And while that’s helpful, and certainly insightful, it’s not always the most in-depth analysis of what lead nurturing and scoring really is.
In this guide, we’re going to do a deep-dive into the subject, show you how it connects to generation, and teach you how to use it to the best of your ability.
Let’s get started.
Defining Lead Nurturing
First of all, lead nurturing is the act of continuously communicating and interacting with your potential customers, or prospects. This increases the company’s chances of converting (making a sale), and establishing a loyal, recurring customer base.
But we know that, right? Anyone who’s anyone in business learned this the first hour into their journey.
Well this is just half the battle.
Once your customers convert, you need to transition into what’s known as customer nurturing, because they’re no longer leads. And this involves communicating based on their buying habits, rewarding them for staying loyal, and incentivizing repeat purchases.
For instance, let’s say there’s a store owner who sells local artwork. Without his collaboration with local artists, he has nothing except his own work to sell, so he takes great pride and joy in his networking skills.
But he doesn’t translate that into lead nurturing. So when people pop into the store, or browse his website, he doesn’t greet them, doesn’t ask if they need help, or offer any insight on the pieces.
The few customers who do come by and help support the shop with their buying habits aren’t nurtured either. They don’t get discounts, there’s no reward program, etc. The store owner doesn’t even recommend pieces based on their buying habits or interests.
This is a terrible store owner who has no idea how lead nurturing works.
Defining Lead Scoring
Lead scoring is the process of essentially using a score system to better organize your prospects. Using their profile and behavioral data, you begin categorizing them, prioritizing those closer to the point of purchasing items from you, and better nurturing those who seem to be circling around too much without actually converting.
When combined with lead nurturing, scoring can really make a difference in how you interact with your prospects. Rather than take on a mass approach that only works for a fraction of them, you can better tailor your interactions based on where they are within your marketing funnel. This in turn improves the overall impression that your business and brand present to the world, and helps you better understand consumer psychology.
For example, perhaps you decide to create a score system based on product engagement actions. If a user returns to your product, either in a physical location, or on an ecommerce website, you take notice. Taking that into account, you’d them create a marketing solution, such as an email campaign that drives further interest to that same product, and highlights the benefits of such a purchase.
Side note: scoring is something you can do in a B2B setting as well, although it seems most entrepreneurs associate it with B2C. In B2B, you’d be scoring other business leaders and owners based on their level of interest in your offerings.
The Importance of Nurturing & Scoring
So, we know the importance of nurturing leads: without it you simply let people walk in and right back out without doing anything. You leave everything up to chance, not giving your business the benefit of potentially showing everything you have to offer.
Nurturing allows you to shine. It helps people understand what you’re all about, what you specialize in, and how it could benefit them.
But scoring importance might be overlooked, largely because too many entreprepreneurs fail to use a lead scoring system. Things like marketing segmentation are still not as popularized as it should be, and this is no exception.
Most of that is because people just don’t know any better. There’s not enough information out there that states that organizing your audience into categories is vital.
But a lot of it is also because entrepreneurs don’t see the benefit of such an action.
With scoring, you can better understand your audience, which leads to better advertising, video marketing, growth hacking, community spirit, and keyword research and SEO, to name a few things. You’ll know exactly how to pinpoint people’s needs based on their level of interest, so you don’t market to two groups the same way, effectively meeting everyone’s needs, and increasing your conversion rates.
Of course, none of this matters without lead generation. After all, you can’t nurture a prospect, or give them a score, if there are no prospects to begin with.
And a lot of lead generation works in tandem with lead magnets. Think free templates, cheat sheets, resource lists, or free workshops. Using freebies, you can give people insight and advice, gain their trust, and generate potential prospects that you can then nurture and score.
Once you have enough interest in your offerings, you can begin to focus on growth. Because that’s the objective, right? The whole idea behind getting prospects to turn into customers, and customers to turn into loyal, recurring customers, is to grow as a business and effectively become an industry leader.
Everything, from sending out birthday cards to making informative, actionable YouTube videos, ends up playing a role in business growth in the long run.
But again, the most valuable lesson so far: you have to take into account every prospect and every customer, in every stage of the life cycle. If you’re unsure if something is working, always use your A/B testing tactics, or hire someone who has a keen eye for this, such as a digital marketing consultant.
Designing Your Own Strategy
Now that we’ve covered all of the background information necessary to better understand the process, the objective, and the motivation behind lead nurturing and scoring, it’s time to design your very own strategy.
Consider this a step-by-step, in-depth section on just about everything there is to know to get things set up, go about the motions, and handle mishaps.
Six-Part Customer Lifecycle
There are six parts to a customer lifecycle: visitor, prospect, activated, customer, active customer, loyal customer. And between each of these parts, something happens to your business as a result.
Anytime someone visits your website (visitor), and then expresses interest by signing up or downloading something (prospect), your conversion rate gets a boost. When that prospect gets activated (a certain level of usage is reached), the activation rate gets a boost.
When that activated prospect finally pays for something, they turn into a customer, which in turn boosts your close rate. If that customer keeps regularly purchasing products/services from you, your daily active user rate goes up, along with your renewal and churn rates. Loyal customers will keep buying more things, and renewing services, and therefore, will affect referrals and NPS.
Consider this to be how customers experience a product/service. If they fall out of the life cycle, or get stuck, it’s up to you to nudge them in the right direction with relevant marketing, dictated by their position within the customer lifecycle.
If you need help with this, check out this handy in-depth guide with everything you need to know about funnel systems.
Setting A Score
The purpose of lead scoring is to prioritize leads, improve close rates, and even decrease the sales cycle. The less steps they linger in, the faster they get to the conversion part, and hopefully the recurring, loyal customer part.
And that requires that you gently push people in that direction.
For example, when a prospect expresses interest and signs up for something, say email, you can get their information. Drip emails drive more engagement, and affect things that influence the activation rate, such as analyzing prospect behavior, product engagement, and non-product engagement (see “Behavioral Data” below).
Based on this, you can design a scoring algorithm, give people scores, and determine whether you’re SDR ready.
Of course, your scoring will largely depend on which stage your company is in. Here’s what I mean:
Early Stage - When you’re seeking product-market fit.
In this stage, there’s so few leads that you still have time to catch up with every single one of them.
Still, implementing basic lead and user tracking systems comes in handy, since it allows you to collect valuable information on prospects before they buy anything.
This data can then be used to better understand your audience and develop a scoring strategy.
For example, you’ll be able to run statistical correlation analysis on what actions or patterns of interaction usually result in purchases.
Growth Stage - When you’re expanding your markets, scaling, and dealing with growing demand.
This is when lead scoring is fully implemented, building on the basic tracking system developed in the early stage.
The company generate higher inbound demand, so the goal is to identify prospects that have specific pain points that you can solve. And those people need to be nurtured.
This nurturing process can be anything from communication to segmented and targeted approaches, such as constructing email drip campaigns that cater to specific market segments.
The goal is to divide communications by intention, never treating your audience as a collective, but rather a series of groups made up of prospects/customers with similar needs.
Maturity Stage - When you’re focusing on optimization.
This is when a company should have a very well established lead nurturing and scoring system in place.
The difference here is that the mature company will have more data to use in their analysis, and they’ll have a further understanding of their audience on a vertical scale (by pain point, by buyer role, etc).
A note on FIT and PAIN: lead scoring directly correlates to both FIT and PAIN. It effectively provides a quantifiable answer to questions such as:
“Is this prospect experiencing something that our product provides a solution to?” - PAIN (the more they genuinely need your offering to solve their problem, the higher their interest)
“Does this prospect have the budget to pay for our product, and the resource to implement it?” - FIT (demographics, firmographics, budget, authority, time)
Which gives us a pretty basic formula to go off of:
Lead Score = FIT + PAIN Scores
From here, you can develop a ranking system that keeps things streamlined, effective, and organized. For example:
A Leads - (100 score) - SDR Ready
B Leads - (75-99 score)
C Leads (50-74 score)
D Leads (Below 50 score)
Still, this system can become problematic when you stop to consider the differences between C and D leads. How should one be treated over the other, and is there really much of a difference between the two groups?
One member of your team might think one way, while another might argue the opposite.
This is why many take on an approach that further organizes things into two groups: behavioral and profile. Using both data points, scoring them individually, and then combining those scores has proven itself to be the most effective, and commonly used method of lead scoring.
Think of this data as the kind that makes up general background information. Things like email, title, company, location and size. Depending on who you’re dealing with, the brand, and the product, the importance of each profile characteristic can be lower or higher.
For example, corporate emails get higher scores than personal ones. If the prospect is a manager or VP, the score is higher as well. If the company isn’t on your list of ideal clients, it ranks lower, but if the location of it somehow holds real value to you, it ranks back up. Things like size will largely vary in their scores depending on your objectives. If size of sales organizations is important to you, for your metrics, then you rank them higher.
Scoring behavioral data is far more challenging than common profile specifications, mainly because there’s a lot more factors involved, all of which are dynamic, which means more monitoring and following up.
There are some tools that help track this information, but a lot of it will fall onto your team to monitor, since there’s a lot of ground to cover.
The good news is that all behavioral data, no matter how intricate, can be categorized into one of two forms of engagement:
Product Engagement - these are actions that prospects perform inside, or with, your product. This is their direct interaction with what it is you’re selling. This counts even if your product is being returned, used effectively or ineffectively, etc.
Non-Product Engagement - these are the actions that prospects perform outside of your product, such as registering for a webinar, or visiting your pricing information. Clicking around on your website, without actually buying anything, or using your products, is a good example. Even watching influencer videos about your offerings counts, since they’re still not directly interacting with the product itself.
Although it might seem pointless, scoring someone based on mundane actions, like clicking on a link, is still important. It scores them based on their level of interest, or curiosity. The higher that interest (PAIN) it, the higher the time investment that person is willing to invest, which makes them valuable.
Of course, there is such a thing as “bad” scoring. For example, email clicks and website visits can be scored, but they’re such common behavior that they’re not always the best sign of genuine interest. Instead, set a small score to those mundane actions, and save the bigger scores for the free trial sign-ups, logins, and other actions that actually take intentional effort.
Just remember, the biggest lesson to learn when scoring is that you should always prioritize the actions that have a higher chance of leading to a sale. The farther away their actions are from that end goal, the lower the score should be.
Factors to Consider
Remember our formula from earlier?
Lead Score = FIT + PAIN Scores
Well, let’s dive a little deeper, connecting that with what we just covered on the profile and behavioral front.
Lead Score = FIT (profile + demographics) + PAIN Scores (behavioral)
Suddenly, everything comes together. You know exactly how to score a lead based on their FIT and PAIN scores, and you know exactly what those scores consists of.
But that’s not the end all, be all of lead nurturing and scoring. Again, this is something you’ll be tackling with a team of people, which means you all need to be on the same page.
For instance, do you all agree on the same definition of a lead?
Here are a few things to consider when moving forward with your team:
Are you tracking customer interactions with your product as early as you can?
Once you have enough data for correlation and regression analysis, it’s time to create a list of actions and engagements from highest to lowest probability to close. What does this do? It helps you determine which actions will increase those probability rates for all of your prospects, effectively resulting in more customers.
Are you using correlation analysis to identify factors that impact deal-closing the most?
Prioritize your actions based on the probability of closing. What does this do? It gets you and your sales team to focus on immediate close potential, thus increasing revenue and conversion rates quicker. It also helps everyone realize which factors most contribute to a close, and how to handle a close, so it gets easier every time.
Are you assigning scores to engagement actions? It’s the best way to turn probability percentages into numerical scores, which is the whole objective. If one specific prospect action increases the probability to close by 50%, you could just assign 50 lead scoring points to all the prospects who have completed that same action.
Mistakes to Avoid
Before we move along, notice we’ve been covering all the things you should keep in mind, look for, and plan when developing your own strategy.
So, now it’s time to discuss some of the things you should be avoiding at all costs when lead nurturing and scoring.
Understand that the goal of lead scoring is to help prioritize leads, you that you know who’s closest to converting, and who’s not. This does not mean that you should forget the rest of your prospects, however. Too many times, entrepreneurs only begin to truly value their prospects once they get past a point, and show signs of wanting to make a purchase, but the only way to get someone to that point is to nurture them and value them the whole way through your funnel.
FIT has everything to do with your business goals, and the realistic financial status of your target audience. Many prospects will never convert, not because of a lack of interest or need, but rather a lack of finances. If you did your research and planning correctly, you’ll have noticed this in demographics, and opted to nurture those with the funds to actually purchase your products. This means two things:
Don’t waste time nurturing prospects that cannot and will not ever convert due to lack of finances…
Unless you develop a cheaper alternative to your offering that they can afford, and that they still want/need to solve their problem (PAIN).
Which brings us to the next point: developing a cheaper range that is much more affordable isn’t a sign of a weaker, less exclusive brand. It’s all about who you collaborate with. The best way to go about it is to analyze the prospects that have an interest in your offerings, but can’t convert. Who else do they shop with who shares similar goals and stylings as your brand? Does any collaborating with one or more of those brands make sense? If the answer is yes, then pay attention to their audience. Will their awareness of your brand make a difference in your sales? Will it earn you traffic? Again, this means a few things:
If you collaborate with a brand who’s audience would show no interest in your brand, you’re wasting time.
Ensure that the brand you collaborate with shares the same values and goals as you, because that will guarantee you both use each other’s resources for the same reasons (win-win).
Only go as “cheap” as you’re willing to go. For instance, if you’re selling items in the $800-2,000 range, and you’re not looking to change that, don’t collaborate with brands that sell their items for less, because their audience will never buy from you. If you’re open to a cheaper range and collaboration, you’d be looking to cut your production costs by 50% (cheaper means making sacrifices to quality) and settling for 75% less of the profits you’re used to getting (50% from the lower prices, plus 25% from splitting profits with your collaborator), which means volume is the ticket to a good ROI. Use SEO wisely and boost your traffic as much as possible.
Don’t score too many factors. Scoring over 20 factors is overcomplicated, and guaranteed to send your team into a frenzy of confusion, mismanaged data, and wasted time. Reduce your list to anywhere between 15-20 at most by setting a cut-off probability-to-close, where any engagement below a certain amount won’t contribute to overall score.
Never use your personal experience and intuition when it comes to lead scoring. There’s a time and a place for this approach, say when you’re writing your own company story, and remembering how your experience with a specific problem gave way to a solution that you then chose to sell to others. But in lead scoring, personal experience and intuition tend to come across as biases, which taint data.
Not realizing that new features and release details are ideal for drip campaign nurturing. What better way to generate more interest in your products and services, than to highlight the new additions and facelifts its received? Every single time there’s something new, let your prospects know, whether they’re still being nurtured, or recurring customers already. This line of communication should always be kept open.
Not using a chatbot to answer basic business questions and hand out incentives, such as discount codes is a massive mistake. This is a great way to generate interest, stay in touch, and nurture prospects even while you sleep.
Once You Reach Your SDR Score
Finally, it’s time to discuss what happens when your target lead score is reached. Establishing this plan of action keeps your team organized, knowledgeable, and efficient.
The best plan of action is to reach out and have an Account Executive (AE) handling the matter within 48 hours. This finalizes a sale, capitalizing on the significant interest noticed in the prospect.
But there are three categories of lead score that can be reached, and this will determine what’s to be done:
The first group is the high PAIN, good FIT category. This is the one that gets handed off to the AE to complete the sales process.
The second group is the “maybe,” characterized by their good FIT, and low PAIN, or high PAIN, and bad FIT. These prospects get assigned an email drip that further nurtures them while awaiting for circumstances to change.
The final group is the “never” group, with their bad FIT and low PAIN. You can technically still score them, and add them to an email drip, but don’t waste too many resources here. The changes of them converting are very minimal, at best.
Now, there is one exception to this rule of 3 categories: the group with high PAIN and a good FIT doesn’t always convert when you want them to. For whatever reason outside of your control, if the prospect does not become a paying customer, you can still add them to a drip campaign, and nurture them. Their circumstances could change in the near future, so don’t lose heart.
Some things to consider are that people get busy and stop focusing on your offerings, people can lose their jobs overnight either due to big corporate cuts (layoffs) or firings, and sometimes competition gets in the way. If a competitor launches a new product that directly undercuts yours, and challenges your every feature, you may find that several qualified prospects get put “on hold.”
This doesn’t mean that competition rendered your hard work useless, it simply means that’s how it goes for everyone in business. Their sales may skyrocket for a time, before plummeting, or yours may be placed on hold for all of a week before a windfall of sales. Anything is possible.
The best course of action is to keep focused, keep nurturing, and use all your resources. Think landing pages, social media accounts, email campaigns, ads, smart copywriting, and press releases that generate attention toward your offerings, assuming you have something story worthy enough to capture a journalist’s interest.
As you hopefully learned by now, there’s a lot that goes into lead nurturing and scoring, from the moment someone clicks on an ad or CTA button, to the second they become a recurring customer.
As an entrepreneur, your goal is to find a solution to a problem that you can sell to the people still struggling with a problem you once had. And when you do that, and market yourself effectively, sticking to a price point that directly aligns with your audience demographics, you’re on your way to success.
But it takes much more than just marketing and having a solid product on your hands. You have to nurture people through your marketing funnel, coaching them through, giving them precisely what they need when they need it, so that you can encourage sales. Each time they do something toward that end goal, you score them higher and higher.
Once you reach your target lead score, it’s time to follow-up in a timely manner. Hand the prospect off to an Account Executive to carry out the sales process. Otherwise, if it’s determined that the prospect is a bad FIT, or won’t ever convert, then they’re categorized under either a “maybe” group, and assigned a drip email, or the “never” group and left alone.
It sounds like a lot of work, because it is, but once your strategy is in place, and the kinks are sorted out, the lead nurturing and scoring process can save you a lot of time in the long run. And remember, if you think this is too much to handle, or you lack the time, you can always hire a digital marketing consultant to help you out.
So, which part of lead nurturing and scoring do you think will be the most difficult for you to follow? Why?
Let me know in the comments section below, I love hearing from you all!