WHITE PAPER: LEAD SCORING
When Hot’s Not:
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Lead Scoring for Better Results
For any company with a sales force, the definition of what comprises a “hot” lead is often a much-debated
topic. While the marketing department gleefully tosses to sales everyone who has ever downloaded a
white paper or registered for a Webinar, sales often considers such prospects as unqualified and therefore
unworthy of their time. Or, even worse for the company’s bottom line, they dutifully follow up on each and
every Tom, Dick or Harriett that offers up contact info and end up spinning their wheels, chasing down
people without the budget, authority or even interest to purchase the company’s products or services.
Defining a hot lead can be a struggle. In fact, nearly half of all BtoB marketers (48 percent) tell Forrester
Research that lead quality is a top concern.1 Qualifying leads through a comprehensive lead-scoring
model can alleviate that issue. A formalized process alleviates confusion over what constitutes a qualified
lead. When scoring criteria is developed jointly by marketing and sales, the hand-off is smoother and the
outcome far more likely to be met with success. And with the right approach and the right technology to
implement the program, lead scoring can deliver high ROI with limited effort.
In this white paper, we’ll reveal the power that a comprehensive lead-scoring model can deliver, and help
you understand the key considerations necessary to arrive at an accurate and reliable lead score.
Why Top BtoB Marketers Use Lead Scoring
So many leads. So little sales time.
Leads flood into a marketing organization from all directions and from companies of all sizes. They arrive
from tradeshows, online events, white paper downloads, email campaigns, etc. Some prospects are just
researching; others are in an active buying cycle. Some are decision makers; others are end-users.
One of the biggest challenges companies face is the inability to touch all prospects in a timely manner. So
if a “hot” lead is in the queue, it could take too long for sales to reach it before a competitor whisks it away.
Marketers must figure out how to sort and tend a wide array of potentially valuable leads. Hot leads need
to be identified and passed on to sales while cooler prospects are “warmed.” Otherwise leads—and the
sales opportunities and revenue they represent—can be lost.
Lead scoring is a method of assigning points to different criteria for each lead that flows into your market-
ing organization. It allows you to rank and prioritize your leads and determine the likelihood of each becom-
ing a customer. The score is determined by adding up the points on each of the criteria you have selected.
Based on a lead’s score, it either will be routed to sales or continue to be nurtured by marketing.
By sending sales a list of prospects exhibiting criteria indicating they are ready to buy, sales representa-
tives will be more likely to be able to engage in meaningful conversations with leads, rather than spending
time needlessly chasing down cold opportunities.
A solid lead scoring approach not only helps you to rank prospects against each other, but can smooth the
lead flow and help you build a more powerful and accountable marketing organization based on rigorous
Close the Gap Between Marketing and Sales
Marketing organizations reach and persuade prospects while sales closes deals. Both are crucial to
the success of a business, yet the two groups tend to work apart, lacking strategies, processes and
technologies in common. This split can have devastating consequences for the bottom line.
If you are not already on the same page with your sales organization about what constitutes a “quali-
fied lead,” you need to be. This is the first step to successfully developing a lead-scoring model.
 WHITE PAPER: LEAD SCORING

analysis and testing, rather than intuition and educated guesswork. By tagging individual opportunities with a “propensity to buy” score, better tactical
decisions on handling leads can drive significant improvements in both marketing and sales results.

By assigning lead scores to prospects and monitoring their movement from initial inquiry to close, marketers obtain valuable insights into their own
programs. You can determine, for example, where your best leads come from and what promotional offers are most likely to move leads through the
sales funnel.

Qualities of a Good Lead Scoring Model

By measuring a person’s attributes and behaviors over time, a good lead-scoring methodology can accurately define a person’s level of interest and
whether he or she represents a strong potential opportunity for sales. What’s critical to an effective program is input from sales. The very first thing you
have to do is sit down with sales and determine which attributes a prospect needs to have in order to be considered a hot lead.

Everyone involved with this process should understand that qualities identified when a lead-scoring model is first developed can, and probably will,
change over time. In fact, one of the many benefits of a sophisticated lead-scoring solution is the insight it provides regarding the attributes of your best
customers. The more data you add to the model, the better you’ll be able to understand where your best leads come from, their needs and desires, and
the behavior they exhibit that leads them to show up on the radar of your sales force.

While simple lead scoring can evaluate prospects based on information they provided (i.e., industry, job title, location), more sophisticated, automated
programs monitor prospect activity on Web sites, in response to emails and more. As the lead score of a prospect changes based on behavior, the
changing score can trigger re-routing based on predefined rule sets. Hot leads can be automatically flagged in Salesforce.com or other contact manage-
ment system to alert sales for immediate follow-up. And because it’s an automated process, sophisticated demand management solutions take much of
the resource burden off marketing.

Data Needed for Solid Scoring

The most accurate lead scoring models comprise both explicit and implicit information.

• Explicit scores are based on information provided by or about the prospect – company size, job title, geographic location, etc.
• Implicit scores are derived from monitoring prospect behavior – Web site visits, white paper downloads, email opens and clicks, etc.

Taken together, explicit and implicit factors create a total picture of your prospects that enables you to make an accurate determination of their propen-
sity to buy. Let’s take a closer look at attributes of both levels of data.

Explicit Data
Demographics
DEMOGRAPHIC PITFALLS
The demographics section of a lead-scoring model categorizes individuals based on characteristics of both the
individual as well as the company such as name, occupation, email address, company name, company size, etc.
Demographic and firmagraphic information can be vital to an overall score, particularly as you continue the lead-
scoring process and are able to correlate attributes of leads that generate sales. For example, you might find that
mid-size companies in the Western United States appear to have a greater affinity for your product than those on
the East coast. You could adjust your marketing efforts and lead scoring techniques accordingly.

Although valuable, demographic information can have pitfalls:

INPUT T F
• Self-reported information tends to be aspirational. People give answers they believe are more desirable,
such as overstating the size of their company or their job role. Name x
• Company information tends to roll toward the mean. Prospects at very large companies may downplay Email x
organizational size in an attempt to avoid sales harassment, while those at tiny companies may pad their Company x
numbers in order to be perceived as significant players. Title x
• People sometimes lie. Not everyone will tell the truth on your forms. For reasons ranging from annoyance to Company Size x
secrecy, people reluctant to reveal personal details will enter incorrect information in order to download your
white paper or attend your Webinar. A key attribute of a powerful
lead-scoring model is that you
In order to gather as much accurate information as possible, keep in mind that scoring doesn’t have to take place can grow the data and alter
all at once. A key attribute of a powerful lead-scoring model is that you can grow the data and alter the score over the score over time.
time. (Just be certain that your lead-scoring solution supports the fact that your data will change over time.) By

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 WHITE PAPER: LEAD SCORING

asking for a minimal amount of information in the beginning when someone downloads a white paper or registers for a Webinar, you can increase the
chance that prospects will complete your forms rather than abandon them or enter false information.

You may also want to append third-party information to your database of prospect information. Be certain your lead-management software enables you
to do this. In addition, your lead-scoring program should be flexible enough to allow individuals such as salespeople to add new data and change inac-
curate information as it is uncovered throughout the course of the relationship.

The unreliability of demographic information is one reason why your lead-scoring methodology should not rely on self-declared data alone. A solid lead-
scoring approach should also include data regarding prospect’s values, attitudes and interests.

Psychographic Information

Psychographics is self-declared information designed to indicate how people feel. When input on forms
is accurate and the right questions are asked, responses can signal a lead’s readiness to be passed on
to sales.

Key psychographic information that is necessary to accurately score a lead encompasses the classic
BANT model: does the prospect have the Budget and Authority to purchase your product; do they Need
the product; and how soon is their Timeline for purchase? BANT questions are designed to elicit highly
indicative information. This time-honored methodology has been used for years by sales organizations to
grade sales opportunities and identify appropriate tactics for moving the deal forward.

The pitfall in using BANT data as a heavy influencer of lead score is that obtaining that kind of psycho-
graphic data can sometimes be difficult. Prospects aren’t always ready to “cut to the chase.” They may
want to hang on to their BANT information until they feel they know and trust you.

To overcome this reluctance, marketers should always offer value in exchange for information. For example, a good time to solicit additional information
about a prospect is on the thank-you page after someone has submitted a form for one of your offers. Post-event satisfaction surveys are another good
place to ask for details.

It’s important to remember that a low lead score does not necessarily signify a bad lead. It only signifies that a lead is still unqualified. As you are able to
gather information incrementally over time, low-scoring leads may potentially grow into loyal customers.

To ensure that leads are scored correctly, always ask for information in the same way across multiple points of data-gathering. This guarantees that the
data entering your system is consistent with your scoring parameters. Because this is not always possible (i.e., you receive a mish-mash of job titles
gleaned from business cards gathered at a tradeshow), make sure that your lead management system is flexible enough to be able to match patterns
from third-party data.

Implicit Data
Behavioral Information

Behavioral information comprises the implicit section of your lead score in which you assign points
based on specific actions undertaken by the prospect. When you assign a score to behaviors, choose
only those activities that you believe indicate that a person is highly engaged with you.

Three components that measure engagement should make up your implicit lead score: actions, recency
and frequency. Although most lead scoring models account for actions, few are able to incorporate
frequency and recency evaluations into the scoring model. However, all three components are crucial to
an accurate lead score. Additionally, the ability for scores to automatically change over time is important,
as we’ll see later.

Actions

The first behavioral component is the action itself. Some behaviors will merit a higher score than others. For instance, if someone visits your homepage,
it might not tell you very much, but if that person drills four levels into your Web site to a specific product page, that action might imply a keen interest –
one that warrants a higher score.

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 WHITE PAPER: LEAD SCORING

Here are some high-value behaviors to consider in your lead-scoring model:

Which Web-site Pages Should You Score?
• Forms submitted:
o Update personal information The specific pages people visit on your Web
o Sign up for newsletter site can be a powerful indicator of interest in
o Request demo your products or services. If you offer high-
• Campaign activity: value content on your Web site, you should
o Attended a Webinar add visits to those pages into your lead-
o Visited a tradeshow booth scoring model.
o Downloaded a white paper
A good rule-of-thumb is to select pages with
• Web site activity:
content that is specific to a sub-segment of
o Request demo
your potential customer base. If someone
o View in-depth product page
arrives at such a page, you may take it as a
Recency & Frequency strong indicator of a good lead.

Additionally, top-notch lead scoring models also account for the recency and frequency of the Also consider scoring the pages people are
behavior--how often and how recently a person took an action. By adding these two elements to taken to after completing a form, such as
the evaluation criteria, the model enables scores to go up or down based on prospect behavior. after they’ve requested a white paper or a
product demo. If someone makes it through
This is a critical component of a successful lead management solution. Any good sales rep a process on your Web site, it could mean
knows that the quality of a lead changes both over time and as more or less interaction with the they are interested in hearing from you.
prospect occurs. A lead that comes into the system with an initially promising score but missing
one or two key elements to make it hot needs to be re-scored as actions take place that indicate
the prospect is ready to buy. Similarly, what look like hot leads in the beginning can erode down Rules to Remember
to lukewarm if the initial burst of activity is followed by a lengthy silence. Actions provide a foun-
Decay Recency at 2x Your
dation for your implicit lead score, but in the absence of context, they are one-dimensional. In
Buying Cycle
order to get a true picture of someone’s actions, you must also measure how recently and how
frequently someone has taken an action. Failing to do so can lead to inaccuracies in your scor- How long should it take for a recency score
ing. These inaccuracies can lead to a high number of unqualified prospects being routed to the to reach zero? A good rule of thumb is to set
sales organization before they are ready. An inaccurate implicit score also can result in missed the range at twice the length of your buying
sales opportunities, as prospects that should be qualified go unrecognized. cycle. For example, marketers with a 90-day
buying cycle would set a decay range of
To illustrate the importance of recency and frequency to lead scoring, consider this scenario. You
180 days, so after 180 days someone who
give prospects who take a product demo a lead score of 50 points. So the prospect who took
took a single action with no follow-up would
your demo today and another who took it six months ago would each have a lead score of 50.
no longer be considered a priority for sales
But the person who most recently took the demo is clearly more likely in a more active phase of
attention. Be sure your lead-scoring system
the buying cycle than someone who took a demo six months ago and has had no other activity
has the capability to decay scores over time
since. In another example, without a frequency component to your lead scoring model, a pros-
so you don’t have to manually monitor and
pect has been exploring your Web site a lot this month will receive the same score as another
update scores.
who landed on your site just once.
Measure Frequency for 1x Your
Time yields decaying lead scores
Buying Cycle
Recency metrics to lead scoring are powerful because they add the dimension of time to an
Over what length of time should you measure
implicit score. If a person doesn’t repeat an action within a certain amount of time, points should
the frequency of an action, such as visiting
drop off. Recency points can decay over time until the score reaches zero. If a person repeats an
the Web site, or opening an email? A good-
action, the recency score can be reset and the process begins again.
rule-of-thumb is to measure the frequency of
Decay of point totals also helps keep lead scores under control. Rather than heaping new points a prospect’s interactions over a period of time
on top of old scores when someone repeats an action, a model that takes into account recency that is equal to your buying cycle. Therefore,
will peel off an action’s points over time and reset the score when an action is repeated. if your buying cycle is 180 days long, actions
that took place more than 180 days ago
would be weighted relatively less than more
Properly Weighting Your Lead Scoring Model recent actions.
A combination of explicit and implicit prospect information is the cornerstone of a powerful lead
scoring methodology. No single attribute is effective in isolation. People give inaccurate details,

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 WHITE PAPER: LEAD SCORING

and a prospect’s actions may not indicate what we think it does. Weighting the various areas of demographics, psychographics and behavior against
each other helps to balance lead scores and protect against inaccuracies.

Despite this fact, a survey by SiriusDecisions found that most marketers ignore one or more of these elements in their own lead scoring.2 When mar-
keters were asked which of the three attribute families they were using to score leads, no category received higher than a 41 percent response rate.
Researchers cautioned that this lack of balance can lead to a high number of improperly scored leads and lost opportunities.

How you weight your lead scoring model will depend on your unique business situation. And the manner in which you weight various attributes of pros-
pect data can change over time as your lead scoring program provides insights into the characteristics of a hot lead. So for example, you might begin
by giving more credence to leads from mid-size companies, but over time come to learn that buyers at enterprise-level organizations are more often
purchasers of your products. And, depending on the product or service you’re offering, you might find that your best customers eventually downloaded a
white paper on a particular topic, but few attended a Webinar on a related topic.

Fine-Tuning Enhances Results

Lead scoring is a flexible methodology. As you move through the process and evaluate scores, you may discover that some of your assumptions are
incorrect; for instance, that a high-level technology executive is more apt to buy your product than a technology manager. Being able to fine-tune your
scoring model increases accuracy, results in more qualified leads being sent to sales and more deals being won.

Conclusion
A key attribute of top-performing demand creation marketers is their ability to build processes and systems that effectively track and manage leads.2
In the past, lead scoring systems have required a lot of hands-on maintenance to tend the model, and have been limited in the amount and kinds of
information marketers could use.

Fortunately, powerful tools are now available that streamline and automate the lead scoring process and provide access to all the different com-
ponents of a lead score together in a single platform. Today’s demand generation marketing automation applications enable business-to-business
and other marketers with a complex sales process to develop a complete, dynamic and measurable lead scoring process as part of an overall lead
management system.

If you haven’t implemented an automated lead management program, now is the time. A study issued by analyst firm Gartner found that marketing auto-
mation is one of the fastest-growing CRM investment areas—a trend it expects to continue through 2011. Gartner estimates companies that implement
lead management solutions such as those offered by Vtrenz and others will see as much as a 50 percent increase in lead conversion rates. 3

When you incorporate advanced lead scoring, be sure your marketing automation solution and lead scoring model can:

• Support the frequency and recency aspects of implicit scoring.

• Automatically factor time decay into recency scores, eliminating need for manual intervention.
• Impose point maximums on lead scores to minimize the possibility of inaccurately high totals.
• Allow scores to be updated with third-party information such as data-appends or data entry by your sales force.
• Automatically add new data as it is gathered over time and re-score leads.

A strong lead scoring model helps close the gap between marketing and sales. Not only does the sales team enjoy a flow of better-qualified leads,
marketing is able to monitor the results of its programs and track its successes. Adjustments can be made to the marketing plan to improve the quality
of leads generated, and resources can be better managed accordingly.

In short, with a strong lead-scoring system in place, both sales and marketing will be hot, hot, hot.

Footnotes
1. “B2B Marketing Needs A Makeover – Now,” Forrester Research, Aug. 2006
2. “What’s the Score?” Research Brief, SiriusDecisions
3. “Predicts 2007: A Return to Growth Fuels Marketing Technology Spending,” Gartner, Nov. 2006

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 WHITE PAPER: LEAD SCORING

VTRENZ, A SILVERPOP SOLUTION

Taking Lead Scoring to the Next Level
Good lead or bad lead? Qualified or not qualified? In today’s high involvement, multi-touch sales cycles, businesses can’t waste time chasing down cold
leads or prospects not yet ready to buy. But the less sophisticated, linear-scoring models that merely apply X points for X action fail to provide enough
insight into lead quality. A lead-scoring model needs to be responsive to the demands of today’s business-to-business sales cycle. Marketers need to be
confident that when they route a lead to sales, it is truly qualified.

Vtrenz has heard the call and taken lead scoring to the next level. The Vtrenz Lead Score model empowers marketers to create multi-dimensional,
sophisticated scoring methodologies, all in an easy to-use-table format. With both explicit and implicit scoring capabilities, and incorporating
recency, frequency, and score depreciation, the Vtrenz Lead Score model enables you to create a lead scoring methodology that truly best fits the
needs of your company.

Explicit Scoring
Values that are generally set, such as a job title, industry, and company size.

• BANT: Budget, Authority, Need, and Timeline

• Demographic: e.g., geographic location, company size, revenue, etc.

Implicit (Activity) Scoring

• Recency: Measures the last time a lead/prospect interacted with your
company
• Frequency: Measures how many times a lead/prospect interacted with your
company
• Behavior: Allows you to apply point values toward specific interactions that
your company
deems valuable

By providing a means to score both explicit and implicit activity, the Vtrenz Lead
Score model ensures that your company is able to score on all facets, making your
lead qualification more accurate and effective.

How can the Vtrenz Lead Score model benefit you

and your company?
Achieve Consistency with Database-level Scoring
Scoring is done at the database level. Regardless of how your leads are acquired—through tradeshow attendance, Webinars, survey forms or other
channels—the Vtrenz system allows you to provide a consistent scoring methodology across all leads in your database. Scoring at the database level
removes the frustration and complexity associated with overly-granular scoring programs.

Choose How You Score

The Vtrenz model is flexible, allowing you to score in the manner that best fits your company’s needs. You can choose to score on all levels or only on
certain sections. In addition, the Vtrenz model enables you to select specific behavior interactions, such as submission of a specific survey, submis-
sion of a demo request or inclusion in a specific campaign, and assign point values at a deep targeted level.

Automatically Depreciate Activity Scores

A lead that visited your Web site once 12 months ago indicates a lower level of immediate interest than a lead who visited your Web site three times
in the past two months, so why be forced to apply the same point value to these leads? With the Vtrenz lead score model you don’t have to. It enables
you to set the depreciation amount of a lead’s score based on changes in recency and frequency of interactions, bringing your most interested and best
qualified leads automatically to the top.

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 WHITE PAPER: LEAD SCORING

Protect Against Inflated or Skewed Scores

The Vtrenz Lead Score model helps to protect the integrity of your lead scores from over-inflation or skewing by incorporating point caps into the
model. An over-abundance of behaviors can be policed with a behavior point cap to ensure that someone repeatedly hitting your Web site for research
purposes does not end up in your sales representative’s call queue.

Gain Company Consensus on Your Lead Scoring Methodology

By supplying your lead scoring configurations in a table-like model, Vtrenz has made lead scoring easy to digest and understand at-a-glance. This allows
you to bridge departmental divides and share your lead-scoring model with key internal company stakeholders such as sales and executive management
in order to gain company-wide consensus on your lead scoring model.

Provide Sales with a View into Lead Qualification

Through your integration with a CRM solution, Vtrenz provides sales with a clear view into a lead’s total, global lead score as well as scores by section.

To find out more about Vtrenz and how it can benefit your company, please contact your Vtrenz sales representative,

or call us toll free at 1-877-484-7704

Visit us at www.vtrenz.com

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