Every salesperson wants hot leads that are easy to develop and easy to close. Many companies develop lead scoring formulas to identify leads as “hot” or “not” using the BANT (Budget, Authority, Need and Timeframe) model.
Potential customers accessing your corporate website may volunteer BANT information (like through a signup form), and reliable BANT typically emerges during conversations with the potential customer, after a salesperson has contacted them.
Yet while BANT is useful for opportunities already in the pipeline, vendors must be able to identify hot sales leads based upon 1) publicly available data about the prospect and 2) how well that data matches up to the experience and capability of the sales team.
With that in mind, nine criteria must be weighed when building a lead scoring formula:
1. Target Industry
For any product or service, there is a natural industry or set of industries that are most likely to need, buy and use it. Even if the offering is potentially valuable to any company in any industry, some industries will be at different stages as far as their inclination to adopt new technology or use a certain service.
For example, companies in the software industry were early adopters of email marketing applications. It took several years before the technology was embraced inside more conservative industries, such as automotive and hospitality.
2. Target Size
Large, medium and small companies typically face different challenges. Because of this, some products and services are more attractive to companies in a specific size range and less attractive to companies outside that range.
For example, only large companies have a pressing need to centralize and integrate their Enterprise Resource Planning (ERP). Medium-sized firms are likely to have other priorities, while small businesses have no need whatsoever.
3. Target Job Title
With any product there is also a set of job titles that identify individuals who can and will quickly make a purchasing decision or act as a sponsor if multiple decision-makers are involved.
For example, I recently worked with a sales manager for a product that’s typically sold to corporate comptrollers with the CFO as the final decision-maker. For that product, a sales lead with a CIO title usually proved so difficult to develop that it wasn’t worth the time.
4. Financial Status
Some products and services are more appropriate for companies that are profitable and growing. Other products and services appeal to companies that are losing money and cutting back.
For example, a service that recruits hard-to-find technical talent is likely to be attractive to a profitable company. By contrast, a service that sells excess office real estate is more likely to appeal to a company that’s cutting back.
Some products and services are more likely to sell to companies that are located in a particular part of the country or world.
Sometimes the geographical advantage results from regional development. In Africa, for instance, there’s an infrastructure for cell phones but not for the quick movement of cash. Because of this, a service provided through cell phones is more likely to succeed than one that requires an ATM.
At other times, the geographical advantage is due to the physical location of the vendor’s offices. For example, a company that deployed in New England is unlikely to succeed selling to sales leads in Singapore.
6. Social Network
Nearly everyone in the business world now has a profile on LinkedIn, Facebook or Twitter. The social network of the individuals identified in a sales lead may reveal points of contact that could make it easier to develop the opportunity.
For example, an individual who in the past worked closely with one of your existing customers may be more willing to agree to a sales meeting based upon that fact.
7. Trigger Events
A trigger event is a change in the potential customer’s business that might increase the value of your product or service. Typical examples are:
• The departure of key personnel
• The arrival of new management
• Mergers and acquisitions
• Changes in government regulation
• The acquisition of a new customer
• Lower-than-expected financial results
• The construction of a new facility or factory
For example, suppose you sell management consulting and you get a sales lead inside a company that has just announced a major restructuring. In this case, the sales lead would be “hot” because the company is likely to need outside help with the transition.
8. Access Events
An access event is when a potential customer signals interest by accessing your website, commenting on your blog posts or requesting information, such as a white paper or a newsletter.
The most important thing to know about access events is that their value degrades over time. According to MIT research, a prospect who accesses a seller’s website must be contacted within five minutes, after which the value of the lead rapidly declines.
9. Referral Events
A referral event is when an existing customer recommends a potential customer to you. Research has repeatedly shown that sales leads from referrals are more likely to convert into customers than sales leads from any other source.
For example, suppose the typical decision-maker for your product is a CIO. If the CIO in an existing account emails another CIO suggesting that he or she meet with you, that sales lead is likely to be far more valuable than one generated via cold-calling.
Putting It All Together
Use the nine criteria outlined above to assess the “hotness” of a sales. As you begin to understand your ideal customer profile and close more deals, you’ll see that each variable is not weighted equally. This is a sign that simple “hot” or “not” lead scoring is not sufficient and, it may be time to move to a more advanced lead scoring solution.
If you’re new to lead scoring, start with a handful of variables and expand as you go. Fewer variables will make it easier to tweak your lead scoring formula. Add additional variables one by one as you build confidence in your formula. You’ll be identifying the hot leads in no time and find you’re not wasting time on the deals that always seem to fizzle out.