Lead Scoring vs. Lead Grading: Which Suits B2B Best?
Sales teams employ multiple strategies to target leads and improve their lead-generation efforts effectively. Two methodologies are gaining significant prominence in this: lead scoring and lead grading.
Both of these strategies are designed to help you identify trends and patterns among qualified leads. They allow you to decide the optimal moment for initiating sales communication. By implementing these approaches, sales reps can gain a more accurate understanding of lead quality. This, in turn, will significantly enhance their sales strategies and help them advance a lead from initial touchpoint to sales-qualified status, successfully improving their sales cycle.
However, the most common mistake many businesses make is using lead scoring and lead grading incorrectly or interchangeably. Understanding the difference between these two vital strategies is necessary to ensure you don't end up making the same mistake. So, let's get started with that.
What is Lead Scoring?
Lead scoring is a strategic approach employed by companies to evaluate and prioritize leads according to their level of involvement and probability of conversion into paying users.
Lead scoring includes assigning numerical values to various actions and behaviors demonstrated by leads, including but not limited to pricing page visits, integration page visits, email interactions, social media engagement, and additional factors. Each action has a specific score associated with it. For example, signing up for a newsletter might be only 10 points. Alternatively, visiting the pricing page might be worth 20 points as it indicates a high level of interest. It all depends on the business’s scoring strategy and the metrics they want to prioritize.
Lead scoring models prioritize leads based on their cumulative scores. The higher the score, the more likely a lead is to convert.
Marketing teams can allocate resources effectively by categorizing leads according to their scores. Leads with high scores are ready to receive personalized content, marketing campaigns, and sales-driven interactions. On the other hand, leads with low scores require more lead nurturing efforts. They can be educated with tailored content to guide them through the sales funnel.
A lead scoring system focuses on finding our "sales-ready" and marketing-qualified leads (MQL). The process seeks to answer the question: How engaged is this lead with our content, and how likely are they to purchase? In short, lead scoring is quantitative in nature and aims to quantify a lead's interactions and behaviors.
What is Lead Grading?
B2B Lead grading evaluates how well a lead fits your company's ideal customer profile. It categorizes leads using qualitative labels like "A," "B," "C," and so on. This categorization is determined by job title, company size, industry, and other characteristics of your target market. So, the main goal of lead grading is to assess the quality and alignment of potential customers by considering their demographic and firmographic attributes.
Unlike the lead scoring process, lead grading focuses on determining whether the lead fits your company's products and services. It aims to answer the question: Does this lead match our ideal buyer persona?
Best leads or leads with a high grade closely align with your ideal customer profile (ICP). Lead grading is a qualitative process, and it enables the identification of leads that may not have high engagement scores but have a higher potential of becoming valuable long-term users.
Lead Scoring vs. Lead Grading
After discussing the basics of predictive lead scoring and lead grading, it is pretty clear lead scoring is based on online behaviors and specific actions of your prospects. Alternatively, lead grading involves assessing the demographic data of the leads.
Lead scoring utilizes a data-driven method and scoring criteria to assess a lead's purchase readiness. On the other hand, lead grading takes a holistic view of a lead's characteristics and evaluates the extent to which they align with your organization's ideal customer profile.
Imagine a situation where a lead exhibits high engagement and has a high lead score but receives a lower grade due to a lack of alignment with your target audience. Without the implementation of a lead grading model, there is a risk of pursuing this lead vigorously, despite their limited potential to become loyal users. Similarly, relying solely on lead grading without considering their level of engagement (or lead scores) may result in overlooking a highly interested lead who needs just a bit more nurturing to convert.
So, by integrating these methodologies, sales teams can effectively identify high-value leads who are highly engaged and closely aligned with their business objectives. This synchronization optimizes your sales process, ensuring valuable resources are allocated to leads that are not only actively involved but also more likely to convert.
But before you start combining both of these strategies, it is essential to understand the vital lead-score-to-lead-grade relationships. Let's have a look at them:
1. High score and low grade
This is a scenario where a lead has demonstrated high engagement with a company's content, resulting in a higher score. For example, they might have clicked on numerous emails, downloaded a whitepaper, interacted with various social media posts, and made multiple pricing page visits. However, when examined closely against the company's ideal customer profile, it becomes evident the lead does not fit the desired characteristics and perhaps was just a job-candidate. So it gets a low grade.
In most cases, forwarding these leads to the sales team for further follow-up is not practical.
2. Low score and high grade
Here, the lead's engagement with the company has been minimal - potentially limited to a single visit to the company's website and subscribing to a newsletter. They have a low score, but upon careful evaluation of the lead's characteristics, it becomes clear that they perfectly align with the company's ideal customer profile.
Such leads should be continuously nurtured to increase their lead score. Salespeople should focus on educating these prospects about products so they are primed to make a purchase.
3. High score and high grade
This is exactly what sales dreams are made of. Here, the lead exhibits considerable engagement with the company's content and closely matches the ideal customer profile as well. Their interactions include downloads, webinar attendance, and organic sign-ups for the product’s demo.
You must send all the information about these leads to your sales team so that they can reach out to them immediately.
4. Low score and low grade
In this scenario, the lead has had limited, or no interactions with the company, and their characteristics do not align with the ideal customer profile. Their job title and industry significantly differ from the company's target audience.
These leads are unqualified, and deleting them from your CRM is advisable.
Start Implementing Lead Scoring and Lead Grading Strategies Today
It is important to understand that lead scoring and lead grading are two essential pillars of your B2B lead acquisition strategy. They work together to support your pursuit of high-quality leads.
Companies should use lead scoring to determine engagement readiness and employ lead grading to ensure alignment with their ideal customer profile. By integrating these powerful strategies, you will be well-prepared to navigate the dynamic sales landscape and convert leads into loyal users.