Question 7: When is a lead truly "Sales-ready"?
The most basic definition is this: Leads are "Sales-ready" when a salesperson actively follows up on those leads and closes at least 30% of them with a good, solid profit margin.
If Marketing and Sales have the identical definition of a "sales-ready lead" (some call it a Sales-qualified lead) you have a good start at getting Sales to follow up on leads. But when Marketing and Sales have different definitions of what's Sales-ready, trouble rears its ugly head.
Sales won't follow up on leads they don't trust, simply because their time is valuable. Since most salespeople are paid on commission, dead ends cost them money.
Imagine what it would be like if you were paid according to the conversion rates of your landing pages. Wouldn't you get upset if the people responsible for sending leads to those landing pages were consistently delivering low-quality leads that didn't convert?
Getting Sales to Actually Define 'Sales-Ready'
Unfortunately, what is Sales-ready to one salesperson is not Sales-ready to another. Successful salespeople may have a far higher standard for Sales-ready than the struggling salesperson who is willing to talk to anyone. The key is to hit the agreed-upon minimum standard; then, if practical, tune your lead-scoring algorithm to the circumstances of the individual salesperson.
You may be hard-pressed to get an actual "definition" from many salespeople because it's often more of a "gut" feel if they're accustomed to working with raw, poor quality leads. That's where marketing automation systems, especially when tied to a quality CRM system, can help.
Over time, you learn which leads eventually become customers—and why they become customers. Tracking the behavior that leads to a sale can help you to quantify "Sales-ready" and develop lead-scoring rules that enable sales to focus on the highest-quality leads available.
BANT (Budget, Authority, Need and Timeframe)
Essentially, meeting the BANT criteria means you've pinpointed a qualified prospect who is actively evaluating solutions for a business problem that you can solve, and within a time frame that makes sense.
You have clear reasons to believe that the prospect wants to buy, can afford to buy, and has the authority to buy.
Getting BANT wrong is probably the top reason Marketing and Sales do not meet the CEO's revenue objectives.
Tool You Can Use
The "Simple" Sales-Ready Formula (PDF). How do you know whether a lead is Sales-ready? Play with that simple equation and test your leads against it. The higher the result, the more Sales-ready the lead.
Question 9: What are some lead scoring best-practices?
I've heard it said "a 10% improvement in lead quality can result in a 40% improvement in sales productivity."
In my experience as a salesperson, I think that number may actually be a bit low. When you're a salesperson with limited time, the last thing you want to do is waste it on a lousy lead.
Imagine that your job was to produce an elaborate dinner party for your board of directors, and that your future hinged on your performance. Now, imagine that you're given a complete meal by your kitchen staff, and all you had to do was pour the wine. That's what it's like to get a "Sales-ready" lead.
Lead scoring is simply a way to rank a lead's level of interest and Sales-readiness. As you might imagine, doing so without the input of Sales could well be like preparing an elaborate turkey dinner with butter-soaked mashed potatoes to a group of vegans.
Lead scoring is a jointly defined process between Sales and Marketing that helps to identify which leads are ready to move to Sales and which leads require further nurturing.
Now that you know what lead scoring is, here are some best-practices.
Lead Scoring Best-Practices
1. Establish a clear and consistent scoring system
Start easy with a 100 point scale and three categories: 0-40 = "Suspect"; 41-60 = "Lead"; 61+ = "Sales-Ready Lead." Then, as you learn more, you can create finer granularity and even break it down to correspond to the different stages of the buying cycle.
A clear, consistent scoring system that correlates to the buying cycle helps Sales by providing a quick view of which leads are ready. It helps Marketing by providing an easy way to target the right information to the right people based on where they are in the buying process.
2. Use both demographic and behavioral scoring
Use demographic and BANT scoring, such as job title, industry, time-to-purchase, or annual revenue. Give higher scores to the people who match key sale indicators.
Use behavioral scoring such as Web pages visited, emails opened, response to offers, and downloads. Rate different behaviors according to your key buying process indicators. Visiting a product pricing page, for example, should rate more points than visiting the "careers" page.
3. Hold weekly review meetings with Sales
As you get started with lead scoring, this step is critical. Your weekly meetings can help you move from "best guesses" about how you score behavior and demographics to a more realistic view:
- Review scores of won and lost opportunities. Make adjustments to your scoring as needed.
- Look at leads that had high scores but didn't turn into opportunities. What did you miss? Do you need to reduce the score for certain behaviors (such as downloading everything on your website—a big red flag)?
- Measure actual sales against scoring for demographic segments and different online behaviors to see whether the actions your best leads take are being reflected properly in the score.
4. Add AND subtract from the lead score as necessary
- Add 5 points for clicking on a landing page.
- Add 15 points for attending a detailed webinar.
- Add 10 points if their time on the website exceeds three minutes.
You might also...
- Subtract 5 points for visiting a landing page but not clicking.
- Subtract 10 points if they haven't opened the past three email messages.
- Subtract 5 points if they download a whitepaper but don't open any of the follow-up messages to that whitepaper.
Tool You Can Use
Check out this very handy Lead Scoring Checklist from Marketo (PDF).