What is Lead Scoring? A Complete Guide + Examples

Though businesses generally want to sell to as many customers as possible, chasing after every single consumer will not only exhaust your sales reps but also waste precious time and money on potential customers who aren’t capable of purchasing in the first place.

A shorthand that companies use to prioritize their customers is called lead scoring, where potential customers (leads) are given numerical scores to represent their salience and chances of becoming full-fledged customers. If you’re hoping to use lead scoring to improve your sales department’s efficiency and close sales faster, this guide will tell you everything you need to know about lead scoring and how to implement it in your own business to boost your sales success. 

What Is Lead Scoring?

To start off, a lead is any potential customer for your business. When your business becomes aware of a lead, you have two options: dismissing them because they’re unlikely to become a customer or reaching out to them and making a sales pitch. But how do you know which leads have the most promise and are the best to pursue? To answer that question, companies use lead scoring. 

Lead scoring assigns numerical values —usually on a scale of 0 to 100— to each potential customer depending on their interest in your company and product and how likely they are to become full-fledged customers. Essentially, it’s a way of grading your leads. Those who get a passing score get more personal attention from sales reps because their eventual sale will make it a worthwhile return on the investment. On the other hand, dropping a lead with a poor score prevents sales reps from wasting time and money on leads that go nowhere.

Leads are scored based on the information they provide to the company (through email lists and contact forms) and their actions, such as visiting the pricing page on your website or clicking on an email.

Why Is Lead Scoring Important?

Though you might balk at reducing whole consumers down to numerical values, lead scoring can provide a full score of benefits to your sales department. Below, let’s take a look at four discrete benefits to lead scoring.

1. Process Leads Faster

The most obvious benefit is that with a lead scoring process in place, your sales reps can cut through the noise and identify qualified leads faster, leading to faster sales velocities and a higher conversion rate.

By comparing the scores between leads, a sales rep can easily categorize whether potential customers are leads, prospects, or opportunities and allocate their attention to the most promising potential customers first. By focusing on the most salient leads, your sales reps can make a few surefire sales first before exerting their energy on more tenuous leads. Those shoo-in sales will guarantee your business some income for your reps’ efforts, unlike low-scoring leads.

Beyond simply prioritizing leads, a sales manager can also set a hard cutoff score for sales reps, telling them not to pursue leads who score lower than a certain threshold. This prevents reps from wasting valuable time and money on leads that end up nowhere.

2. Qualify Remote Customers

Now, most companies have a lead qualification process that gives reps a clear framework for determining a lead’s sales readiness on a one-by-one basis through conversation or research. But in the modern day, it’s much more likely that a customer might research your business first and browse your website before even considering making themselves known to you. In fact, according to Worldwide Business Research, B2B buyers are about 57-70% complete with their buying research before contacting the sales department.

Beyond a simple lead qualification process that relies on sales reps to individually qualify leads, automated lead scoring allows companies to qualify leads based on actions that sales reps can’t see, such as website visits and follows on social media. This helps businesses find, track, and accurately qualify online leads.

3. Improve Customer Satisfaction

Then, once a lead is assigned to a sales rep, lead scoring helps improve the quality of the conversation between the potential customer and the sales rep.

As competition between brands gets stiffer and stiffer, most companies rely on excellent customer service to derive value for their customers. But companies can’t rely on sales reps remembering the unique details of each customer; this fact is underscored by a famous study by anthropologist Robert Dunbar, who postulates that the human brain can only remember up to 150 people at any one time.

In other words, if sales reps are assigned too many leads, they can’t remember details about each lead. Lead scoring lets sales reps know who to prioritize and build true personal connections with, keeping reps stress-free and improving the quality of each unique sales conversation. That way, the leads who complete their purchase will have nothing but fond memories of their customer journey and are more likely to remain loyal customers.

4. Manage Your Sales Funnel

During the course of prospecting and nurturing leads, sales reps gain an innate, nonverbal sense of how likely each lead is to purchase. But how can reps succinctly communicate that information to managers?

Lead scoring provides an objective, easily-communicated numerical score for how valuable each lead is, giving sales managers discrete data points to analyze and draw conclusions. For example, rather than a verbose,

“About half of the leads from this neighborhood tend to fit our ideal age range and budget, but only half of those people have a relevant need for our product, except for one person who ticks all the boxes.”

A sales rep could simply report,

“This neighborhood has an average lead score of 55, with one outlier who’s a 95.”

Much simpler, isn’t it?

With faster communication between managers and their sales team, a company can quickly allocate reps and resources to the leads and lead sources that provide the most customers. As a company improves its lead generation, qualification, and nurturing processes, the lead score can also be used as a frame of reference to determine the effectiveness of each change, guiding the sales department’s strategies and optimization efforts.

How to Implement Lead Scoring

So, how exactly do you set up a lead scoring model, and what should you score your leads on? 

To start, there are two categories of attributes you can score your leads on: explicit attributes and implicit attributes.

• Explicit lead scoring is based on concrete demographic and firmographic data, usually received directly from your lead. This is also simply referred to as “demographic attributes.”
• Implicit lead scoring is based on observing your lead’s behavior when interacting with your company and extrapolating their interest levels from their actions. This is also simply referred to as “implicit attributes.”

A well-rounded lead scoring model must measure both explicit and implicit attributes to get a comprehensive sense of the lead’s interest. However, each industry, company, business model, and product is unique, so the exact attributes leads are scored on —as well as what construes a “passing” score— will vary from company to company. 

Rather than copying an example lead scoring template online, here are four simple steps to help you set up a lead scoring system tailor-made for your business process.

1. Understand Your Business Goals

Before you take a look at your customers, you’ll need to take a look at your business’s goals first. What sort of customers are you hoping to sell to, and for what purpose? Answering these questions will help you decide who to target and how.

For example, if your business is trying to expand into a new region, you would give a higher score to leads from that geographic area. If your company wants to focus on customer loyalty rather than customer acquisition, your lead scoring criteria will be quite different, as it would focus on signals from existing customers who might be open to upselling or cross-selling.

Identifying your business’s goals will help you identify what the most valuable lead attributes are, aligning your sales department with your company’s broader strategy.

2. Create Your Ideal Customer Profile

Next, set up your explicit lead scoring by listing out the demographic and firmographic attributes for your ideal customer profile, clearly describing what traits are correlated to customers who make purchases. To help you out on that front, here’s a list of attributes you could focus on for both B2B and B2C companies. Though this isn’t an exhaustive list, it’s a good starting point.

B2B	B2C
Firm Size	Age
Annual Revenue	Gender
Industry	Ethnicity
Growth Rate	Occupation
Team Size	Education
Average Order Value	Average Order Value
Location	Location
Preferred Communication Channels	Preferred Communication Channels
Challenges	Challenges
Reasons for Purchasing	Reasons for Purchasing
Goals	Goals

Ideally, you would get this information directly from the lead in exchange for gated content on your website. However, for more intensive lead qualification processes, it’s likely that your sales reps will also need to do some extra research or find out more information by talking to the lead.

3. Map Your Sales Process

Now we go into implicit lead scoring, or lead scoring based on your observations of a lead’s behavior during the sales process.

To do this, you’ll first have to map your sales funnel and customer journey from the moment your customer first hears of your brand all the way to their payment. To progress from one stage of the sales funnel to the next, there’s usually a discrete call to action or behavior that signals a customer’s increased interest in the product. Those actions will be the basis for your implicit lead scoring.

Broadly following the sales funnel, some actions you might assign point values to are:

• Following your company’s social media account
• Signing up for your company’s newsletter
• Opening a marketing email
• Clicking a link in a marketing email
• Visiting your website
• Calling a sales rep
• Requesting a demo of your product

These interactions should be weighted in accordance with how indicative of a sale they are. For example, though we said to assign values for visiting your website, visiting the product category or pricing page for your website should have a higher point value than visiting your educational or blog pages. You may also assign more points for repeated page visits.

If you’re unsure of what to score, consult your sales team to find out what they consider valuable interactions that indicate sales readiness.

4. Identify Deduction Criteria

Finally, now that you’ve determined how to assign points, it’s time to determine when to take points away. This will prevent score inflation and keep each lead’s score accurate over time.

Some example actions that could result in a point deduction are:

• Seeming like a spam account on social media (generic posts, following lots of people but having no followers)
• Improperly filling out a form for gated content (no capitalization, fake information)
• Using a personal email account rather than a business account
• Waiting too long between actions

Again, ask your sales reps when they would typically disqualify a lead to find more actions specific to your unique sales process.

Example Lead Scoring Model

Let’s put what we’ve learned into action by creating our own lead scoring model.

Let’s say that our company sells CRM software to retail businesses. Our ideal customer profile is someone in a high-level marketing or sales position at a mid-sized company that makes at least $30 million annually with at least 200 employees.

With that in mind, our scoring criteria might look like this:

Demographic Scoring		Behavioral Scoring
Firm size 150-250	5	Visited website	2
Sales-focused company	10	Opened email	3
Annual revenue over $30 million	10	Clicked on email link	5
Manager or higher	5	Submitted form for gated content	10
Gave name	5	Spoke to the chatbot	5
Gave email	5	Spoke to a sales rep	10
Expressed need for product	10	Requested free trial	15
Total Points:	50	Total Points:	50

We then add the demographic and behavioral scores together to get our final lead score on a scale of 0 to 100.

With this model, we might say that a lead with a score of 75 or higher is a hot lead that should be followed up with immediately, a lead with a score of 20-75 needs some more nurturing, and that leads with scores under 20 should be ignored entirely.

Conclusion

Once the scorecard is set up, lead scoring is a neat and simple way for sales teams to focus their efforts on the most promising leads, resulting in faster sales and higher conversion rates.

As each company has a unique sales process, it can be tricky to set up a lead scoring model that accurately captures the most qualified leads for your product. By following these simple steps, you’ve hopefully learned all you need to know to set up your own customized lead scoring system and score some major sales for your business.