Lead Scoring: What is It and Should You Do It?
We live in the age of information, which can be both a blessing and a curse. Businesses today have access to an unprecedented amount of data that can help them stay competitive in an evolving landscape that grows more competitive every day. Data can be leveraged to foster meaningful connections with potential customers. However, it can be challenging to know which leads to pursue. In fact, research conducted by MarketingSherpa suggests that 61% of B2B marketers send all leads directly to their sales colleagues while just 27% of those leads are qualified (1), leaving sales teams treading water and chasing leads that are unlikely to convert. One strategy that has gained significant attention is lead scoring, which offers a systematic approach to assess and prioritize leads based on specific criteria and behaviors.
What is Lead Scoring?
Lead scoring is a technique used by sales and marketing teams to determine the worthiness of leads based on specific criteria and behaviors. Through CRM implementation lead scoring works by assigning a point value to each lead based on predetermined criteria and behaviors, such as demographics, level of engagement, and interactions with marketing touch points, with weights that qualify the relative importance of the different scoring factors. Lead scoring is intended to empower sales teams to prioritize their efforts on the leads that are most likely to convert by using data in your in house CRM system.
Research suggests that only 56% of B2B organizations verify valid business leads before they are passed to the sales team, which might explain why 79% of marketing leads never convert into sales (1). Without a systematic way to classify leads based on their potential value, businesses struggle to bridge the gap between their marketing and sales teams. Lead scoring has emerged as a potential strategy to combat this issue. CRM software implementation is needed for proper lead scoring to ensure good data is being used for proper scoring.
Five Benefits of Lead Scoring
An effective lead scoring program has been shown to offer several benefits that deliver business-impacting results, including:
- Higher conversion rates
Lead scoring empowers your sales team to prioritize your business’ top sales opportunities, shorten your sales cycle, and convert prospects into customers and clients. According to research conducted by Aberdeen Strategy & Research Group, companies that focus on lead scoring have a 192% higher average lead qualification rate than those that don’t (2).
- Improved sales efficiency and productivity
Your sales team’s productivity and success rate are directly related to the quality of your leads. As little as a 10% increase in the quality of your leads has the power to yield as much as a 40% increase in your sales productivity (3).
- Better alignment between sales and marketing functions
Your sales and marketing efforts should go hand and hand, working together to support business growth. Lead scoring delivers qualified leads based on factual scores, promoting mutual trust and confidence between sales and marketing teams.
- Lower customer acquisition costs with higher ROI
If your sales pipeline is filled with customers who are not ready to buy, your customer acquisition cost goes up and your sales conversion goes down. According to Constant Contact, businesses that use lead scoring see a 77% increase in lead generation ROI (4).
- Increased revenue
Lead scoring has been shown to be highly effective in driving revenue growth. Results from one study of 10 B2B businesses that use lead scoring showed an average 30% increase in deal close rates, 18% in company revenue, and 17% in revenue per deal (5). Better insights lead to a more efficient use of resources, more profitable decision making, and more accurate revenue forecasting.
Lead scoring works with in house CRM systems or the implementation of a CRM system to offer substantial benefits for sales and marketing teams aiming to navigate the ever-evolving business landscape and contribute to business growth. At Paradigm, we believe that technology has the power to radically enhance sales and marketing strategies, improve data analysis, and support profitable decision making that allows you to scale faster. Together we can design sales, marketing, and workflow processes that align with your strategic objectives and revenue goals. Prevent your sales and marketing teams from being left to struggle to find effective ways to navigate this complex environment and make meaningful contributions to business growth, contact us today.