info through surveys, analytics, and experience.
Firmographic Lead Scoring
Firmographic lead scoring is slightly different, though there’s a lot of overlap between it and demographic lead scoring.
Firmographic scoring is based on things related to the prospect’s business – what industry are they in? What’s their job title? Company size? How much revenue does the company take in? What does their expense budget look like?
Using Firmographic & Demographic Scoring Correctly
These two types of lead scores aren’t designed to tell you how interested the prospect is, rather, they’re designed as qualifiers to tell you how interested you should be in the prospect. For example, your service would take their entire expense budget for the year, odds are you shouldn’t get that attached to the prospect – it’s unlikely they’ll be able to afford your services.
BANT stands for Budget, Authority, Need, and Timeline. Together, these four elements can be used to determine whether someone is ready to buy or not. Let’s break it down into the individual components.
While having a lot of prospects is nice, those prospect are only of value if they can afford the service you offer. One prospect who can afford your service is more valuable than ten thousand who can’t.
Is your contact the decision-maker for their department? Can they get the funds to purchase your product or service? Remember, the person who makes the decision needs to have access to the money in order for their decision to matter.
How much does your prospect need your solution? If you were a plumber, and someone’s house was flooding, they desperately need you – which means you have a guaranteed sale.
How long is it going to take to make a sale? This ties back into why they need your service. Using the plumbing example, they would need your service immediately. Try to figure out whether they’re planning to use your service or product immediately, or if you’re on next year’s budget.
The True Value of BANT
Ultimately, BANT along with demographic and firmographic lead scoring will help you determine when a prospect is ready to buy, but it’s not enough by itself. The major limitation is that it relies almost exclusively on information the prospect gives you. If they don’t give you the information, you won’t be able to score your leads.
That’s where implicit lead scoring comes in.
Implicit Lead Scoring
Implicit scoring relies on your ability to pay attention to your prospect’s behavior. The better you are at monitoring them, and the more accurately you’re able to determine what their movements mean, the stronger your implicit scoring will be.
Imagine that you own a candy shop and you see a child walk in. They stand in front of the bubblegum for five minutes, focused on one package in particular. They pick it up, look it over, put it down, then pick it up again. The child hasn’t said anything to you, but you know exactly what they’re interested in and how interested they are. That’s what implicit lead scoring is: tracking behaviors to find results.
Your goal is to identify whether or not a prospect is ready to buy. You’re going to see if they’re checking your website, responding to your emails, or clicking on coupons. When they’re on your website, are they going to the product page, or are they clicking away after a cursory glance at your home page?
It’s not enough to simply identify positive behavior – instead, you need to identify how important these behaviors are. If someone visits your product page they’re showing interest; but if someone visits your product page and puts the product on their wish list, they’re showing even more interest. When it comes to behavioral scoring, you’re looking for buying behavior – a person making the type of moves they’d make if they were ready to buy your product.
Active and Passive Buying Behavior
When it comes to identifying buying behavior, you need to look at how engaged your prospect is.
Once again, we return to the car lot. An active buyer will enter, flag down a salesman, and have a list of cars he wants to see. A passive buyer will walk onto the lot and look around in no particular direction. One is engaged, the other isn’t.
Your lead scoring model needs to account for different types of buying behavior, with active behavior rated much higher than passive behavior. The behavior lets you know whether you should be ready to make a hard sell, or if you should play the waiting game and feel the prospect out.
A Note on Data Quality
Every salesman knows that not all leads are created equal. You need to have enough data to know which leads to pursue and which are false positives.
Just as you’ll use various explicit and implicit data to add points to your prospect’s score, you’ll use other data to take points away. This includes the email address, the first and last name of the client, and whether or not the IP address comes from a corporate domain or an ISP.
This may seem like too much, but imagine you’re offering a high end service. Should you pursue an email from “Xyyyy Zjgk” with the address email@example.com with the same vigor you would pursue “James Winchester” with the address firstname.lastname@example.org?
Now that you’ve learned what lead scoring is and the basic methods of lead scoring, Part III will look at some ways to get started implementing a lead scoring process in your business. We will show you how to collect demographic and firmographic data and implement it into an easy-to-follow process that your sales team can use to become more efficient.