The Importance of Sales Lead Scoring
Today's Sales Prospecting Perspectives post is from Chris Lang, AG's Sales Director.
Have you ever seen some of the formulas used to determine the level of quality on a marketing qualified lead (MQL)? Some are amazingly complex. Other than the numbers that were crunched to create the Large Hadron Collider (particle accelerator used to smash sub atomic particles together and find different particles we never knew about as well as the true meaning of the song "Bird is the Word"), there is nothing more complicated than MQL scoring. It has something to do with the number of times someone hits the website, crossed with the day of the week, add 5 if they opted in for the white paper and then give them a certain number of points depending on the flavor of popsicle they like. Marketing tracks behavioral patterns, opt ins, web hits, shoe size, everything! They are kind of like the CIA when you think about it.
Inside Rep: Hi is this John Doe?
John Doe: Yes this is. What is the purpose of your call?
Inside Rep: This is Chris Lang from AG Salesworks, we do (insert elevator pitch). I see that you have opened my white paper 8 times, you are a VP marketing, you have clicked through 32 pages on our site, there is a new position open for qualification reps, you like rainy days and according to the bumper sticker on your car you would "rather be fishing". I thought it might be a good time to call you.
John Doe: wow you certainly did you homework, I guess I can give you a couple minutes, how did you find out all of this?
Inside Rep: I'm in marketing sir; I know things about a lot of people. By the way, stop using so much garlic in your pesto sauce. It's giving your wife an upset stomach.
Marketing goes all out to track their campaigns and prove effectiveness. Some sales teams however....not so much. Sure we track what we close, because those are the only numbers that we find important. But, we should be able to track and put a value on all sales leads from the initial discussion all the way to close. It is the best way to find out where things are dropping off in your funnel, where you have the most wins, how you fare in competitive situations and how effective marketing is in delivering quality leads.
Sales executives aren't always the best at putting a probability to close on their leads. Often times when a sales rep is asked to report on the quality of lead he/she will use a simple "Stunk" or "Pretty Good" as a response. Sometimes this is to protect themselves and pad their numbers and other times the sales person simply doesn't know how good the lead is yet. No one wants to say they got a lot of great leads, but didn't close much business, so they wait to forecast them until they absolutely know what is going to happen. This leads to a large gap of unpredictable sales pipeline as leads essentially go stealth for months until they suddenly pop up on forecast in "Proposal Stage". This is counter to what my sales and marketing VP's want to know as they look for the closing probability of every opportunity that comes in our door.
My marketing VP doesn't like it when he asks for my report on lead effectiveness and I hand him a napkin with "A couple stunk, most were pretty good, a few are nurture accounts and one was a real jerk". He found it tough to quantify this in his marketing ROI spreadsheets. Similarly, my sales VP used to get a bit testy when I told him that we could close anywhere from 1 million in net new business to about 300 billion by quarter end. Tough for operations to predict the future work loads with a forecast like that.
With these issues in mind, we came up with a system here to value sales leads after the initial call. It's not nearly as complex as the MQL system because NASA hasn't returned my calls for help, but it allows me to see the likelihood of a deal closing after one call and gives the marketing team a great view of what campaigns are going to yield the most revenue. It runs off of a 100 point scale with a certain number of points given to an opportunity based on factors such as: pains and needs, prospect's ability to make a decision and sign the check, whether it is an active initiative or not, what factors could blow the deal up, what the timeframe for purchase is and what other options the prospect could use rather than us. After each call, as rep has to re-grade the prospect based on any new information they find out. If all of a sudden they find out the prospect is not the decision maker, the lead score drops. If they hear that the timeline to purchase has moved up, the lead score would increase.
In the end, I can tell what the probability is on a deal closing from start to finish. When you combine this with the efforts of marketing to track leads in the initial stages, we are able to look at each lead, find out where it came from, how long it was in marketing, why and when sales actively pursued it, what the chances of it closing are and if it doesn't close why. We are also able to accurately predict our new revenue from quarter to quarter, see where deals drop off of forecast and we know what behaviors lead to wins on the sales side.
There is always going to be an unpredictable side to sales as long as we sell to people. Prospects change their minds for so many reasons we can't keep track of them. That being said, there is also a very predictable side to sales that says prospects following certain patterns have a higher likelihood of closing. Sales should take a page from some of the better marketing teams out there, learn how to track these behaviors and link them to close rates. It is much more effective than using napkins.