Take a minute to envision the typical marketing funnel. At the top is a wide selection of leads. As leads progress down the funnel, an increasing number are removed from the funnel until your business is left with customers.
Companies that are able to create a more efficient funnel tend to have wider middles and bottoms than companies that have a wide top that dramatically tapers at the bottom. Businesses with efficient funnels are able to attract and close the right customers quickly. Doing this helps businesses to reduce customer acquisition cost (CAC), and/or reduce months to recover CAC. Additionally, it can ensure that your sales team uses their time efficiently by focusing only on leads that are likely to become customers.
A great way to improve funnel efficiency is by incorporating a lead scoring system into lead-nurturing campaigns, especially if those campaigns are running via email marketing. This article will review how and why marketers should consider implementing this type of system.
What is lead scoring?
Jason Lemkin, a well-known venture capitalist, is the founder of SaaStr and EchoSign. He is an expert in SaaS sales. When asked what separates top salespeople from the rest, he wrote, “One difference between the Top 10 percent and the Top 1 percent is the very top are extremely efficient with their time.… They know exactly what they are doing going into every deal, usually even before they even do the demo or pick up the phone.”
Lead scoring can help turn salespeople into top 1 percent sales people by sending only the most qualified leads to the sales team. While there are a number of different ways to approach lead scoring (some of which will be covered in this article), all lead scoring uses some sort of algorithm to determine lead qualification.
Of course, lead scoring is not just for businesses within an in-house sales team. Businesses of all types can use lead scoring to sort highly qualified potential customers from the rest. Once sorted, marketers can take special steps to encourage qualified leads to make a purchase.
Lead scoring algorithms can be created using most marketing-automation tools. Alternatively, marketers may opt for a third-party lead scoring tool that can integrate with an existing marketing-automation platform or CRM. Either way, using a lead-scoring algorithm helps marketers automate what would otherwise be a time-consuming task. This helps to improve customer experience while making your funnel more efficient.
Engagement- and behavior-based workflows
One way to think about lead scoring is to think about a prospect’s engagement. Presumably, prospects that are more engaged with your brand are more likely to become customers than those that are less engaged. That is the hypothesis behind engagement-based workflows.
Many companies rely on engagement-based workflows to sort leads into various email workflows. Depending on the level of engagement, a contact will receive email content aligned with the appropriate stage in the buyer’s journey.
Contacts who are less engaged usually receive top-of-the-funnel content, like blog posts or infographics. Contacts who are somewhat engaged receive middle-of-the-funnel content, like white papers and webinars. Contacts who are highly engaged receive bottom-of-the-funnel content, like a video demonstration of the product or service.
As a contact becomes more engaged with a brand, either on social media or on a company’s website, the contact will be transferred from one pre-built email workflow to the next.
It may be tempting to only measure website engagement when calculating an engagement score. But one study found that 95 percent of people between the ages of 18 and 34 engaged with brands on social media. Investing in a social media tool, like an Instagram analytics platform, may be a good idea for brands that hope to target younger consumers given the data above.
Fit score and segmented workflows
Another way of thinking about lead scoring is to focus on a lead’s fit. A fit score, which is usually graded from “A” to “F,” signifies how well a prospect fits your business’s ideal customer profile (ICP). Customers who are a good fit (usually “A” to “C”) are passed on to the sales team. Leads that are not a good fit are nurtured by the marketing team until they become a good fit—if they ever do.
Marketers may also choose to create workflows that are specifically for leads with a particular fit score. Usually, it is best if the email workflow focuses on unique aspects of leads with a specific fit score. Email segmentation and personalization have been found to significantly improve email marketing performance. Creating a workflow based on fit scores will help improve email marketing performance, while also making your sales team more effective.
Marketers interested in improving funnel efficiency, or business leaders hoping to improve the effectiveness of a sales team, should consider creating a lead scoring system. The system can be based on lead engagement, lead fit or both. Once created, marketers can improve funnel performance by creating lead-nurturing programs for specific segments of a database. At the same time, a lead-scoring system can help sales teams to focus on the right contacts, making them more efficient, while improving the customer experience.