What marketers get wrong about lead scoring

Recently, a team of SaaS marketers asked me about how we implemented lead scoring at VWO, and what they should be doing to implement the same for their product. They explained the approaches they were considering, and how they wanted to orchestrate the entire thing.

I asked them if the salesteam was involved, and they said not really. Their Head of Sales was passing by, so I asked him to come in to the meeting room and explain the problems his team was facing with leads, and their prioritization. He went on a slight rant, pointing out multiple issues that spanned process, enrichment, and fake leads from domains like mailinator.com. Interestingly, most of the issues that he mentioned weren’t really being considered by marketing.

I’ve been guilty of this myself… working on lead scoring as a pure intellectual exercise because all the SaaS blog posts out there say marketing should do it, vs. working with sales to understand their problems. The outcome was that we started pushing some lead scoring number into the CRM, but saw that sales didn’t give a damn, and simply ignored it.

There are two aspects that we marketers needs to understand here:

  1. What’s the job of lead scoring
  2. How lead scoring can lead to incredible alignment with sales

What’s the job of lead scoring?

Looking at it from a JTBD framework, the ‘job’ of lead scoring is to:

  1. Make sales more efficient… and not just attach a score to each lead
  2. Push marketing to deploy their muscle towards getting the right leads

After implementing lead scoring, sales should be picking up high quality leads quicker, and spending more time on them. Therefore, the way to measure successful lead scoring is:

  • short-term: a marked reduction in lead response time, and increased conversion rate from lead to opportunity
  • long-term: increased ‘opportunity to customer’ conversion rate, lesser churn and overall increased Average Revenue Per Customer

Marketing should spend more muscle towards acquiring, nurturing and preparing high quality leads.

Since marketing usually builds the lead score, they should approach it by looking to change sales’ behavior by understanding how they currently prioritize leads. If they don’t approach the problem from this key insight, it is likely that the lead scoring exercise will fail to deliver any real results in the long-term.

Also, the entire project requires the correct compensation plan, which incents acquiring, working and closing the right leads.

Anecdote: I once observed a colleague complete a sophisticated data analysis exercise and create a new lead scoring model, which they then dumped on the salesteam in a large meeting. They expected sales to enthusiastically adopt it, because it “came from the data”, but that didn’t happen. Sales was wary, almost hostile to the new model, and on questioning, explained that it didn’t gel with their comp plan. The incident taught me to start with understanding sales’ perspective first, proving to them that am trying to help, gaining some confidence and buy-in, and then proceeding.

On sales and marketing alignment

I recently read “Aligned to Achieve” by Tracy Eiler and Andrea Austin, respectively the CMO and VP, Enterprise Business at InsideView. It is an incredible book, and I recommend all B2B CEOs, marketers and salespeople read it. The authors dive deep into a problem that everyone knows about, some acknowledge, and very few try to solve so comprehensively.

In the book, one thread that comes up repeatedly is that data and lead scoring are key to great alignment between sales and marketing. Here are a couple excerpts:

Screen Shot 2017-06-28 at 3.56.47 PM Screen Shot 2017-06-28 at 3.54.16 PM

What are your thoughts on this? Have you faced any painful issues with either sales or marketing where you felt the other simply didn’t want to work with you, or didn’t trust you?

Quick and easy guide to SaaS lead scoring

When deciding on a lead scoring model for your enterprise B2B SaaS software, base your scoring on the following points:

  • The lever on which your pricing is based. For example, at VWO our pricing depends on the website traffic that you want to A/B test. So this becomes an important question for us to ask on any free-trial or ‘Request a Demo’ form.
  • How similar are they to the kind of people who normally buy your product? Here you’ll have rules like [+10 points because has ‘Director’ in title] AND [+20 because industry is ‘Ecommerce’], and so on.
  • The number of people from the same company that have signed up for your free-trial. The more the better.

Most people in SaaS expect (and hope?) that their lead-scoring model will be super scientific and involve lots of data… and they scoff at the notion of marketing just walking up to the sales team and asking them what factors should they give “points to”.

So here’s the deal, if you have a LOT of sanitized and well maintained data, then your data-scientist delivered lead scoring model will be awesome. If you don’t, like every other SaaS in the world, then the data-scientist will come back and say they’ve found no real correlations.

In that case, it’s better to just ask your experienced sales colleagues for the factors they consider important, and run a quick analysis of your Google Analytics + marketing automation data to compare converters vs. non-converters on pages per session, time on site, new vs. returning visitors, number of forms filled, etc.

We did this and the resultant lead score was pretty damn correlated to them being an enterprise customer or not.

Again, lots of people might laugh at you, but those people have no context of the [quality + quantity] of data that’s required to build a real, ‘scientific’ lead scoring model.

P.S. — Did you notice that I missed out on factoring in-app activity in your lead scoring model? Well here’s where ‘context’ comes in. In-app activity is important when your SaaS is mostly self-service, and the majority of your MRR comes from customers adding their credit card details and paying monthly. These are usually apps focused on SMBs.

Enterprise SaaS doesn’t work that way yet. For us, the number of users in the company joining the product demo is a better indicator than their actions inside the app.