Not all leads are worthy of the same attention. To operate efficiently, sales teams need to focus their efforts on the leads that are most likely to close.
Lead scoring is the process of assigning values to leads based on a predetermined set of criteria. By having an objective framework to rank incoming leads, sales reps can prioritize the prospects that are ready to buy, and identify the leads that need further nurturing from the marketing department.
Assigning points, percentages, letter grades, or descriptive words like “hot” and “cold” are all common ways to express a lead score. So how are those scores and rankings determined?
Lead scoring criteria: explicit scoring vs. implicit scoring
Sales lead scoring can take many factors into account, including demographic and firmographic fit, online buying signals, and position in the buying cycle. These factors can be divided into explicit criteria and implicit criteria, and combining them paints a picture of the prospect’s true value.
Explicit scoring is based on measurable, reportable information—i.e., details the prospect provides to you directly or that you can confirm through your own research. This type of information is critical to understanding whether or not a prospect is a good fit for your product or service. Explicit scoring criteria can include…
- Industry type
- Company size
- Annual revenue
- Job title/role of primary contact
- BANT: budget, authority, need, and timeline
The closer the prospect is to your ideal customer persona, the higher the lead’s score would be.
Implicit scoring is based on information that you infer about the prospect—usually from their online behavior. Implicit scoring criteria can include…
- Website visits
- Ebook downloads
- Newsletter subscriptions
- Email clicks
- Social media follows
Of course, certain online interest signals should be given more weight than others. Visiting a product or pricing page implies more sales-readiness than a visit to a blog post or company “about” page, for example. Higher lead scores should be awarded to behavior that corresponds with further progress through the buying cycle.
What is lead confidence?
When we founded Nutshell, we knew that lead scoring was too complicated, and required sales teams to build their own scoring systems from scratch. We radically simplified it with lead confidence.
Within our CRM, lead confidence is expressed as a percentage from 0% to 100%, reflecting how likely the lead is to close.
Establishing and automating lead confidence:
When you first add a lead to Nutshell, you have the ability to indicate the confidence, based on your impression of the lead’s sales-readiness. But we all know: this is the moment of least insight about the lead.
As the lead advances to a sale, Nutshell Pro automatically increases the lead confidence based on the lead’s stage and which sales activities have been completed.
How to use lead confidence to improve forecasting accuracy:
Accurate sales forecasts depend on knowing not just the volume and dollar value of the leads in your pipeline, but the likelihood that each lead will close.
Nutshell’s forecast report reflects the total dollar value of leads in your pipeline, but by checking the box “Forecast pipeline by confidence,” the report will adopt a model based on each lead’s confidence level. For example, a $10,000 lead with 20% confidence will only add $2,000 to your pipeline.
Improving the accuracy of lead confidence:
Are your lead confidence scores correlating with your actual win rates? Periodically fine-tuning your lead confidence percentages based on historical results at each stage of your sales process will help make your forecasts as accurate as possible.
Nutshell Pro’s advanced funnel report shows you your losses at each stage of the funnel. With this real-world data, you can refine your process to set more accurate confidence.
The impact of lead confidence
Implementing lead confidence in your sales process leads to a number of positive outcomes, including…
Increased closing rates and sales rep productivity: By prioritizing sales-ready leads and sifting out the ones that need further nurturing, the percentage of your qualified leads that ultimately turn into sales will be higher, and those sales will close faster.
Prioritizing leads also reduces the amount of time your sales team spends chasing unqualified, low-percentage leads, which means that sales on a per-rep basis (as well as team morale) will be considerably higher.
“Lead confidence definitely helps us increase productivity and the likeliness of a ‘win’,” says Michael Nowakowski, Senior Project Manager at AHT Automotive Equipment, “We use it to touch the most active and likely-to-purchase customers, and using it in combination with Nutshell’s map view helps us work smart and effectively.”
Greater control over lead pipeline and sales targets: If you know how likely a lead is to close at each stage of your sales process, you can work backwards from your revenue targets to see if you have enough lead value to hit your numbers.
“I’m one of the sales guys but I’m also a business owner, so I’m always thinking about our pipeline,” says Tannus Quatre, President of Vantage Clinical Solutions. “For example, if we need $20,000 in sales for a given period of time, our lead confidence will tell us how much we need in the pipeline in order for us to hit our target, because we know how much revenue we expect to do based on our actual sales performance. As a result, we can make sure we have enough leads in the pipeline, and ratchet up our lead generation efforts if we don’t.”