CRM Learning Series : Lead Scoring
We left the last article with the question “Which lead parameters matter to you?” Yes. There are always a huge number of leads you can easily acquire through so many ways. But how do you ensure you focus on the important leads first ; or rather, focus your time and energies on the leads that have higher probability of conversion? This is where the concept called ‘lead scoring’ helps.
Let’s get into more details on what ‘Lead Scoring’ means. It’s the technique by which you determine how important a lead is to you. You simply attach a ‘score’ to the lead based on some parameters. Let’s consider an example to understand this better. Say you own a Windows laptop sale business. Let’s say your sales is mostly fueled by college students. So we could say that college students weigh higher in your list of leads. Let’s safely say that you could list out the following “lead parameters” as being very important to you in determining if the lead has a higher probability of conversion :
Age group : 16 to 25 years of age
Education : High school or college (undergoing)
Maybe you give a 70% weight to ‘age group’ parameter and 30% weightage to ‘education’. So your Lead Score can be calculated as:
Lead Score =
(0.7 * ( 1 if the lead’s age group >=16 && <= 25yrs ))
+
(0.3 * ( 1 if the lead is in high school or college ))
This is a really simple Lead Score calculation formula. I have intentionally kept it so, for the sake of those trying to understand this concept for the first time. However, Lead Score can also be made more granular and fine-grained. For example, in the above scenario, we could refine the Lead Score formula to give different weightage to different age group, rather than a strict yes/no. Then it would look something like this:
Lead Score =
( 0.7 *
( 1 if the lead’s age group >=16 && <= 25yrs )
( 0.50 if the lead’s age group >=11 && <= 15yrs ) // which means that they are soon going to high school
( 0.25 if the lead’s age group >=11 && <= 15yrs ) // which means that they are soon going to high school
)
+
( 0.3 *
( 1 if the lead is in high school or college )
( 0.5 if the lead is enrolling for high school )
( 0.25 if the lead is planning to goto college )
)
Now, we have fine-tuned it a little bit. This can be further tuned to include the detail on what is the average income range of the family (which indicates their spending power), and also, parameters like whether the child is interested in computer-related courses, or maybe interested in gadgets.
The key to doing this exercise of Lead Scoring is that it lets you focus on those leads who have high probability of conversion and spend more time following-up with them. Hope this was useful. Try doing this for your own business. Come up with questions and leave them in the Comments section or write to me, and I’ll help you out.
