Lead Rating System

At reader request, here is more detail on lead rating systems. Fair warning: this is a long post.

Before I get into numbers, let’s start with some baseline assumptions:

A prospect is defined as someone who has demonstrated specific interest in your offering, usually by taking some action relative to a marketing program. In other words, they have raised their hand.

In any pool of prospects, roughly 15% are really ready to take action in the near term. We’ll call those sales leads.

Of the balance, about 20% are probably junk, and the other 80% are longer term. Let’s continue to call that longer term group, prospects.

The goal of an integrated sales and marketing program is to:

–         Classify the prospects. This is what the lead rating system does.

–         Assign the sales leads immediately to sales.

–         Develop nurturing programs for prospects to convert them to leads

I have a number of previous posts on this process, here and here and here. Today we’ll focus on the lead rating.

Okay, so how do we classify our prospects?

For just about every product, there are three common questions:

What is the timeframe of purchase?

Does the prospect have a budget?

Does the prospect have purchase authority? (decisionmaker)

These three questions form the basis of a lead rating questionnaire.

In addition to these basic questions, there are additional parameters that help us determine the lead rating. Two important ones are whether the prospect is a present/past customer, and the specific action they took when they indicated interest. Requesting a sales call is usually indicative of greater interest than downloading a brochure. Likewise a returning customer is generally more likely to purchase than a completely new prospect.

Finally, every company will have one or two things that the sales and marketing team believes is absolutely crucial to know for the lead rating.  Personally, I have yet to be convinced that to calculate a lead rating, you really need more than the five variables I listed here first, but it is easy enough to accommodate them in my model, so I do J

Step one is to develop the questionnaire that will surface the necessary answers to calculate the rating. For many of you, it will be a web questionnaire, but it could also be completed at a trade show or by a tele-marketing or tele-sales rep.

You will need to map the answers to the lead ranking model. The lead ranking model is a numerical system, with a maximum score of 100. Here is the basic framework. You MUST tailor it to your situation.

Total points: 100

Timeframe:    25

Action:          25

Budget:         20

Authority:      10

Customer:      10

Custom value: 5

Custom value: 5      

Timeframe scores: You may adjust your Timeframe ranges based on your sales cycle, but the total value must not exceed 25 points. Here is a place to start.

Immediate:    25

1-3 months:   25

3-6 months:   15

6-12 months: 5

> 12 months: 0

Action scores: You will use your actual “actions” here, but the model is:

The most indicative actions get 25 points.

Mid-range actions get 15 points.

Common actions (download a brochure, trade show booth) get 10 points.

Any time you need to calculate a rating with no action, assign 0 points.

Only one action is counted – there are huge implications to this for automated systems like CRM which go way beyond this post. My opinion: if you can get an initial lead ranking done, you will be light years ahead of most companies J

Budget:

Yes:             20

No:               0

“Don’t know”: 10

Don’t know gets points because a lower level person assigned to do research might not know the budget but other factors may push the opportunity up the scale.

Authority: This is the only additive score, with up to 10 points possible

Research alternatives: 0

Perform technical evaluation: 2

Recommend vendor/product: 2

Approve budget: 3

Approve purchase: 3

You can also make this a binary question, Yes/No With purchase authority equal to 10 points and No equal to 0. It really depends on your product and sales cycle.

Customer: 10 points for past/current customer

Custom values: The custom values are allowed a total of 10 points. You can have two at 5 points each or a single one at 10 points. No matter what you choose, I recommend you select binary yes/no questions. Yes equals all the points, No equals zero. You can also add these points back into one of the other variables.

In the end, what you want is a framework that will help you rate your prospects according to your business.

Step Two:

Use the rating framework to assign a ranking to your prospects. Your mileage may vary, and you should develop test cases to validate the ranges, but here is a starting point:

“A” lead: 76-100 points

“B” lead: 51-75 points

“C” prospect: 30-50 points

“D” prospect: 0-29 points

For example, a top A lead with 100 points: has immediate timeframe, budget, is a past/present customer, has purchase authority, scores high on the Action variable and the 2 custom values. Typically, B leads will score low on one of the high-valued variables, C prospects, low on two of the high-valued variables. This reflects the reality that your best leads are ready to buy right now,with immediate timeframe, budget and authority to buy, and the next best group typically is missing something like budget or has a longer timeframe.  And so on.

All the mathematical model does is quantify the reality.

To fine-tune the system to your needs, your sales and marketing team should profile their good leads and prospects against the system to validate the numerical values.

Please DO NOT take this framework as gospel. This is just one way to structure the lead rating framework, and I hope it gives you a good place to start.