Tuesday, April 27, 2010
Crawl, Walk, Run: Everything B2C Orgs Need For Lead Scoring
By Chris McArdle, Executive Director of Interactive Markets, TARGUSinfo
The proliferation of emerging media channels such as mobile and social networks, combined with tight marketing budgets, means that campaign dollars cannot just work harder, they must work smarter as well.
Despite these pressures, fewer than 10% of B2C organizations are using proven techniques to effectively identify and target prospects, according to a recent study from ResearchCorp.
Companies that utilize real-time lead scoring data wisely can pinpoint prospects more effectively and thus dramatically improve conversion rates and lifetime customer values.
“Most organizations try to measure their sales funnel by using spreadsheets,” says Ian Michiels, director of enterprise marketing practice at MarketSphere Consulting. “But that approach has several flaws. For starters, the data is stagnant and the spreadsheets are not intuitive. By contrast, real-time lead scoring systems provide decision-makers with heightened visibility into who their top prospects are and how to tailor marketing campaigns for them.”
It’s critical for people to understand that a lead score in a vacuum is almost meaningless. Understanding what makes up a lead score is far more important than the score itself could ever be.
That begins with gathering and analyzing demographic and psychographic data about customers and prospects, including information about their lifestyle, interests, attitudes and values. It’s only after obtaining this information that companies can develop a complete profile of their ideal customers and then craft personalized, targeted messages for them.
Start by Crawling
One of the biggest misconceptions that neophytes have about lead scoring is that it is too complex to implement in their businesses. In practice, it is not complicated at all. Think of it as a logical lens that can be used to more closely examine a consumer’s potential.
When done properly, lead scoring is extremely efficient. It does not entail any sales agent training, it requires minimal IT involvement and there is no script writing needed. The initial stage of lead scoring implementation — the “crawl” phase — includes the prioritization of leads within the call queue and for follow up. During this stage, companies can also optimize lead sources and media channels.
During these initial phases of lead scoring, it is important for marketers to focus on prioritizing their leads. Lead scoring enables organizations to identify which leads represent their best opportunities by looking at a prospect’s likelihood to purchase.
One of the key advantages of lead scoring is how it enables organizations to push their best prospects to the front of the call queue. By prioritizing leads, top inbound prospects spend less time in the call queue. That results in lower call abandonment and a better customer experience.
Learning to Walk
Once marketers have mastered the basics of lead scoring — have seen improved results from profits and revenues, and gained organizational buy-in — they are ready to utilize more advanced techniques in the “walk” stage. This includes the ability to determine which leads should be routed to specific sales agents. At this stage, practitioners can also customize lead nurturing communications based on a prospect’s potential value.
By having a more comprehensive understanding of a prospect’s attributes and propensities, marketers can match leads to the sales agents with the most appropriate skill level or product knowledge.
In the contact center, it is best to route top prospects to in-house or dedicated sales agents who have the highest conversion rates. Marketers can then direct lower-ranked leads to an IVR, non-dedicated agents, or outsourced agents.
History has shown that some leads tend to convert well regardless of which sales agent they talk to. It doesn’t make sense to route leads to top agents if they are just as likely to convert with a less-experienced agent. To help make those kinds of determinations, marketers can develop lead scoring models that match customers’ preferences, allowing less-experienced agents to handle the leads that will purchase anyway. This helps generate higher conversion rates, especially within a company’s most profitable customer segments.
It can also result in more cost-effective marketing campaigns. For instance, Liberty University was able to save $150,000 a year on its marketing costs by using less intensive tactics for those prospects less likely to convert.
Tailoring lead nurturing to each lead segment can also increase conversion rates. For example, marketers may choose to send top prospects a direct mailer with a DVD. Meanwhile, lower-priority prospects could be contacted by email.
Customizing messaging for an offer based on a lead’s preferences can further boosts results. Custom communications can also help to increase customer lifetime values by having more relevant discussions with prospects as well as improve the customer experience.
Ready to Run
Organizations that have achieved repeat success with lead prioritization and message customization are ready to employ more advanced techniques. These include customized scripts, product offers, cross-selling/up-selling and pricing all on the fly.
One approach is to use lead scores for screen pops with tailored messages that sales agents can present to prospects based on the offer that is most likely to close the deal. Prospects who feel they’ve been catered to are also more likely to return as repeat customers; better experience equals better results.
Sophisticated lead scoring professionals have also learned how to take what they know about their best leads and use that information to find more leads just like them. This includes scoring prospect lists to tailor acquisition strategies around your best prospects, or driving conversion associated with win-back and cross-sell campaigns within your existing customer database. Lead scoring also allows for targeting your best prospects online.
To help boost lead quality, advanced practitioners use online cookies — accessible via ad agencies and ad networks — to locate prospects that match the profile of their best-scoring leads via display advertising. Organizations that have reached this level are able to improve the relevancy of online ads by fine-tuning the messages aimed at top prospects based on the known attributes of similar prospects who converted.
Fine-tuned online campaigns tend to result in higher sales due to increased click-throughs and higher conversion rates, particularly in more profitable segments.
There are several levels of maturity when it comes to lead scoring with ever-greater scaling benefits. But like the timeworn proverb, you have to crawl before you can walk…and certainly run.
Chris McArdle is the executive director of Interactive Markets at TARGUSinfo. Follow Chris on Twitter at @CjMcArdle