Predictive lead scoring can identify the leads that will place the greatest value on your solution – and pay the highest price.
Value, the difference between the benefit that a customer receives and the total cost to achieve that benefit, is central to solution marketing. But value is also closely tied to lead scoring as well, with major implications for your company’s revenue and profitability. As I recently wrote in SearchCRM,
A lead score predicts the likelihood that a given lead will ultimately convert into a closed deal. The higher the score, the more likely that a lead will turn into a sale. The score may incorporate predictors such as the lead’s current challenges and technologies, the presence of an active and budgeted project, selected demographic/firmographic data, and even frequency of activity.
Companies use lead scoring to determine which leads should be sent from marketing to sales, and/or to prioritize the best leads for sales follow up. Lead prioritization is especially important today since content marketing can swell the new leads at the top of the funnel, which must be prioritized so sales reps can make the best use of their time.
Predicting a 20% increase in average selling price (ASP)
Not only does a high lead score predict that the prospect will purchase a product. A high score also can predict that the customer will actually pay more for a product. As I was writing another article on predictive lead scoring for SearchCRM, Brian Kardon, CMO of Lattice Engines, shared an unexpected finding from Lattice’s research. They found that companies using predictive lead scoring saw average deal size increase by about 20%. Kardon believes that this could be driven by high lead score customers being more “desperate” to purchase the solution (i.e., they believe that they will achieve a greater benefit and therefore they have greater urgency than others), and therefore less price-sensitive. Conversely, low lead score prospects are less likely to be interested, increasing the likelihood that they will push back on price and request a discount. Since predictive lead scoring helps the company to identify and focus on the most likely high spenders, the company’s prospect mix will tilt toward those prospects, which in turn leads to a higher average deal size.
What drives need for a solution?
So the more the prospect needs the solution, the more they should be willing to pay for it. So what drives need? Especially for enterprise solutions, a B2B buyer’s needs are driven heavily by the desire to resolve an important business problem. How important that problem is, and the degree to which your solution can solve that problem, will depend on the prospect’s characteristics (many of which are identified via lead scoring) and the use case (how they will use the solution), among other factors. So the more you know about the prospect and the use case, the more effectively you can prioritize good leads vs. bad leads and tailor your solution and pricing accordingly.
Predictive lead scoring engines analyze thousands of characteristics. But here are a few basic characteristics that may affect need:
- Business problem being solved (e.g., declining revenue, rising expenses, compliance)
- Operational problem being solved (e.g., lengthening cycle times, deceasing throughput, poor customer service, weak security)
- Use case (g., archiving documents, plant CAD/CAM drawings etc)
- Industry market segment (e.g., manufacturing, telecom, financial services etc).
- Business function or department (e.g., accounting, production, engineering, marketing, customer service, sales) of the user and/or buyer
- Buyer title and seniority
- Company firmographics such as revenue, number of employees, company age, whether company is public/privately held, in the public sector, is an NGO
The more you know about the prospect and their challenges, the better able you are to provide the right solution that delivers the right value to the customer.
- The Solution Marketing Blog – The Value of Value (a great introduction)
- The Solution Marketing Blog: Fixing the Mix
- The Solution Marketing Blog: Other posts on value
- SearchCRM: Are Marketing Automation Tools the Greatest Asset in the Sales Arsenal?
- SearchCRM: If You Need to close More Deals, Consider Predictive Lead Scoring
- Lattice Engines