When Lead Scoring Will Fail

Having worked with B2B marketers for many years, it's typically a no-brainer when someone asks me "should we implement lead scoring?". Lead scoring, which is the process of automating the qualification of leads that you generate, is a key stepping stone to get marketers to the next level. Having said that, your company may not be fully ready for it and there are some steps to start moving in the right direction. Lead scoring can't be used as a band-aid for companies that have incomplete processes. I'll outline some items that will prevent your organization from a successful launch of lead scoring. I'm not saying that you need to nail all of these before you start down the lead scoring path. Lead scoring evolves over time. However, you should consider these items.

Top Five Reasons Lead Scoring Will Fail

1. Not enough leads. I read a recent Marketing Sherpa article about a company that was able to produce some awesome lead gen results without a CRM or lead scoring. You can get away with this if your a small company starting out and your still ramping up your demand generation efforts. You really need a large supply of leads to justify lead scoring. Lead scoring is disruptive for organizations as your automating the prioritization of how leads should be followed up on. If there are not enough leads then sales or the tele-prospecting team will jump on every lead regardless of the best lead scoring system put in place. People need to make their quotas.
2. There is no end goal. Lead scoring can't be something that you setup just to cross it off your marketing automation checklist. It must be setup with a goal in mind. Typically it has a dual purpose: it helps sales prioritize the follow up of qualified leads and it helps marketing determine the type of offers that should be sent as lead scoring is tied to the different stages of a buyer's journey. Possible goals can include increasing the velocity of leads through the sales funnel, increasing the overall revenue generated by sales, launching a specific lead nurturing campaign that is geared to leads with a low lead score etc...  You also should consider the emotional side (have you read Switch?)- making sales people happy and giving more power and respect to marketing. These aren't as flashy to the CEO but they make things more enticing for both sales and marketing. Besides winning a Markie (special award for marketers), the biggest award I've seen given to a marketer was receiving recognition from the sales team of a job well done.
3. Unrealistic expectations. Lead scoring at the moment is still not a science. It will not slice bread. It will not make your product more attractive. It will not generate more leads (it may reduce the number of leads). Many marketers and sales teams see it as the bright shiny toy on the shelf that they have to have. They think it will solve all of their problems. It won't. It will promote some great conversations and it can help you improve your lead generation engine but this will take time. Because lead scoring is not a science it will require some tweaking and fine tuning. Don't expect it to move mountains after a few days.
   
   I also see sales teams that want to take over the lead scoring discussions and build out very elaborate and complicated lead scoring models that use some of the traditional BANT criteria that sales teams have used for years to qualify leads. I don't recommend that lead scoring be used for that purpose and I'm not alone (See: Why BANT No Longer Applies for B2B Lead Qualification).  Automated lead scoring is best used or doing an initial qualification of leads that meet a minimal level of an agreed upon definition between sales and marketing of a "qualified lead: and then having a tele-prospecting team do further qualification to see if a real sales opportunity exists. At that stage, there are different tools that sales can use to determine if a prospect is really engaged or not.
4. Too many lead scoring criteria at the beginning. I recommend using five criteria to track the profile of an individual (job role, industry, company size etc...) and five criteria to track engagement (recency and frequency of web visits, social media activity, email responses, form completions etc..) to start off with. Test out the criteria and see if it's working after three months. You may find that you can add some additional criteria based on discussions with your sales team. Build in a schedule for a regular review of your lead scoring criteria.
5. Not enough data. I still help review about one lead scoring model each week on average and one of the biggest issues I see is lead scoring programs that are scoring on data points that don't exist. Your lead scoring criteria can't be created in a vacuum. For example, if your going to score leads based on industry, review your web forms to determine if you are collecting that data. Review your live events to see if you ask that question at booths and/or roadshows. The score is only as good as the data you are collecting. You may even require some additional data tools to clean your data and append additional information.
   
   In addition, you need to review your lead scoring model every 3-6 months to ensure that it's still producing enough quality leads. If you don't do this, sales will ignore the lead score and you will be back to square one.

Another  top reason that lead scoring typically fails and a common thread through these five items is the lack of alignment between marketing and sales. These two teams need to work together and have common goals to get the most out of lead scoring. I have seen lead scoring work when the end goal was to help marketing segment their database and serve up different pieces of content but you can only get so far without having a good relationship with sales. The success of your business depends on a close tie between these two groups.

This is not meant to discourage you but it's something to keep in mind when thinking about a lead scoring project. Many companies I work with will concentrate on getting their database in order first as well as creating nurturing paths to help enrich their database before tackling scoring. It comes down to your priorities.

Articles to consider: Lead Scoring Has Drastically Changed – How do You Measure up?

Image courtesy of Beachhead Marketing

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Lead Scoring Has Drastically Changed – How do You Measure up?

With my son Matthew turning one this week, I’m feeling a bit nostalgic. I dug up and started contributing to a personal online journal that I hadn’t touched since 2004, reviewed pictures from past trips with my wife, and reflected on memories that I’ve had in my first year as a dad. Taking a look back and reliving great times in your life provides perspective and helps explain how things have changed. One year ago I had no clue on how to  change a diaper nor did I realize what a luxury it was to get a full night’s rest.

I’ve come a long way this year - working hard at being a good father and developing a close bond with my son and I couldn’t be happier. I would encourage you to take some time to reflect on changes within your own life and the impact they’ve had on you whether it was a new job, a new home or a new perspective you’ve taken in your life.

I’ve also just passed my five year anniversary at Eloqua where I’m a Regional Manager on the Customer Success Team. I’ve seen many changes both at Eloqua and in the marketing automation industry over this time. In this post, I’m going to focus on how the process of developing a lead scoring program has transformed over the years. But first, let's go back in time to a typical (yet abbreviated and simplified) conversation around lead scoring circa 2005:

B2B marketer: “The sales team thinks the leads we send them are garbage. For them to take marketing seriously, I need to deliver higher quality leads rather than just focusing on quantity. What should we do?”
 
Me: “Implementing an automated lead scoring process should help here but it will depend on the lead management definitions you currently have in place. How do you define what a qualified lead is? Is this something that both marketing and sales agree on?”
 
B2B marketer: “A qualified lead is someone that has a specific challenge that our product can solve, has the budget to pay for our product and has the authority to get the deal done”.
 
Me: “OK, assuming you have worked out the specifics and have buy-in from sales, what are the key online behaviours that would indicate that one lead should be rated higher than the other?
 
B2B marketer: “Well, if the lead has attended an event of ours, let’s rate that higher and if they’ve visited 20+ pages and opened 5 or emails, I would consider that someone our sales team should follow up with”.

Based on these discussions, the marketer would further define her/his requirements and then go and build out the lead scoring program. Hopefully the assumptions made were correct and more qualified leads would be passed to sales. These were also the days of the “big ‘ole forms” on your website where you asked for every piece of BANT question that sales wanted and assumed that the data provided by registrants was accurate. If you found you weren’t getting enough qualified leads, you adjusted your lead scoring program accordingly based on feedback from sales and by reviewing the data.

The Hover Board

Fast forward to 2010 and in five short years, there are a number of new factors that that must be taken into consideration when designing your lead scoring program. Here are a few items to consider:

The accuracy of data captured has decreased over time

A recent GoogleTechTarget survey has found that almost 50% of the administrators, directors and executives from technology firms interviewed provided inaccurate data on web forms because these people didn’t want to be contacted when they were doing some simple research on a topic of interest. Therefore, a different strategy on how to best capture “explicit criteria” (BANT, job title, size of company) for lead scoring is needed. I'm not discounting the qualification process that can be done by an inside sales or teleprospecting team but an automated lead scoring process can weed out some of the "garbage" and allow these teams to increase the number of sales accepted leads.

Techniques such as progressive profiling where you build the visitor profile over time assists in developing more accurate data to score on. The progressive profiling technique should only ask the required information that a company needs for the specific buyer stage that the web visitor is in. If someone is signing up for a newsletter, only a few details such as a person’s email address and their preferences should be required. Additional information can be slowly obtained in a future campaign such as a multi-touch lead nurturing program. In addition, progressive profiling allows the marketer to record online behaviour that can feed into the scoring process.

Automate your data cleansing process

Broken Telephone

While you try and prevent inaccurate data from making it through the front door of your database, it finds multiple ways to seep in there. This will affect what you can score on as the data is not consistent enough. Let’s take job title as an example. Many of my clients use job title as an indicator for their lead scoring model. They’ve found that there are certain roles within an organization that have the highest probability to generate a sales opportunity. While marketing would prefer to force web visitors to select a specific job role when completing a form for accuracy purposes, sales people want to know the exact title. In addition, when collecting leads across various channels and sources, maintaining consistency is almost impossible.

A solution to this problem is an automated process called the “The Contact Washing Machine”. The goal of this program is to review the data that is fed into it and normalize it. For example, if we take the job title example, a Contact Washing Machine would bucket titles into specific categories as defined by marketing. Database records are updated with this normalized title which can then be used for scoring and other segmentation purposes. A great example of a Contact Washing Machine is provided by Amit Varshneya who is the VP of marketing at Hexaware Technologies.

Scoring should reflect the buyers’ journey and your defined sales/marketing stages

When developing a lead scoring program in the past, points were allotted for downloading certain pieces of content based on how marketing and sales subjectively perceived certain materials to valued by the prospect. Today, the assumptions that are made when building the lead scoring matrix are more firmly based on the buyer’s journey as defined by real data with input from sales, marketing, and third party sources. The 2009 TechTarget Media Consumption Benchmark guide confirmed that IT buyers favoured different online materials as they progressed through the buying process. Here is an example of the different materials that IT buyers review across the different buying stages:

By going through the process of mapping out the content that your buyers accessed at various stages in their evaluation process, it ensures that the actual score and associated ranking of leads is more accurate and provides a better indicator to sales on how to prioritize their follow ups. In fact, in a DemandGen Report survey called Transforming the BtoB Buying Process found that “more than 8 in 10 respondents said the buying process did not follow a traditional path where a budget was established”. Therefore the BANT criteria is not enough to accurately assess leads and may actually prevent sales ready leads from rising to the top.

As a best practice, I now recommend breaking out the explicit lead scoring criteria (job title, lead source, size of company) from the implicit criteria (activity) to provide a more accurate picture for the sales team that they can action on. Therefore, you may have a lead with a low explicit rank of a C (where A is the highest and D is the lowest) but has a high implicit score of 1 (with 1 the highest and 4 the lowest). This combined lead rank of C1 is a lead that sales should prioritize as the explicit information provided may be inaccurate but the implicit criteria or the Digital Body Language demonstrates that this person is definitely interested in your company.

In addition, best in class organizations have tied their sales/marketing funnel to their lead ranking definitions. Therefore, in order for a lead to be considered a marketing qualified lead (or MQL as defined by SiriusDecisions Demand Waterfall), it must attain a certain lead ranking such as A1 or C2. To the right is a good visualization of how an MQL may be defined when using Lead Scoring.

I’ve also included a great video that shows you how this is used in the lead management process:



Here are few examples that I recommend you review to get a better feel for this concept:

• Terracotta: Lead Scoring A Buyer’s Journey in Open Source. In this example, Terracotta mapped out the different types of behaviours that made up the different stages that a buyer progresses through. They then used this to build their lead scoring matrix and constantly tweak the lead scoring algorithm to get more accurate results.
  
• Taleo: Seeding and Cultivating the Taleo Revenue Engine with Lead Nurturing. The VP of Marketing Doug Sechrist stated “We built a matrix that looks at the buyer’s journey and our sales cycle, and based on that, we determined the right content for each touch point.” Besides lead nurturing, the buyer’s journey influenced its lead scoring rankings and determined the stage of the buyer. The case study goes on to outline how Taleo only sends A and B rated leads to inside sales as these are defined as MQLs (marketing qualified leads). 

How marketing is now measured has made lead scoring more palatable

In my lead scoring example from 2005 above, marketers were mainly focused on the quantity of leads at the top of the funnel. There is no question that this is still the case today for a large percentage of B2B organizations but after having gone through a recession in 2009 and slowly working out from its shadow in 2010, marketing needs to do more to justify its budget to the other C level executives. Today’s B2B marketers are looking further down the marketing/sales funnel at metrics such as the number of marketing influenced opportunities, the velocity of deals that move through the sales/marketing funnel, the conversion rates across different stages in the funnel, the number of closed deals, revenue generated and ROI on campaigns. By focusing on higher qualified leads that can help sales reach their goals more quickly and impact these new joint metrics, lead scoring has been an easier concept to sell to marketing and sales organizations.

I don’t have to look any further for an example of this exact transformation than from within my own organization as described by our Senior VP of Worldwide Sales, Alex Shootman, in his post: At The Wheel of the Revenue Machine: But What if I Want to Follow Up on “D” Leads?. It took a shared goal of increasing revenue and a commitment from sales and marketing to work closer together to help make scoring more relevant in the lead management process. And guess what – if you’re reading about this, you can bet that your competitors either have lead scoring in place or are considering it. Don’t wait for them to beat you to the punch.

I’m sure others can add additional points on how lead scoring has progressed over time but this is one of the few chances I get to sleep and I need to take advantage of it while it lasts! Do let me know if you think I’m missing anything. On a final note as I wrap this up I would like to thank my wife, Allie, who has made being a father easy over this past year and has been such a wonderful mother to our son. I would also like to thank all of the Eloquans – past and present, partners, and customers that I’ve had the pleasure of working with over the past five years and plan to continue working with.

Regards,

Chad H.
@chadhorenfeldt

PS – For something fun, check out Juan Eloqua and the Grande Guide to Lead Scoring

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Wake up and Send More Email

Social media is all the rage these days and I’m in complete agreement that it should be part of your campaigns but let’s not overlook the power of email and how it’s being underutilized by many organizations today. From conversations that I have with marketers I sometimes sense this feeling of anxiety when I recommend that they should increase the frequency of emails that are sent to their opted-in database. This fear stems from a number of different sources and I typically hear the following:

• We don’t have anything good to send to our database
• We don’t have any time-sensitive events that we need to promote
• We’re sending too many emails already
• We need to cleanse our database first before executing campaigns

Don’t get me wrong, I’m not saying that you should go and carpet bomb your database with a press release on how your company now has an office in the North Pole to service the growing northern population. On the other hand, what you may find is that there are opportunities to send more relevant and timely email communications to certain segments of your database. Let’s take a closer look at these sources of fear when it comes to pulling the email trigger to help marketers break free from their “email frequaphobia”.

”We don’t have anything good to send to our database”

There is an inherent issue with this statement. When the marketer says “we don’t have anything good to SEND to our database”, they assume that the marketer is defining how and when the buyer should receive information. In today’s B2B purchase process, the marketer is no longer in charge. The marketer needs to make educational materials that will guide the prospect along the buyer’s journey as they progress through the evaluation stages to the eventual product purchase. If this is not done, there is a greater chance that leads will leak out of the sales and marketing funnel and may go to the competition.

Therefore, marketing organizations can no longer use this statement as a crutch. What is recommended is to map out the content that prospective buyers would be interested in at various stages of the sales process and automate the delivery of this communication. In terms of having the necessary content, many organizations may be surprised at the content that they already possess. Review your website and other sources such as blogs and previous campaigns and look at ways that content can be repurposed (I talk more about this here: The Recession is Here - Time to Become an Eco-Marketer). If the email content is relevant based on a prospect’s recent behaviors, then increased frequency becomes a non-issue. Yes, these initiatives will require resources to prepare the content as well to set up these types of campaigns but it is well worth it – trust me. You can also take advantage of technology to at least help with the campaign execution piece. My recommendation is to start small and show results and then build on that momentum.

“We don’t have any time-sensitive events that we need to promote”

This statement is very similar to the first section. Just because you’re not presenting at tradeshows or executing monthly webinars doesn’t mean that your database should not be receiving regular communication from you. Here are a few campaign ideas to consider when thinking about providing relevant and engaging content via email:

• Email newsletters. This tried and true communication piece will work as long as the content is good (i.e. more educational than promotional)

• Welcome Program to ramp up new email subscribers on the resources available to them. See: Ready to Welcome Your New Leads?
• Lead Nurturing Programs for leads that are currently evaluating your product or services
• Longer term lead nurturing programs for leads that have been passed back to marketing
• Reengagement Programs. These are programs that target leads that are associated to stalled opportunities or contacts in your marketing database that are no longer responding to your emails.
• Additional event triggered communication. For example, I describe how you can engage web visitors that have searched for something on your website but couldn’t find what they’re looking for: http://eloqua.blogspot.com/2010/02/engage-search-visitors-viatriggered.html
• Customer communications. This may include emails for new clients, timely product usage information, regular tips and tricks and renewal notices. It all depends on your type of business but I’m sure there are not many companies that couldn’t improve in this area.
• Social media highlights. If you have a blog, Twitter account and/or YouTube channel, consider blending the best content from these different sources into an email that can be shared by your email subscribers. Don’t assume that just because you tweet that people read it. Use email as the glue to your social media efforts to get the most out of your social media content. Consider adding RSS feeds from these channels directly to your emails (an oldie but goodie: Latest Trends in Email Marketing: RSS and Calendar Reminders).

Part of this effort is creating a lead nurturing culture in organizations which I’ve outlined here: How To Build a Lead Nurturing Culture Part I.

“We’re sending too many emails already”

You may have this gut feeling that your sending too many emails to your database and that if you keep sending emails that your subscribers will call it quits. This issue tends to generate even more hysterics in larger organizations. The first thing you need to do is to get a handle on how many emails that you're actually sending. You should be able to get a sense of he average number of emails that the majority of your database is receiving within a given time. If your data is telling you that the majority of your database only received 2-3 emails within a three month time period, there may be an opportunity to send relevant content to your database to keep them engaged and maintain the brand awareness that helped get these subscribers in your database to begin with.

Make sure you can easily obtain this type of email frequency information and monitor it regularly. What you don’t want to have happen is create a multitude of automated programs and the realize that a proportion of your database is in fact receiving too much email. For more information on this topic, see: What’s the [Email] Frequency Kenneth?

“We need to cleanse our database first before executing campaigns”

Ok, your database is a bit of a mess and it’s taking time to clean it up. Guess what – you’re always going to have some data issues. Your database will never be perfect. Don’t use that as an excuse to not start on a simple nurturing program to a specific segment ( for example: a specific industry) or creating a welcome program.

In addition, you can even use automated email programs to collect more information regarding your subscribers over time which can help clean up your database. In fact, when you start sending out regular email campaigns, you’ll soon see who in your database truly wants to hear from you based on the digital body language that these subscribers are exhibiting.

Keep this in mind: The more you wait before you execute your campaigns, the more stale your database gets. Don’t let this happen to you. Start thinking about what you can do to increase the number of quality interactions that you can have with your database via email. Break free from email frequaphobia and leave your competition in the dust.

Chad H
@chadhorenfeldt

Photo Credits:

• “Too Many Email”: Bronto
• “FYI” billboard: http://www.leslieleamon.com/images/bad-emails-billboard.jpg
  “I want to believe” http://thepiratesdilemma.com/wp-content/uploads/2008/11/want-to-believe.jpg
• “Dirty Data”: http://www.borthwick.com/weblog/wp-content/uploads/2008/05/dirty_data.jpg

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5 Mistakes B2B Marketers Need to Avoid in 2010

2009 has been a long year but as I reflect back on my many conversations, I've created a top 5 list of items to avoid in 2010:

1. Not having a defined social media strategy

You would be surprised by the number of companies that say “yeah, social media is important but it’s not important to us at the moment”. In 2010 you will not have a choice but to make social media part of your overall marketing strategy. If you’re company is just breaking ground in this area, at the very least make a commitment to listen to what people are saying about you. For example, check out http://addictomatic.com/ and search for your company name. Most likely, you are being mentioned. Now search for your competitors. This may be enough of an impetuous to get moving on a reactive social media strategy such as “monitor what is being said about you and respond where needed to protect our brand”.

Addictomatic is a free tool that will get you started down this path. You may want to look at some of the paid services out there such as Radian6 or Vocus. Once you have this down, you can then start working on a proactive strategy and determine what it will take in your organization to make this possible. If you’re having trouble with this concept, skip down to #4.

2. Not sending relevant and timely messages

If you continue to only send email blasts on a schedule that you dictate to your email subscribers, you risk massive list attrition, damaging your overall email deliverability and a loss of sales and sales opportunities. The key to sending relevant communication is to automate the process. This may mean creating a lead nurturing program for new inquires on your website or using dynamic content in emails that presents a more relevant message. This concept needs to be at the forefront of your planning in 2010. If you have an automated program in place, look at ways that it can be adjusted to get an even higher response.

3. Not having an accurate picture of your database

Did you have an email campaign this year that received a lower than expected response and blamed the creative or the offer on the poor results? It may well have had to do with these items but did you consider looking at the state of your list and/or database? I highly recommend that you query your database to understand how "active" your contacts are. You need to understand the true state of your database so you can make decisions on what you need to do in 2010 to achieve your goals. Knowing how many contacts in your database have bounced and unsubscribed is no longer enough - you need to understand how much "dead wood" you're carrying around.

In addition, your data may need a "face lift" or a complete makeover as it's either inaccurate or out of date. Consider using data tools that are included in your marketing automation system to clean up your data. You can also look at services like Fresh Address (http://biz.freshaddress.com/) that can clean up your email addresses or providers such as ReachForce or MarketOne that can generate leads based on your specific needs.

4. Not taking advantage of your online community

As a marketer, there are thousands of online resources out there that you can take advantage of to improve your marketing skills. You can even get a marketing degree from schools online. However, this is just “half the battle” (why am I having memories of GI Joe cartoons from the 80s?). You need to engage other marketers to really learn and get the most out of the resources that are available and there are online communities that are waiting to be taken advantage of. Here are some things you can do today:

• Search for a LinkedIn Group that interests you and join it. Participate in discussions or start a new one yourself. Not sure which group to join? See which groups your connections have joined or ask them directly.
• Ask and answer questions on LinkedIn. You may see a theme here. There are a lot of experts in your area that are willing to help you so have a look at LinkedIn Answers. To begin, I recommend browsing the Marketing and Sales category and looking for a subcategory that interests you.
  
  
• Join Twitter and look for a Twitter List that includes tweets about areas of marketing that interest you. To get started, use a tool like http://listorious.com/ that lists some of the top lists on Twitter. An easier idea is to look at the list of a tweeter that you admire and follow their list. Here is my Twitter list that I generated that I follow daily. Again, to really engage the community you need to ask questions and respond.

This is just the tip of the iceberg. At my company, I’m an active participant in our customer only community. If you’re lucky to have such a community available to you, take advantage of it. Find out who the people that contribute the most and try and help them out if they need it. They will hopefully help you in return. You may want to look for them on LinkedIn or Twitter and follow some of my recommendations above. I’m a big advocate of Xobni that is a plugin for Outlook. It helps me easily add people to my Twitter and LinkedIn communities – check it out.

5. Not using best practices or acting on lessons learned from past campaigns

While this may be a given, you need to be continuously updating your skills to get the most out of your marketing campaigns. I highly recommend that you subscribe to resources such as the Marketing Insights blog, MarketingSherpa, MarketingExperiments, SiriusDecisions, ClickZ, and MarketingProfs to name just a few of the great resources that I use on a daily basis. This is on top of the number of great articles that my community of LinkedIn and Twitter provide me.


I also recommend testing your campaigns by using A/B and multivariate testing for emails and landing pages. What you may find is that you're going to be creating your own best practices based on what you found successful.


My last point is to accurately track your campaigns so you can easily see why certain campaigns were more successful that others in order to reproduce this success for future campaigns.

Of course, one of your biggest sources of best practices should be the vendors you work with. Part of my daily job is to work with marketers to help them improve their campaigns and make them successful. You too should have access to a live person that can meet with you regularly and that can provide you with advice on what you’re doing right and where you can improve. Make that a priority for 2010 if you can.

I hope you enjoyed these and please let me know if there are additional mistakes that you recommend avoiding in 2010. Happy Holidays from my family to yours!



Chad H
@chadhorenfeldt
”You’re so 2000 and late” courtesy of zazzle.com
”The Battle” image courtesy of Patrick Hester's Blog
”Good Data, Bad Data” courtesy of CounterForce Blog
”Your community Profile” courtesy of www.socialdesire.com

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