Predictive Lead Scoring: Why It’s Essential For Your Business and How To Do It
If you work in marketing or sales, you want to prioritize the leads most valuable to your business. This ensures you are spending your limited time and resources where it counts, and makes you more profitable as a result.
That’s where lead scoring comes in. This is the process of assigning value, typically in the form of points, to each lead that you generate for your business. This gives you a clearer view of which leads are the highest value that you should be focusing on.
But while traditional lead scoring is important (and can be effective), it’s also inherently flawed. If you really want the best results, there’s a better way.
- Explaining traditional lead scoring and predictive lead scoring
- Why predictive lead scoring is better for your business
- Setting up predictive lead scoring in 4 steps
- Live chat: your secret weapon in improving predictive lead scoring results
Explaining traditional lead scoring and predictive lead scoring
With lead scoring in general, there are a number of different models that you can use. This includes demographic and behavioral lead scoring, although most lead scoring models will typically measure a combination of both.
While each business will have a different set of metrics that they consider the most important to measure, the sources of information for most lead scoring are generally the same.
With most traditional lead scoring models, for example, value is gathered from either explicit information or implicit information . Explicit information consists of details the lead voluntarily gives you (age or email address), while implicit information comes from actions the lead directly takes (opening an email or visiting your website). Most leads will participate in a combination of both.
Examples of traditional lead scoring include giving a lead a higher score if they have filled out a form in exchange for a lead magnet or visited your website numerous times. You might give them a lower score, meanwhile, if they haven’t opened any of your last few emails.
These scoring criteria are generally decided on by your marketing and sales teams. They should ideally have a good idea of which actions lead to the type of conversions you are tracking, but your criteria can be adapted with more feedback if deemed inaccurate.
In comparison to traditional lead scoring, though, predictive lead scoring is quite different.
|Traditional Lead Scoring
|Predictive Lead Scoring
|Source of data
|Manual, typically gathered from email service provider
|All information sources
|Amount of data
Here are the most important things you need to know:
- Predictive lead scoring combines your organization’s data sources and software algorithms to automatically process data about your leads. Through predictive analytics, it will take historical data of your leads’ past actions, determine common traits of leads that have or haven’t become customers, and cross reference these with other leads to see who is most valuable. Check out this guide to big data for more background information.
- It is based almost entirely on analysis tools. Whereas most forms of traditional lead scoring depend on the decisions of team members for which criteria get which value, predictive lead scoring is decidedly analytical and automatic.
- It relies on large amounts of data to function most effectively. This means that predictive lead scoring isn’t necessarily a good fit for all businesses, as it is dependent on how much data a company has at its disposal. While the benefits of the model are real, it’s particularly well-suited for companies that are a bit more mature.
Citing specific examples of predictive lead scoring in action is difficult. That’s because the algorithms behind its effectiveness ( logistic regression is just one example) are often extremely complex. Also, many predictive lead scoring models are considered “black box,” which means it is difficult to attribute which exact trait of your leads earn them a higher lead score.
Still, here’s what you need to know in one sentence: predictive lead scoring models find what good leads have in common, what bad leads have in common, and hidden patterns that would be impossible to spot for the average person.
Better yet, it does this with less input from your team, which as we’ll see in the next section, is both more accurate and effective for your business.
Why predictive lead scoring is better for your business
In many ways, traditional lead scoring models are quite subjective. Because most of the work of determining which metrics to measure and which information deserves a high lead score is done manually, traditional lead scoring is inherently biased.
To determine a lead’s relative worth, it relies on peoples’ personal opinions and input from numerous teams. It’s also generally based off of a small set of data points. While this keeps traditional lead scoring flexible, it also means that it’s often based on assumptions. Of course, traditional lead scoring can be “pushed” to more objectivity through data collection, but this is both time- and cost-intensive for teams.
In addition, because traditional lead scoring requires constant manual input to remain accurate, it can easily become stagnant. A common scenario for many well-intentioned businesses is that they get started with traditional lead scoring, set up a few metrics to judge...and then leave it. This means that even though the way their customers interact with their brand is constantly changing, their lead scoring model is not.
As a result, traditional lead scoring is much less accurate than it should be for best results.
Compare this to the self-updating algorithms of predictive lead scoring. Because this model utilizes advanced analytics and (potentially) thousands of data points, predictive lead scoring does away with subjective feeling and replaces it instead with statistical analysis. This eliminates much of human error and gives your organization a more objectively accurate idea of the true value of a lead.
A more precise process that lets you spend more time on the leads that matter. Indeed, there are numerous benefits of implementing predictive lead scoring
- Increased marketing effectiveness by delivering leads to your sales team that are more likely to close.
- Increased sales efficiency by spending your time and resources talking to the highest quality leads you have.
- Tighter overall alignment of marketing and sales , saving you time, effort and money. More time for your teams to engage in other activities, as most of the lead scoring is automatic and low maintenance.
- More opportunity to take advantage of data you collect. Many companies don’t know how to use the large amount of data they already generate and are thus at a disadvantage compared to the companies that do.
Of course, deciding to approach lead scoring with less direct intervention can be difficult. It’s natural for your marketing or sales team to want to interject with their own opinion about what actions are the most valuable.
Which, when you think about it, is perfectly understandable. After all, we’re all afraid of being replaced by robots!
But this often does more harm than good and results in a process that is not only a waste of time, but harmful to your bottom line as well.
Setting up predictive lead scoring in 4 steps
First of all, you need to have enough data to be statistically significant with your scoring. After all, even the most advanced analytical tools can’t do much without enough information. Second, you should already have a proven system in place that has made hundreds of (but preferably more) sales. All the data in the world doesn’t mean much for a company that doesn’t have enough success stories to back it up!
Assuming your business meets these criteria, here is how you can get started with predictive lead scoring today.
Select the right tools
As we mentioned, predictive lead scoring is much more hands off than traditional lead scoring (remember, one of the main benefits of predictive lead scoring is that it eliminates human error). This means for it to work well, it’s essential to pick the right tool. For predictive lead scoring this usually means predictive analytics software.
Check out this page to go through some of your options.
Identify your sources of data
To determine which combinations of lead data historically resulted in a sale, your predictive analytics software needs access to all the data sources that you have. This data will usually be logged in your CRM but can be spread out across a number of tools that your organization uses. Sources might include your email service provider, Google Analytics on your website, or a keyword planner tool like Ahrefs.
Trust the process
As mentioned before, predictive lead scoring is based on algorithms. This means that the way it determines lead value often doesn’t make sense to the naked eye. But assuming you are using a reputable tool, this shouldn’t be cause for worry. Plus, assuming you actually reach out to the leads that your predictive lead scoring model suggests, you’ll likely be pleased with the results!
It’s important to note here that while most predictive lead scoring software can (and should) run on its own, you can also set up filters. For example, if you only want to pursue customers in your home country, you can set up a filter to discount certain IP addresses (even if your analytics software has tagged somebody abroad as a hot lead).
You might also use filters to assign leads with certain attributes to the members of your team most qualified to help them. This is especially useful if you regularly deal with different languages or industries across your customer base.
Live chat: your secret weapon in improving predictive lead scoring results
Predictive lead scoring is all about accurate prediction of future actions. Unfortunately, if you don’t have a method in place for deepening lead relationships, they will never take action in the first place.
That’s where Userlike comes in.
Our live chat is an easy way to provide real time support to your website visitors. This makes it easy to engage with your potential leads and build relationships - the foundation for effective predictive lead scoring.
Using Userlike’s proactive chat, you can even set up a welcome message to display after a certain amount of time. To do this, simply look at the average time spent on a page and set the proactive invite to open 10-20 seconds later.
This ensures you are initiating a conversation with only the most interested visitors. It also shows your site visitors that you are dedicated to addressing any problems or questions they have. You can also easily send over material like a feature overview that your customer has asked for, or quickly escalate to an audio call in case a topic is particularly complex.
Plus, not only is Userlike an excellent tool for pursuing leads - it also generates valuable data for lead scoring itself. For example, customers that use live chat on your website are three times more likely to make a purchase than visitors who do not.
And as for people that have already purchased? Well, chat is also helpful for nurturing existing customers through quick and convenient communication. Upselling and cross selling, for example, has never been easier.
If you want a tool that accelerates your lead generation every step of the way, live chat truly is your secret weapon.
Ready to set yourself up for predictive lead scoring success?