Best Practices for B2B Lead Grading

There is no doubt that a solid lead grading system helps accelerate B2B revenues. It keeps the sales team focused on the best prospects, while helping marketing boost ROI via systematic cultivation of the lower quality leads requiring ongoing nurturing. Below are ten tips to help you implement and get the most out of your lead grading schema.

1. Get Sales Input and Agreement

Marketing and sales need to be on the same page, so first and foremost, get input from sales on the lead grading schema. Be sure to gather input form all levels of the sales team that work with the lead – not just upper management or one member responsible for sales operations. Consensus building is key, and is your best protection against a failed lead grading schema. When setting up your lead grading schema, identify all the data to be collected over the entire sales cycle. Account for cross-sell opportunities. Sales should then prioritize the collection of data with an emphasis on building “actionable” vs. “complete” profiles. Marketing should then incorporate that priority into the multi-touch communication / cultivation strategy.

Sales should define when leads meeting certain criteria are worthy of diverting their attention away from existing opportunities. When implementing a lead grading schema, this typically results in fewer, but better quality, leads being delivered. Volume tends to improve over time, as marketing allocates more budget to the sources driving the higher percentages of leads that meet sales’ criteria.

2. Agree On The Follow-Up Process And Measure It

Without gaining quantifiable feedback on the quality of leads delivered to sales, a lead grading system quickly gets described as, “We tried that once...” Sales needs to define how they will act on leads delivered to them. The follow-up action could be as simple as collecting more information within a defined period of time. Sales should also have the ability to reject leads that appear to meet the defined criteria for delivery, but for some reason are still not a fit. If for instance, only “A” and “B” quality leads are to be delivered to sales, ensure the application managing the delivery also has a mechanism for providing feedback on the true quality of the lead. The process for providing feedback on true lead quality should be measurable and easy. Consider a solution that gives the sales rep an “Accept” or “Reject” option that identifies the reasons for rejecting a lead. If you run into a situation where more than 10% of “A” quality or 25% of “B” quality leads are being rejected, you’ll at least know why, before tightening up the criteria.

Ideally, your CRM system is synched with a marketing automation engine that gives marketers unique insight into sales follow-up productivity at the rep level. If this is not the case, evaluate a demand generation vendor capable of giving you this critical insight. Trying to develop these types of reports within the confines of a CRM system is just not productive.

3. Manage Lead Grading In Your Automated Lead Cultivation Engine

Automated demand generation and systematic lead cultivation is managed by your marketing automation engine – not your CRM system. The CRM system should of course be capable of maintaining profiles and grades, even reporting on them to some extent, but it is the lead grading engine that triggers rules-based notifications and systematic cultivation. Therefore, you need to work with an application deeply rooted in lead grading scenarios and best practices. The combination of a robust solution and a consulting team experienced in rules based-cultivation helps you distill what can be a complex undertaking into a streamlined and elegant solution.

Anything more than 5 levels of grading tends to confuse sales teams so an A through F grading works well. A zero to 100 points schema is fine, but should be converted to an A through F grade to keep things easy to understand. There are too many nuances to developing a solid lead scoring system. Choose a vendor that works with you to apply best practices as part of their support model or hire a consultant. Taking six to twelve months to figure out your optimal lead grading system is simply not an option.

With an A through F schema in place, it’s easy to apply systematic cultivation rules, trigger notifications on various actions, disseminate leads to partners or synch leads with the CRM system. Publish and make sure everyone in marketing and sales knows what processes are applied to each level of lead grading.

4. Support Fluid Grading

B2B sales cycles tend to be quite long, especially when selling complex products or services. As such, best practices suggest marketing collect increments of data on each profile over multiple touch points. If at some point in the marketing cultivation process, the data collected meets sales’ criteria, a notification email may be triggered and/or the lead is synched with the CRM system. As additional data is collected, the quality of the lead grade may improve or decline. It is quite common for “A” and “B” quality leads to drop down to “C” quality leads. In such instances, sales may no longer wish to be notified of activity such as website visits or responses to emails. Without a solution capable of supporting a fluid grading system, sales’ perception of lead quality deteriorates and reports such as the number of “A” leads delivered to a particular sales rep over time can quickly become skewed.

Scheduled marketing activities and rules-based cultivation are also impacted by fluctuating lead grades. The bottom line: Make sure your lead grading application supports “fluid” grading across multiple product lines, regions, and lead generation scenarios.

5. Apply Weighting To Key Lead Qualification Questions

Each answer to a qualification question that impacts grading should be scored. The combination of scored questions should be averaged into a profile score for a prospect that translates into an “A” through “F” grade. In instances where one or a few qualifications are particularly important, weighting should be applied. Again, it is important to get sales’ agreement on this. For instance, just because a prospect requests a demo, does not necessarily mean the prospect should be graded an “A” lead. That request for a demo can of course impact the lead grade a little, but triggering an instant notification to the appropriate sales rep is probably a wiser choice than immediately grading the lead an “A.” Additional data collected by sales rep leading up to, and after, the demo might be a better indicator of true lead quality. Once weighting is applied, simulate the capture of many different profiles to ensure your lead grading schema is not drastically skewed.

6. Activity Should Impact Triggers – Not the Grade

Assigning a lead grade based on activity is mistake. What if a student is researching your company for a term paper, or a competitor keeps checking the website? That activity alone should not improve lead quality. Instead, your marketing automation solution should trigger a notification to the appropriate sales rep. He or she can then determine the appropriate action to take. Likewise, you should be able to apply a systematic cultivation rule to that activity such a triggering an email. The last thing you want is sales complaining about a bunch of click-happy “investigators” being graded “A.” You also don’t want management questioning the validity of your metrics when a flurry of activity from low quality leads can skew the grading. Make sure your solution is capable of triggering “instant” vs. delayed notifications and that you can flexibly determine which actions, or combination of actions, should result in a rules-based trigger.

7. Determine & Measure Marketing Actions on Each Grade

Segmenting communications by lead quality can significantly improve marketing ROI. A simple example of this is sending postcards to “C” level prospects, slightly more expensive letters to “B” prospects, and dimensional mailers to “A” prospects. Frequency of communications can also be driven by lead quality, but having that be primarily driven by recorded activities tends to generate better returns and accelerate sales cycles. For example, you may consider triggering an email to “C” quality leads (that have not yet been delivered to sales) after more than 20 pages on your website have been visited in a 48 hour period. Whichever automated cultivation scenario you choose, make sure your marketing automation application is capable of supporting ongoing adjustments as needed. Working with a solution capable of blending marketing actions on grades and activity is important, but working with a consultative partner rooted in best practices really opens the door to optimized lead generation ROI.

8. Adjust the Marketing Budget Based on Lead Quality

Over time, the grading schema should clearly guide marketers to the best performing lead sources. Your automated demand generation application should give you detailed metrics, broken down by lead quality on the performance of things such as list, creative, and offer. For instance, when using Google or other keyword advertising, you’ll want to allocate more budget to the keywords generating a higher percentage of “A” and “B” quality leads – not the keywords generating the highest click through and capture rates. This is another example of how grade-based metrics helps boost marketing ROI.

With grade-based metrics tightly interwoven into your reporting platform, you may also decide to reallocate budget based on the distribution of lead quality across regions or reps. Knowing that a few reps may be getting a disproportionate level of “A” and “B” grade leads is valuable in many aspects.

9. Account for Exceptions to the Grading Schema

A lead grading schema is built upon assumptions – especially when first implemented. 
Exceptions to the grading schema will be encountered – that’s guaranteed. Unless a required adjustment is obvious, and unanimously agreed upon by sales, resist making adjustments when you first encounter potential conflicts. Instead, wait to see how often this occurs. Let enough data be collected to validate a change. Too many changes to a grading schema in a short period of time will only confuse the sales team.

To account for the occasional exceptions, you must enable grades to be manually adjusted by either sales or marketing. Define and enforce the responsibilities for this to mitigate a situation where too many records in your prospecting engine are incorrectly graded. For instance, if a prospect from a target company that is clearly doing over a billion dollars in annual revenue, indicates annual revenue is less than $1 million, the record should be updated. When your CRM system is bi-directionally synched with your marketing automation engine, the responsibility for updating records should lie with the sales rep to which the lead is assigned to. When CRM synching is initiated based on a grade, marketing should periodically review sets of graded records that are not yet worthy of synching with the CRM system to see if any records are incorrectly graded based on prospect-provided data.

10. Periodically Validate / Adjust

When you report the breakdown of leads delivered each quarter, sales needs to be in agreement. During the first year of a grading schema, commit to revisiting the schema on a quarterly basis. Thereafter, assuming there are no changes to the type of data being collected, this can be done on a bi-annual basis. Again, make sure you get input from all levels of sales responsible for working the leads. Any adjustments need to be published and readily available so everyone in sales and marketing knows the definition of “A” through “F” graded leads and what processes are being applied to each lead type.

The lead grading schema that you apply to your lead cultivation engine is like a tune-up that you apply to a any engine. Periodic adjustments are necessary to maintaining optimal performance. A solid lead grading system is one of the best steps to bridging the gap between marketing and sales.

About LeadGenesys

LeadGenesys optimizes the top of the B2B sales funnel where 9 out of 10 leads are typically discarded. The web-based solution complements SFA/CRM systems with automated, rules-based lead cultivation. Companies including AMD, Fairchild Semiconductor, Computer Associates, Anritsu, and Zebra Technologies shorten sales cycles with custom lead grading, rules-based triggers, notifications, and dissemination of qualified leads into the SFA/CRM system. Marketing ROI is continuously enhanced via real-time metrics on lead quality and unique insight into lead cultivation productivity. Best practices are blended with systematic lead cultivation and applied to each client’s lead management scenario to boost sales efficiency, data accuracy, and truly accountable revenue. For more information, contact us at 415-392-0333 or visit our website at www.LeadGenesys.com/QuickTour