Lead Scoring Simplified: Identify Future Clients Effectively

When running your business, a key task is reeling in potential customers. But once you’ve gathered a substantial number, how do you identify the high-quality leads—the ones ready to say “yes” to your offerings?

That’s where lead scoring comes in. It helps rank leads based on their likelihood to convert, allowing your marketing and sales teams to focus on those showing genuine interest in your brand. While it sounds simple, implementing lead scoring can pose some challenges.

That’s why, in today’s article we’ll guide you through the basics of lead scoring, help you create a lead scoring system, and share insights to effectively identify and nurture high-quality leads.

What Is Lead Scoring?

Lead scoring, also known as lead ranking, is a strategy used by sales and marketing teams to evaluate and prioritize leads based on their likelihood of becoming future customers. This process involves assigning point values to each lead, with the numerical value varying according to the company’s unique criteria and objectives. Some companies may choose a range from 1 to 5, 1 to 10, or even up to 100.

Lead Scoring vs. Lead Grading

Alongside lead scoring, there’s lead grading, which is often used together to enhance lead management. While both processes aim to prioritize leads, they approach it from different angles.

Here’s how they work together:

• Lead grading: Initially, leads are graded based on their customer data, including demographic attributes like age and location, and firmographic details such as company size and industry. This grading assesses alignment with the company’s ideal customer profile (ICP), with an “A” indicating a strong match and a “D” suggesting a weaker fit.
• Lead scoring: After grading the leads, the next step is to score them based on their behavioral data, such as downloading freebies from your website, or attending webinars. This scoring reflects their level of engagement and readiness to convert.

By combining these approaches, you can efficiently prioritize leads that are both a good fit and highly engaged with your brand, thereby optimizing your sales and marketing efforts.
Why Is Lead Scoring Important for Your Business?

Why Is Lead Scoring Important for Your Business?

Only 25% of the leads you generate have the potential to make a purchase. Of these, approximately 79% still won’t result in sales, leaving you with just five customers out of every 100 leads generated, which can sound… discouraging, to say the least. But that’s why the lead scoring process matters. 

On one hand, it fosters sales and marketing alignment by creating a shared framework for evaluating lead quality and readiness. This allows you to spend more time on qualified leads and less on dead-end ones, ultimately increasing your conversion rate—one of the most important digital marketing metrics. 

On the other hand, customers enjoy a better experience, as lead scoring makes it easier to nurture them with relevant content and guide them more smoothly through the sales funnel, thereby minimizing your cost per lead.

How Does a Lead Scoring Model Work?

Now that you’ve got the basics down, let’s see how an example lead scoring model works.

Imagine you run an ecommerce business specializing in eco-friendly home goods. To prioritize leads effectively, you decide to implement the following scoring system:

A prospect meeting all these criteria would quickly accumulate 80 points and become a qualified lead, ready to transition from marketing to sales. In a small business without distinct teams, this means the owner or a key team member can contact these high-potential leads with personalized offers and more targeted marketing campaigns.

However, a high lead score can fall, as the process also involves deducting points for unfavorable traits and behaviors, such as the example below:

Ultimately, the balance of added (80) and deducted (35) points results in a final score (45) that reflects the lead’s potential in becoming a customer. In this scoring system, a score above 70 might classify a lead as “hot,” indicating a high likelihood of conversion and warranting immediate attention. A score between 40 and 70 could be considered “medium,” suggesting moderate interest and potential for nurturing through targeted marketing efforts. Meanwhile, a score below 40 would categorize a lead as “cold,” indicating lower priority and the need for further engagement strategies to increase interest.

How to Implement Lead Scoring 

There are three ways you can implement a lead scoring system in your marketing and sales processes. However, you should view these as steps you can progress through depending on your number of leads, rather than overcomplicating things from the start. Let’s take a look, shall we?

1. Manual Lead Scoring 

Unless you’re working with a very small number of leads, manual lead scoring isn’t practical. However, for someone new to managing a lead database, it can serve as a valuable foundation for automating the process in the future.

2. Automated Lead Scoring

If you’re using some kind of marketing automation tool or CRM platform like Salesforce or HubSpot, for example, you’ve probably noticed a lead scoring feature available.

The main difference between automated and manual lead scoring is that, with automation, the software continuously applies the designated points to each attribute for every lead in real-time, which can come handy when you are dealing with a big amount of leads. This streamlines the process and ensures that scoring is always up-to-date by gathering data from various sources, such as website interactions, email engagement, social media activity, and other CRM data.

Additionally, some software platforms allow you to set a target score as a goal and trigger specific automated actions once a lead reaches that score.

3. Predictive Lead Scoring 

Predictive lead scoring leverages machine learning to analyze large datasets, identifying characteristics that differentiate low-quality leads from high-potential ones by examining patterns in both successful and unsuccessful conversions. However, there’s a caveat—you need substantial lead data for it to be effective, which makes it less suitable for newer businesses.

To build such a model, you can use built-in predictive lead scoring in tools like Salesforce Einstein and Hubspot Enterprise, or opt for no-code AI platforms—BigML and Google AutoML Tables being some of the most popular.

Be aware that because predictive models rely heavily on historical data and established trends, they excel at recognizing patterns that have been successful in the past. But this reliance can limit their ability to identify new or emerging opportunities that deviate from these patterns, potentially causing your business to miss out on innovative strategies or untapped markets. 

Therefore, it’s important to balance predictive insights with current market analysis.

Lead Scoring Best Practices

Lead scoring is not an easy process, but it’s definitely worthwhile. By following the tips below, you can effectively get your marketing efforts off the ground and start seeing more leads convert.

1. Establish Minimum Customer Criteria

To ensure your lead scoring model effectively targets the right audience, it’s essential to define the minimum criteria a lead must meet to be considered a valuable customer. Remember the lead grading we mentioned earlier? This is where it comes into play.

For instance, if you run on a B2B model, your ideal customer might need to operate within a specific industry, such as healthcare or technology, or have a minimum annual revenue threshold.

By setting these criteria, you ensure that your sales team doesn’t waste time on leads with no potential to become customers. While it might seem minor or overly specific, establishing these criteria now will save time and resources in the long run.

2. Gather Input from Real People

It’s very important that before you embark on any sort of lead scoring journey, that you have buy-in from everyone who’s involved in the purchasing process. 

Collaborate with your sales reps to gain insights on leads that were initially scored as high-quality but ultimately proved to be poor fits. Analyzing these cases can help identify any overvalued or undervalued variables in your lead scoring model.

Additionally, while your sales team might believe certain content effectively converts customers, it’s important to gather perspectives from those who experienced the sales process firsthand. Conduct customer interviews to understand what truly influenced their decision to buy from you. Hearing from both sides will provide a more comprehensive view.

3. Clear Out Inactive Leads

Effective lead scoring involves not only identifying hot leads but also managing cold ones. In this context, lead decay plays an important role by recognizing that leads can become less likely to convert into customers due to a lack of meaningful interaction or progress in the buying process.

Businesses typically establish timeframes within their CRM platforms to differentiate between hot and cold leads. Lead decay automatically reduces scores when engagement diminishes over time. Without this mechanism, databases can become cluttered with “zombie leads” that seem valuable but have long since cooled, leading to inefficient use of sales resources. Keep in mind also that the lead decay period may vary between B2B and B2C contexts, as B2B sales cycles are often longer. 

Test, Measure, and Refine Regularly

As market conditions, customer behaviors, and business objectives evolve, your lead scoring system must adapt to remain a reliable tool for identifying and prioritizing high-potential leads. That’s why coming up with scoring criteria isn‘t a one-time task but rather an ongoing process of regular testing, measurement, and refinement.

Common Lead Scoring Challenges

Identifying When Lead Scoring Is Essential

The necessity of lead scoring largely depends on your business operations and the volume of leads you handle each month. Here are some cases in which lead scoring might be a fit for your business:

• If your sales cycle is relatively short and closing leads is straightforward.
• If your lead database is limited, focusing on generating more leads may be more beneficial.
• If your sales reps are effectively managing leads and achieving strong conversion rates, lead scoring might not be necessary. 

Determining the Right Data Points for Lead Scoring

While there is no one-size-fits-all answer to how many data points should be included in a lead scoring model, a typical range is between 10 to 20. This range allows for a balanced approach, providing enough detail to make informed decisions without overcomplicating the model.

Considering Multiple Lead Scoring Models

If your business currently targets one ideal customer profile, a single lead scoring model is sufficient. However, if you plan to diversify by introducing new product lines, exploring new markets, or targeting different customer personas, it may be beneficial to develop multiple lead scoring systems. This approach allows you to adapt and qualify various groups of leads according to their unique characteristics and needs.

Following Through on Lead Scoring

By now, you’ve probably caught on that the lead scoring process isn’t just about tallying up points like a game; it’s a savvy strategy that sales and marketing departments use to spotlight the most promising leads while ironing out any wrinkles in their lead generation and lead nurturing methods.

While lead grading and lead scoring are two different players, they make a winning team when used together. But remember, setting scoring criteria isn’t a “set it and forget it” kind of deal; it’s an ongoing adventure. Keep the lines open with your sales team and regularly review your scoring model to ensure your lead scoring efforts stay sharp and effective.