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Qualifying leads and turning them into paying customers is a challenge all marketers struggle with. If you’re reading this, then you’re probably desperate to seal more deals and create a profitable sales funnel. That said, you’ve got to wonder — what does the achievement of such a goal entail? It’s a good question and one that must be tackled well before the entry point to your sales funnel. This is where a process is known as Lead Q, and S (Lead Qualifications and Scoring) comes in.
In this article, we will go over how you can start qualifying and scoring your leads to get better results out of your web marketing strategy. Let’s go over the following:
Table of Contents:
- How some leads are better than others
- How valuable are your leads?
- Understanding the process of qualifying leads
- Understanding the process of scoring leads
- What makes lead qualification and scoring so important?
- The basics of qualifying leads
- Lead Qualification Frameworks
- Principles of lead scoring
How some leads are better than others
Marketers tend to find themselves dealing with a myriad of things that it’s easy to think of online marketing as a numbers game. Generate as many traffic and leads as you can, and you’ll be fine. If you’re reading this, then you’ve probably already realised that just isn’t true. Some leads are just better than others and much about profitable inbound marketing these days is about uncovering these leads.
Think about it — some leads are just closer to making a buying decision. Hence, compared to others who’ve never heard of your brand, they don’t need much convincing to buy into your product or service. On the other end of the spectrum are leads that are nowhere close to making a purchase decision. Going after such leads will require a range of marketing messages to sustain them throughout the buying cycle.
As you might imagine, the marketing strategies that businesses will need to employ to settle those leads will be different. Hence finding a way to differentiate between the two is paramount.
Furthermore, lead quality can change as they go through the buying cycle, and marketers need to be able to react to these shifts accordingly. This requires, among other things, the ability to send a personalised marketing message. Such messages are more effective for nourishing leads towards making a buying decision as they enter the different stages of a sales funnel.
How valuable are your leads?
Do you understand the value that each lead brings to your business? This is a question that doesn’t get asked nearly enough in the lead generation business. this is unfortunate as therein lies the matter of profitability. Think about it — a lead that turns into a one-time purchase of your most affordable product or service isn’t that valuable compared to those that end up purchasing your most expensive offerings. Some of your leads may turn out to be extremely valuable as repeat customers in the future.
Again, businesses would want to take a varied approach when pursuing the leads described above. That said, we also need to take into account the matter of efficiency and determine which leads deserve more of our marketing resources.
As you may have already realised, the ability to generate leads isn’t nearly as valuable as the capacity to identify and concentrate your marketing efforts on the pursuance of your most valuable leads.
In many cases, successful businesses can decide not to pursue a lead at all. After all, marketers can only take on a limited number of projects at any given time. Hence, it’s crucial to have some kind of system for gauging the value of every lead that comes in. You would want to only go after the ones that are worth your while. This is where lead qualification/scoring comes in.
Understanding the process of qualifying leads
At its’ core, qualifying leads is all about gauging and foretelling the value and quality of every lead. This is done by gathering pertinent information about them and how they relate to your product or service (Lead qualification checklist).
So how to qualify incoming leads you ask? Well, for starters, you need to come up with a model for qualifying leads (and disqualifying them). To do so, you need to be able to differentiate between the following:
Sales Qualified Leads (SQL)
Leads that have advanced unto the last stages of the sales funnel by completing specific steps that have qualified them as “sales-ready”.
Marketing Qualified Leads (MQL)
Leads that you’ve obtained through your inbound marketing channels (website, social media accounts, pay-per-click advertising and the like). These leads have been found to possess some value (qualified), but whether or not they turn into a sale remains to be seen.
As you might imagine, businesses need to deal with above-mentioned leads differently. You can’t have the same marketing model for both. When qualifying leads for your business, the goal is to single out leads with strong buyer intent. Keep in mind that not everyone who signs up for your lead magnet (eBooks, free courses, webinars, etc.) is genuinely interested in buying your product or service. No matter how much time and effort you spend on pre-qualifying leads, there’s no way to guarantee that it’ll end up with a sale.
So let’s say that you’re done with your prospect qualification checklist and have established buyer intent — what then? Well, the next step is to determine where these leads are in your sales funnel and start sending targeted marketing messages accordingly. You can’t be asking for a sale from leads who’ve only recently heard of your brand. Nurture and engage said leads until they’re sales-ready. At this point, it’s up to your sales team to swoop in and close the deal.
Now that you have a general idea on how to qualify marketing leads, it’s time to delve into the other piece of the puzzle — lead scoring!
Understanding the process of scoring leads
Remember, when we’ve mentioned that the quality of leads can shift as they go through the sales funnel and how your marketing team ought to be able to react to these changes? Well, that’s where the process called predictive lead scoring comes in. This involves, among other things, designating a value for each lead, based on several criteria.
The assigned value can change as leads go through the sales funnel. Monitoring these changes enable businesses to strategize and focus their attention on leads that are deemed most valuable.
So how do you score leads you ask? Well first, it is worth looking at some lead scoring model examples of which there are two types:
- Explicit lead scoring — pairing leads with several established customer profiles then assigning a value based on demographics and other information you’ve collected through surveys and web forms.
- Implicit lead scoring — matching leads based on their behaviour (the webpages that they’re on and the specific actions that they’ve taken).
As you might imagine, explicit lead scoring is typically the more authentic and data-driven method for scoring leads. This is because it’s run by information collected from actual users who are deeply engaged with your brand. Of course, the question on how to setup lead scoring will differ from one business to another and will require the expertise of your marketing team — demographics, surveys, market research and the like.
Implicit scoring, on the other hand, revolves around collecting data on prospects based on their online activities. You obtain this information via lead scoring tools such as cookies, tracking URL and analytics tool (Google Analytics).
What makes lead qualification and scoring so important?
Do you still think that lead scoring in CRM isn’t that big a deal? Well, consider a study by Gartner (a global research and advisory firm) stating that businesses lose 70 percent of their leads because they failed to properly follow through with them. This coincides with a study by MarketingSherpa (marketing research and training institute) stating that on average, businesses that qualify, score and nurture their leads have more than 35 percent better ROI (return on investment) compared to similar businesses that don’t nurture their leads.
While the figures mentioned above is a general statistic that may or may not apply to your business, it doesn’t change the fact that marketers need to align their strategies with the sales opportunities that come their way. You can’t expect your sales team to follow up on all of your lead to the best of their abilities. Hence, it makes sense for businesses to want to go after leads that will benefit them the most. As you may have already realised, that’s only possible if you properly qualify and score your leads.
In summary, here are the following benefits that come with qualifying and scoring your leads:
- Enable business to determine which of their leads are most valuable
- Improve the quality of leads by experimenting with different marketing messages and finding the ones that they find most engaging
- Puts your marketing and sales team on the same page by implementing a unified process for pursuing leads
- Stop wasting precious marketing resources on leads that don’t amount to anything
- Improve all sales-related metrics, including conversion rate, CPS (cost per sale) and ROI.
- The ability to send highly personalised and targeted marketing messages to leads at every stage of the buying cycle
- Experiment and tweak your marketing messages to create a more profitable sales funnel and convert more of your leads into paying customers
- Provides an accurate estimate of the value of leads based on established buyer profiles (historical information of leads that have amounted to a sale in the past).
Now that you have a good understanding of the significance behind qualifying and scoring leads, you might be eager to start implementing them for your business. So how do you do just that? First, it is necessary to understand the fundamental principles behind them.
The basics of qualifying leads
Qualifying leads can be broken down into several aspects:
- Company/personal level lead qualification
- Opportunity-level lead qualification
- Stakeholder-level lead qualification
- Lead qualification frameworks
- Lead disqualification
Company/Personal Level Lead Qualification
The most fundamental practice of qualifying leads is done at the company (Business-to-Business) or personal (Business-to-Customer) level. At this point, the primary concern is to determine whether or not a lead is worth chasing after. To do this, businesses must assess the relevance of their leads in relation to their targeted customers.
To properly qualify your leads at a company/personal level, one must ask the following questions:
- Does the lead reside in an area that your business caters to?
- Are the leads from an industry that’s relevant to your business?
- Are your products or services applicable to their needs?
- How big (or small) is the business (business-to-business)?
- Are the leads similar to any of your established buyer profiles?
If the answer is “no” to any of the questions mentioned above, then that would suggest that the lead isn’t worth pursuing. It would be best to shift your attention to leads with the highest probability of turning into a sale.
Opportunity-level lead qualification
Qualifying leads at the opportunity level revolves around evaluating the quality of prospects. To do that, one must strive to find answers to the following questions:
- What issues are your prospects struggling with and can you solve it?
- How much profit can your business generate by creating solutions to said problems?
- What budget does the lead have?
- How much money can you afford to spend pursuing leads and turning them into paying customers?
- Is the lead valuable (short-term and long-term)?
As you might imagine, finding an answer to the questions mentioned above enables your business to lend priority to leads that offer the most benefit to the organisation. Opportunity-level lead qualification can also help marketers segment and nurture their leads with targeted marketing messages.
Stake-holder level lead qualification
Qualifying leads at the stake-holder level applies solely to B2B (Business to Business) marketers and primarily concerned with ensuring that that the leads they’re pursuing has the power to make purchase decisions. After all, there is no point in spending marketing resources on leads that lacks buying influence in their respective organisation.
For marketers engaged in the B2B industry, leads who have the final say on what products or services to buy are precious. This includes leads who are CEOs or people holding executive positions in their organization.
Here are a few questions worth considering:
- Is the lead in a position to make purchase decisions?
- Can the lead influence what products or services to buy for their organisation?
- Under what department does the lead belong to?
- Is there a budget allocated for the department? Do they have the prerogative to make purchases on behalf of the organisation?
- Who else in their organisation has the power to influence purchases?
Your salespeople should give leads that fulfil all the criteria across all three levels (if applicable) top priority. That said, leads that don’t qualify at one or two levels may still prove valuable, especially if the disqualification is due to lack of information. Businesses need only automate their marketing process for following up and nourishing leads.
While there is no harm in holding on to leads that don’t pass all levels of qualification, you would want to be careful not to lose sight of valuable leads. For many businesses, the key to remaining profitable is to direct most of their marketing resources towards pursuing leads that will yield the most benefit to their organisation.
Lead Qualification Frameworks
Developed by IBM in the 1950s, BANT is an old but proven framework for qualifying leads that applies to most businesses across a wide range of industries. It is well suited to addressing all aspects of qualifying leads at the opportunity and stakeholder level.
BANT is primarily concerned with getting answers to the following questions:
- Does the lead have the budget to buy your product or service?
- Does the lead have the authority to decide purchases?
- Is there a genuine need for your product or service?
- What’s the timeline on when the lead is looking to make the purchase?
Even though BANT is well suited for qualifying leads at the opportunity level, it is not without its’ limitations. Consider a study by CEB (Corporate Executive Board); it takes an average of 5 people to make a purchase decision in an organization. This means that in a typical B2B setting, buying authority resides among numerous individuals. Hence BANT might not be the best choice for engaging stakeholders and encouraging them to buy into your product or service.
Another area where the BANT framework tends to fall short is “timeline”. The structure may tell you to dump leads who aren’t ready to buy. That said, this option might be premature, and it might be worth your while to continue nurturing said leads until they’re prepared to make a purchase.
MEDICC (Metrics, Economy, Decision Criteria & Process, Identify Pain, Champion) Lead Qualification Framework
Dick Dunkel and Jack Napoli developed the MEDICC framework during their tenure at PTC (a technology and computer software company) in the early 1990s. Since then, the structure has proven invaluable for companies looking to boost the accuracy of their lead qualification process.
MEDICC differs from BANT in that it focuses on obtaining a good understanding of a lead’s buying decision process at every stage of the sales funnel. One notable factor is whether or not you have a “champion” — someone who can promote your product or service within the lead organization.
As you might imagine, the MEDICC framework can take a significant amount of time and marketing resources to implement. Hence, it is typically used by businesses that sell to large enterprises with massive average sales prices. In this market setting, losing one lead can cost a company thousands (if not millions) of dollars.
To maintain a profitable sales funnel, a good understanding of how and why a lead buys and creating champions from within your prospect’s organization is crucial. This makes the cost and complexity of implementing the MEDICC qualification framework worthwhile.
ANUM ( Authority, Need, Urgency, Money) Lead Qualification Framework
ANUM is similar to BANT with the exception that authority is of the utmost priority. This means that the immediate concern for your sales team is to pursue leads who are decision-makers in their organization.
Timeline and Budget are replaced with Urgency and Money to reinforce the framework’s particular focus on uncovering two things — how urgent is the lead’s need for your product or service and do they currently have the money to make the purchase. Once these factors have been verified, then it is up to the sales team to establish the value of their offers and provide a compelling offer on why they should sign off on the purchase.
FAINT (Funds, Authority, Interest, Need, Timeline)
The FAINT framework is another spin on the BANT framework and capitalizes on the fact that the majority of buying decisions that the average person makes is unplanned. Hence, in most cases, most leads won’t have a fixed budget in mind.
Similar to ANUM, the FAINT framework seeks out leads with the capability to buy said product or service. The latter also delves more into the lead’s interests by asking qualifying questions about the topics they enjoy and make compelling offers to solve their pains and improve their quality of life.
CHAMP (Challenges, Authority, Money, Priority) Lead Qualification Framework
The CHAMP framework is unique in that it emphasizes challenges (replacing need) as the top priority. Businesses that use this framework are banking on the fact that people buy things because they need help overcoming a particular issue. This makes “challenge” a critical part of the lead qualification process.
Unlike ANUM and BANT, businesses that use the CHAMP framework don’t drop leads because they aren’t decision-makers in their organization. Instead, they enlist their aid in understanding their organization’s structure and identify the people whom they should be speaking to.
Principles of Lead Scoring
An understanding of the fundamentals behind lead scoring will enable businesses to better appreciate how it works in conjunction with your lead qualification process. In this regard, we’ll take a closer look at the following aspects for scoring leads:
Implicit lead scoring
Again, implicit lead scoring revolves around collecting information from prospects without actively asking them for it. To do this, marketers use a variety of tools to keep track of their lead’s digital footprint, which include the following:
- Google analytics
- IP addresses
- URL Tracking
To score leads implicitly, marketers must identify which data to collect and its’ relevance to scoring buying intent. For instance, prospects who’ve downloaded your eBook likely has a stronger interest in the subject compared to someone who has only visited your product page once or twice.
Other actions that you can track which is indicative of buying intent are Google searches that contain your brand. This would suggest that the prospect has heard of your brand and looking to find out more about your business.
Of course, you can’t score a lead based on a few actions alone. To profile a lead accurately, marketers will need to track user interaction on their website and create a persona from which to score leads.
Explicit lead scoring
With explicit lead scoring, marketers get the information they need directly from prospects. Web forms are typically used to collect this information and widely regarded as more reliable compared to implicit lead scoring. This is because explicit lead scoring does not rely on a user’s digital footprint, which can be problematic and challenging to obtain as people use multiple Internet devices.
Of course, the effectiveness and accuracy of explicit lead scoring are wholly dependent on prospects providing correct information. If done right, the latter can help marketers uncover valuable information (email addresses, profession, salary and the like) that are impossible to obtain by any other means.
Demographic lead scoring
As the name implies, demographic lead scoring revolves around gauging the value of leads according to various characteristics. This includes ethnicity, location, age, gender and anything else that you deem relevant for scoring leads. In doing so, marketers can create buyer profiles from which to score all incoming leads.
To effectively target prospects with relevant marketing messages, demographic lead scoring requires the creation of various buyer profiles. These profiles represent the different value that leads bring into the organization. Marketers can then designate scores to these profiles and prioritize the ones who are most relevant and profitable to their organization.
Organizational lead scoring
If you’re a B2B business, then you would want to focus on pursuing leads that represent organizations in place of individuals (except for those that occupy executive positions in targeted organizations).
For instance, marketers of most software companies cater to a wide range of customers that it’d be impossible to pursue them all effectively. Hence, many of them rely on organizational lead scoring for identifying organizations that are of a particular size and belong to a specific industry, location and more.
Behavioural lead scoring
Behavioural lead scoring is perhaps the most sophisticated approach for marketers in scoring leads. After all, evaluating the behaviour of leads over the Internet and using the information to judge value is no small feat. For one thing, the entire strategy relies solely on your marketer’s ability to dependably and adequately monitor the actions of prospects as they engage your brand across a wide range of marketing channels.
Of course, behavioural lead scoring also requires a good understanding of what specific responses mean concerning a prospect’s value. For example, a prospect who has viewed your product page numerous times using multiple devices is more likely to buy from you compared to someone who has only visited your website/blog once or twice.
Similarly, prospects whom you’ve determined were looking at webpages of similar products are likely making a comparison. This presents an excellent opportunity for your sales team to offer help in making a decision on which products (or services) to buy.
The circumstances mentioned above are but a few of the insights that you can obtain by tracking your prospect’s behaviour. There are a lot more out there, and it’s up to your marketing team to make sense of them after reviewing the totality of a lead’s behaviour.
Account/Product lead scoring
Another approach to scoring leads is for marketers to focus their attention on their most profitable products or services. This is assuming that they’ve qualified their leads as having a keen interest in their offers. As a result, prospects who are drawn to a profitable and expensive product are assigned a higher lead score.
Of course, scoring leads based on the value of one’s product or service shouldn’t be the only factor for deciding which prospects to pursue. There are other factors to consider which businesses must be careful not to overlook. For instance, a lead that ends up making repeat purchases is generally more valuable to any one-time purchase.
So how can you predict if one lead has the potential to turn into a valuable repeat customer? Well, this is where the principle of account scoring comes in. Simply put, account scoring revolves around designating a value to current customers according to their buying history. For instance, you may have a customer who’ve bought much stuff from your business over the years. In this case, the value of such a lead would be relatively high compared to new ones.
So there you have it — an overview of how to qualify and score leads and what the process entails. As you may have already realized, efficient lead qualification and scoring methodologies are an integral part of online marketing. Without it, businesses would not be able to tell the difference between leads that offer the most benefit to your brand and those who aren’t worth your while.
The more precise your evaluation of your prospect’s value and buying intent, the more efficient and profitable your marketing strategies are going to be. Hence, it’s easy to see how a business can end up with more profit as they and generate and nurture more leads throughout their sales funnel