What Is Lead Scoring, Anyway?

I have never found a description online that succinctly explains what exactly lead scoring is, and the value it can drive in a b-to-b organization. With this in mind, I have laid out SiriusDecisions’ perspective.

Lead scoring is a methodology used to rank prospects against a scale that represents the perceived value each lead represents to the organization. The resulting score is used to determine which leads a receiving function (e.g. sales, partners, teleprospecting) will engage, in order of priority.

When a lead scoring model is effective, the key benefits are:

  • Increased sales efficiency and effectiveness. Lead scoring focuses sales attention on leads that the organization deems most valuable, ensuring that leads that are unqualified or have low perceived value are not sent to sales for engagement. Through this prioritization process, sales receives higher-quality leads, which increases conversion rates – the percentage of leads that teleprospecting and sales accept from marketing, the percentage that become sales qualified, and the percentage that become won business.
  • Increased marketing effectiveness. A lead scoring model quantifies for marketers what types of leads or lead characteristics matter most. This helps marketing more effectively target its inbound and outbound programs and deliver more high-quality leads to sales.
  • Tighter marketing and sales alignment. Lead scoring helps strengthen the relationship between marketing and sales by establishing a common definition for which lead types are ready for teleprospecting or field sales attention. It provides a common language with which marketing and sales leaders can discuss the quality and quantity of leads generated. Alignment and trust correlate directly with the accuracy of the scoring model; if too many false positives pass the scoring filter, the scoring model loses credibility and, ultimately, its positive impact on marketing and sales alignment.

About the Author

Jay Famico is Practice Director, Technology at SiriusDecisions. He is a thought leader focused on helping companies gain maximum value from their investments in marketing programs and technology. Follow Jay on Twitter @JayFamico.


4 Comments

  • Brian Teevan, 14th January 2013 at 9:36 am

    Reply

    Nice write up and very timely. We often discuss what lead scoring “is”, and I think we have landed at a definition that works for our organization: A process to surface leads to the appropriate receiving function.
    It is not a new channel of leads, but rather a tool to prioritize contacts that are engaging with your web site (inbound) or being targeted by your nurturing programs (outbound).

  • Ryan DOherty, 14th January 2013 at 11:43 am

    Reply

    I really like the definitions, this will be helpful as we are now doing lead, account, and activity scoring to paint the picture for Marketing and Sales. I really like how you put that need for a tighter alignment between the two organizations to speak the same language. Brian’s Point above is exactly how we’re thinking about the activities with those scores building to a lead score that combines with others for an account score. But how we respond as a company depends on that lead score. Automated marketing, targeted marketing, sales phone call, or sales visit.

  • Brian Gossett, 14th January 2013 at 11:43 am

    Reply

    On the money! With the big shift to online activity prior to actual engagement with sales, lead scoring is very helpful in understanding the amount of activity and possibly interest that a prospect has in your product/service. Lead scoring is powerful in helping both marketing and sales correlate the prospect’s expressed interest with a relevant response.

  • Jamie Beerbower, 23rd October 2013 at 4:31 am

    Reply

    Thanks for the nice definition, particularly the emphasis upon perceived value. What I find confusing about the various descriptions and implementations I find on the marketplace is that they suggest a scoring system without reference to the evaluation of the scoring system. e.g. I see software for lead scoring where a person defines the “weights” for the different criteria from intuition, rather than using a statistical method like linear regression. I guess for that reason I’m a bit dubious about the claims that a scoring system will improve sales.

    On the other hand I could imagine how an untested scoring system would be good at communicating the relative value of conflicting goals. I mean here that a Company might want bump younger customers up (goal: customer acquisition in younger segments) and also have the goal of high sales.


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