Imagine you own a company that sells a type of software to different business organizations. You have a business organization, what for? For-profits, right?

Remember, no leads, no profits? If you don’t remember, go to our lead management article, you will get to know its importance.

If you don’t know which lead is qualified enough to become a prospect or qualified enough for you and your sales team to invest the time on it, how will you make business? You will make business, but you will have to invest a lot of time in it. 

This is when lead scoring becomes handy. 

If you score your leads or give them simple tags like “hot’’, “warm’’ and “cold’’, you can clearly sort the numerous leads to know which leads to prioritize. 

Hence, Focusing on the leads that have the highest chances of generating business will ensure that you continue to meet your sales targets with lower efforts and faster.

In this article, I will tell you more about lead scoring.

What is lead scoring?


It is a system or a methodology of assigning a rank to the leads according to the chances of the customer’s will and readiness for buying your product and services.

Leads are scored on the grounds of the customer’s interest in buying your products or services, their current position in the buying cycle and whether they have the potential to buy your product or not.

A good Lead scoring system also uses information from the individual users, information like:

  1. Who is looking at the pricing page – showing a strong buying intent
  2. Which individual is there just to read and learn
  3. Who is reviewing your products and service

There is a specific guideline for any business organization to score leads, like assigning points, implementing rankings such as A, B, C, D or using different terms such as ‘hot’, ‘warm’, or ‘cold’. 

A well-designed lead scoring system will help your organization in understanding whether prospects need to be tracked for sales or to be persuaded with Lead nurturing.

The best of the best lead scoring systems generally use two factors for ranking the leads:

Fit or explicit factors

This is the information we know about the prospects which help us determine if they are ideal decision-makers or not. 

Information like their job title, company, industry and revenues they generate.

Engagement or implicit factors:

These are the factors for scoring based on observations or inferred behaviors and interests of leads, such as, what web they visited and what content they are downloading.

Let us understand this better through an example.

Imagine four leads come in through different sources, how will you know that all of them are there to buy? By their buying behavior.

Let us label all four of them as A, B, C, and D.

A: Comes in through your landing page, fills the form, requests a free trial of your software. This shows he is interested and wants to move ahead.

B: Comes in through promotional emails of your company, subscribes for offer alerts and more emails and leaves. This shows he is not interested right now, but maybe he will be in the future.

C: Comes in through some paid advertisements for your company, goes to different pages of your website.

Reads some blogs but do nothing which shows he is might not be in the market to buy your product immediately.

D: Comes in through one of your blogs he found, fills the query form and contacts your sales team. This shows he is interested but wants to know more about your product.

Therefore by the behavior of the leads you know under which rank you have to put them.

A will be ranked under the prospects who need to be tracked because they have the potential and the will to convert. So you can assign them under “hot’’ leads.

B and D will be ranked under leads who need lead nurturing, you can assign them under ‘’warm’’ leads.

C  will be ranked under the term ‘’cold’’ leads. You do not have to invest your time in them.

What lead scoring says is, do not leave any lead behind.

Whether any lead successfully travels through the sales funnel or not, no lead should be missed out on.

Is your mind also thining what mine is thinking? That this somewhat sounds like lead qualification?

Actually it is not!

To clear out that confusion, I will tell you some differences between lead scoring and lead qualification.

Differences between Lead qualification and Lead Scoring

Lead ScoringLead Qualification
Lead scoring lets you assign a specific point value to each leads based on the information you are able to gather about them.The process of determining whether a prospect fits your ideal customer profile has a high chance of becoming a customer and most importantly has a high chance of being a successful long-term customer.
Helps sales and marketing teams prioritize qualified leads when the number of qualified leads outnumbers the resources available in sales and marketing.It helps you in selecting through the clutter of leads that have made their way into your database.
Lead scoring has the same parameters to cover the data. There are two types of factors to rank these leads-Fit or explicit factorsEngagement or implicit factorsThere are two factors to keep in mind in order to qualify leads. 1. Lead fit 2.Lead interest or behavior
There are three ways to do lead scoring 1.manual lead scoring 2.Predictive lead scoring 3.probability-based lead scoringNo two organizations have the same ways for lead qualification. Moreover, even if your company has two products, then the parameters to qualify within the same company would be different.
Lead scoring can accelerate the process of lead qualification and help in prioritizing leads that are ready to be handed over to the sales team; this process is crucial to quickly identify and reach the right leads.Lead qualification cannot be avoided for the simple reason that not every lead is ready to buy from you, and if you are new in the market, or have a product that isn’t easy to sell or is innovative, then it’s even more difficult to convince a lead to convert.

Lead Scoring factors

These factors assure that the values you have assigned to each lead reflect the actual compatibility they have with your product.

Many lead scores are based on a point range of 0 to 100, but every factor created by you will support a particular aspect of your core customer.

Here I present six different lead scoring factors.

Hence, based on the type of information you collect from the people who get engaged with your business.

1.Demographic Information

As you own a company that sells software, do you sell your software based on any demographic, like to a particular organization, industry-based or maybe location-based? Ask demographic questions in the forms on your landing pages.

This way you can use the answers to see if they are a perfect fit for your desired target audience.

Therefore, one benefit of this type of model can be that you save the time of your sales team by subtracting points for leads who do not fall into the category of people your product or service is not made for.

2.Company Information

Does your company have a particular type and size of the business you sell your software to?

These types of questions about the company (their size, industry) can be asked too.

Through marketing efforts or during pre-sales discussions so that you can give and take points from their lead scores to the people who fit in and people who do not.

3.Online Behaviour

Every business these days has a website and social media presence for reaching out to their customers. How a lead interacts with your website can tell you a lot about how interested they are.

Furthermore, take a look at your leads who successfully got converted into customers.

By going through how they interacted with your digital assets, what offers did he click on? Which pages and how many pages did they visit on your site before becoming a customer?

The number and type of forms like query form, contact information, etc.  are important. As a result your sales teams may give high lead scores to the leads who visit high-value pages or the leads who fill high-value forms.

Similarly, your sales team will give high lead scores to the leads who have 10 to 15 views on your site, as compared to 1 or 2.

If your sales team will give high scores to every lead, then you can only imagine how much critical sales time they might loose chasing leads with low scores or negative scores?

Hence, for most businesses, it might be better to ignore the leads with a low score as it is a good sign that they might not be interested anymore.

4.Email Engagement

If any lead has subscribed to receive emails from your company, your sales team would not be that sure if they want to buy.

On the other hand, open and clickthrough rates will give your sales team a better idea of their interest level.

In the process of Lead Nurturing, your sales team would want to know who is opening every email.

And who always clicks on the offer promotion emails. This way they can divert their complete attention towards the opportunities that most actively engage with your brand.

5.Social Engagement

Your software selling company must be having social media networks like Instagram, Facebook or Twitter accounts, etc. 

If your leads or target buyers are engaged with your company on social media networks, then they will be getting high scores.

6.Spam Detection

Lastly, your sales team would want to give negative points to the leads who land on your landing page.

And to the ones who fill forms in a way that indicates that they are spam.

You might also know that by the email address a lead uses. If you only sell to established business organizations then you might want to snatch scores from the ones who fill forms using free non-commercial Gmail or Yahoo email address.

How to deal with more than one lead?

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If your software selling company just has one or two core customers right now and no new leads, it becomes easy to manage your sales and you do not need to rank or score your leads.

But as your company grows, you will have many leads and hence would need a lead scoring system.

As you expand into new product lines, new regions, or new personas. You might even focus more on up-selling and cross-selling to existing customers, rather than pursuing new ones. 

Every business has the opportunity to utilize multiple lead scoring systems that give you the flexibility to qualify different leads in different ways to get a comprehensive view of your leads.

If you are not sure how to pick a lead scoring system, here I have given some examples to help you think about some frameworks that you could adopt.

1. Fit v/s interest

Let’s say, for instance, the sales team of your company wants to evaluate customers on both fit (i.e. is a contact in the right region? The right industry? The right role?) and interest level (e.g. how engaged have they been with your online content?).

If both of these attributes are a priority, you can create both an engagement score and a fit score, so that you can prioritize outreach to contacts whose values are high in both categories.

2.Multiple Personas

Say your software company started selling one more software, now you sell two different software via different sales teams and obviously to different buyers.

As a result, You can create two different types of lead scores.

One for the buyer’s fit and the other one for their interest in either clothes or shoes.

Then, you’d use these respective scores to route leads to the right sales teams.

3.New business v/s up-sell

As your company grows, you might start diverting your attention towards up-sell (Upselling means trading up to a better version of what’s being purchased) and cross-sell (offering the customer a similar product or service) as much as a new business. 

But always remember one thing that the points which indicate the quality of the new prospects and existing customers are often completely different.

For prospects, you might look at demographics and website engagement.

For existing customers, you might look at how many customer support tickets they’ve submitted, their engagement with an onboarding consultant, and how active they currently are with your products.

If these buying signals look different for different types of sales, consider creating multiple lead scores.

These are some examples that can help you in managing more than one lead score.

Ways to calculate a basic lead score


1.Manual lead scoring

This is created by the user, meaning you assign a numerical value or grade to certain leads and lead activities (reading a blog post might be 5 points, downloading an eBook maybe 15, etc.).

This scoring also allows you to include as many attributes as you want to add (meaning you might be including some that really shouldn’t be factored in) and incorporates the weights that matter to you. There are four steps to proceed with manual lead scoring:

step 1. Calculate the lead-to-customer conversion rate of all of your leads.

Firstly collect data on the number of leads you generate.

And the number of customers you acquire from them to calculate the lead-to-customer conversion rate.

Your lead-to-customer conversion rate is equal to the number of new customers you acquire, divided by the number of leads you generate.

As an example, let us say the number of leads your software selling company generates is 50 and the customers you acquire from them are 10. 

So, 10/50 becomes 0.2.

Hence, the conversion rate of your company is 0.2.

step 2. Pick and choose different attributes customers who you believe were higher quality leads.

For your company attributes could be the customers who wanted a free trial of your software or maybe businesses that have 10-20 employees.

To choose which type of attribute to include in your model is an art.

You will choose attributes according to the reports your sales team gives.

And according to the reports you make after having conversations with the customers.

You could have five different people do the same exercise, and they could come up with five different models. But that’s okay as long as your scoring is based on the data we mentioned previously.

step 3. Calculate the individual close rates of each of those attributes.

To calculate close rates of each action happening on your website or what kind of people are taking that action is important to determine the actions you will take in return.

So, figure out how many people were successful in becoming qualified leads based on their actions.

Hence, You can use these close rates to actually score them in the step below.

step 4. Compare the close rates of each attribute with your overall close rate, and assign point values accordingly.

Find the close rates of each attribute that are significantly higher than your overall close rate.

Then choose which attributes you will assign points to and how many points will you assign? The points should be based on the magnitude of their individual close rates.

For example if the overall close rate of your brand is 2%.

Certainly, The close rate of requested a trial attribute is 28%.

Then the close rate of your requested trial attribute is 14 times than your overall close rate.

This way you can award 14 points to the leads with those attributes.

2.Probability-based lead scoring

The above-mentioned method is a bit simple. However, the most mathematical way is data mining techniques such as logistic regression.

These techniques are more complex and are often more intuitive to your actual close rates as a result.

Logistic regression involves building a formula in Excel that’ll spit out the probability that a lead will close into a customer. 

It’s more accurate than the technique we’ve outlined above since it’s a holistic approach that takes into account how all of the customer’s attributes, such as: 

  • industry, 
  • company size, and
  • whether or not someone requested a trial 
  • Interaction with your company: engagement

3.Predictive lead scoring

Creating a lead score can do great things for your business: improve the lead-handoff process, increase lead conversion rate, and more.

But, as you can see from the methods above, coming up with a scoring system can be a time-consuming task when done manually.

Wouldn’t it be easier if technology could take the manual setup and continuous tweaking out?

Leaving your team more time to build relationships with your customers?

That is where predictive scoring is used. Predictive scoring uses machine learning to identify your best leads by going through thousands of data so that you do not have to.

What predictive scoring does?

It segregates the common information your customers have and what common information was shared by the leads who did not become customers.

Then comes up with a formula that sorts out your contacts based on their potential to become customers.

This allows you and your sales team to prioritize your leads so that you do not waste your time on wrong leads.

These are some ways, which can help your software selling-company to calculate lead scores.

Now you know how to calculate lead scores.

Don’t you think you should know the value of leads?

And you should know how to differentiate between high-value leads and low value-leads?

To know this, read our article on what is a lead value?

Why is lead scoring important for your business?

Lead scoring is as important as other steps involved in the lead management process. Lead scoring provides a common hook that ties every lead into your sales funnel.

Here are some benefits of a lead scoring system which will prove why it is important for your business.

1.Less lost opportunities

As you know there are higher chances of losing leads than to gain them because of poor follow up and mismanagement of your sales team.

Lead scoring prioritizes leads so that you do not miss out on any hot lead and execute the follow up in a better way.

2.Helps in increasing conversions

When you start having more leads instead of losing them, higher total conversions will obviously be one of the results of having more leads.

3.Improves productivity of

Now that you and your sales team are not wasting time chasing wrong (lower score) leads.

Therefore, Your sales team will have more time to focus on the right prospects (higher lead scores) and convert more leads into the customers.

4.Better alignment of sales and marketing teams

Above all, it is important that sales and marketing work together to assure that the right leads are coming through the sales funnel.

Having data-driven proof of lead quality can help marketers to better understand who they’re attracting for the sales team, what the high-scoring leads have in common, and where adjustments need to be made to continue attracting better leads.

5.Higher ROI (return on investment)

When your sales process is efficient, sales teams prioritize the best leads, conversions increase, and marketing and sales are better aligned, it reflects in your ROI.

Therefore, spending less time on processes and making more money will automatically bring more revenue per dollar of investment in sales activities for your company.

Lead scoring tips from experts

“Lead scoring is a great way to customize your follow up processes – but two words of caution.

First, you had better make sure that you have a proven scoring model before you implement anything on a large scale.

Companies get themselves into trouble when they think they know what makes a more qualified lead, and have not fully tested their assumptions.

Second, it only makes sense to use lead scoring if you are going to use it in some way. If I told you that a prospect had a 20% likelihood of converting and another had a 5% likelihood of converting, how would you treat them differently? If the answer is, you wouldn’t, then lead scoring doesn’t make sense for you.” – Zach Heller, Sr. Marketing Director, New York Institute of Art and Design


Now you have answers to your questions about lead scoring.

And you know how it can help your sales process in your business. 

Thank you for investing your time in reading my article.

Now hurry up and invest your time in setting up a lead scoring system and start earning PROFITS.

Earn profits and expand your business!!!

Do not forget to thank me later!

I hope your business earns a lot of profits.

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