Lead Scoring Models: Operationalizing the Model

Once the lead scoring model has been tested and visualized, tweaked and retested, and tested again on an independent data set, it is ready to be implemented. A powerful lead scoring model can benefit an expansion stage company (or any company with a high inflow of leads) in several areas:

Calling LeadsSales costs represent a significant portion of operating expenses, and companies are continuously looking for ways to streamline their sales operations. A good lead scoring model can help.

By definition, inside sales reps spend a majority of their time calling and speaking with leads. At the same time, most of these leads will not convert to an opportunity or sale, which implies that a significant amount of sales resources are wasted on low quality leads. If, for example, 10% of your leads convert into opportunities, calling the 90% of leads that will not convert is undebatably a relatively poor use of sales resources. If, on the other hand, you have a lead scoring model that captures all opportunities in the top 30% of lead scores, you can safely discard 70% of your leads before sales touches them. If we assume that sales spends 50% of its time on those leads (theoretically, sales spends more time on the higher-quality leads), you should be able to have the same sales output with a 50% reduction in sales resources. If your company has 10 reps making $100,000 per year (fully-burdened), this translates to a savings of $500,000 per year with no reduction in sales.

Marketing Campaigns
Through extensively analyzing the relationship between lead source / campaign and conversion, you should develop a good understanding of which marketing campaigns generate high quality leads and which campaigns generate low quality leads. If, for example, you find that a certain Google AdWords campaign generates leads that do not convert, it would be wise to reduce or eliminate that spend and reallocate it to marketing campaigns that yield high-quality leads. In general, analyzing the conversion rates of different campaigns will allow you to reallocate marketing spend to generate more high-quality leads.

Lead Capture FormsThrough analyzing specific lead attributes and their correlation with conversion, you will find out which attributes are good predictors (positive or negative) of conversion. Asking leads to fill out that attribute (for example, company size) in all lead capture forms will give more power to your model, allow you to further reduce the number of leads being called, and as a result, decrease operating costs.

PositioningAgain, attribute analysis should give you a good feel for which attributes make high or low quality leads. Changing your positioning and marketing to more actively target prospects with desirable attributes should result in an increase of high-quality lead inflow, and ultimately, sales.