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3 min read

Why Lead Scoring is Bad for Startups

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Your approach to sales is critical to the success of your business, particularly as you are getting started. In this article, we look at why many marketers and sales professionals believe lead scoring is an ultimate best practice - and why it most definitely is not.

The background on lead scoring

Lead scoring is a methodology where contacts are ranked as they come in according to a set value system. The ranking is to orient your AEs on where to prioritize their attention, (presumably) where the highest dollar potential lies for the business.

However, based on our experience with startups, we have found that sales rarely follow lead scoring to prioritize contacts. Instead, they use it as a tool to eliminate contacts.

Lead scoring tech

There's a lot of technology to do lead scoring, which falls into two basic types. The first type of lead scoring, automated by what marketing system you use, is manual, assigning values based on criteria you manually set. For example, you could have the score go up if a contact does certain activities, or you could have a score go down for other things – like they're in the wrong industry, so they are never going to buy what you sell.

The second type of scoring is more algorithmic and typically uses AI to learn what leads are more likely to close deals than others. The marketing system then assigns a score automatically. Almost all lead scoring platforms do this, including HubSpot, but those scores are relative. They use a similar methodology as the more "manual" version, but you don't get to see the attributes that are causing the score to go up or down.

Scoring can go haywire

So the tech is there, but having it function in a useful way can be complicated.

CASE IN POINT: One SaaS client had 86 attributes for their lead scoring in HubSpot, and over 700 lists, many of which drove workflows that also had scoring sub-criteria.

This complexity caused the criteria to overlap, producing bad scores and resulting in the sales team's mistrust of the scoring system. When we eliminated this faulty system in favor of filtering out only truly unqualified contacts, the improvement for the client was upwards of $100k/month!

The scoop on ANY lead you get

Our philosophy is if you don't have more leads than you can physically call, why would you take the chance that you're prioritizing one lead over another?

If a sales rep gets five inbound leads in a day, for example, there is literally no reason they can't call or follow up with all five. Philosophically, we believe the role of a sales rep is not to determine whether a lead could become a deal, it's to follow up with all leads to see if any can become a deal.

NOTE: This last point is important and should be thoroughly covered in sales training. You need your salespeople to trust in your processes and not veer too far into making their own decisions on what constitutes a good lead. You pay (or will pay) good money for leads, and your sales team needs to follow through … don't get us started on how AEs often ignore gmail and yahoo contacts. Le sigh. 🤦

If a rep has five calls prioritized with scoring, more often than not, they will simply not call the leads low in priority. And not calling "low priority leads" can mean you are leaving money on the table. Lower priority leads can actually be terrific deal prospects that just haven't hit all the triggers to prioritize them high.

We get pushback from clients when we initially talk about this because so many marketing technology companies want to discuss scoring algorithms. It's a trendy methodology that has gained attention through marketing and best practice articles. Marketing managers are bombarded with all of this material saying they should be lead scoring. But no one stops and recognizes that technology companies are telling you this because they sell it.

A better way to handle leads

Cue system filters

People often use lead scoring to solve a problem that a different tool like filtering can solve. Let's say a new contact is a student or ex-US and would never buy your product/service. There are more efficient ways to eliminate them as a lead.

For example, with software like HubSpot, you can set up "if, then" filters that are much more straightforward than scoring and can also be automated. It works like this: If someone is outside of the country, an "if, then" filter can mark those contacts as unqualified and then send them a thank you email with a referral to some other resource. Likewise, you can use an "if, then" filter to mark any students as unqualified automatically.

Stop leaving money on the table.

Now there is an exception to our scoring stance. If your business starts to generate more leads than you have salespeople to handle them — to where it is physically impossible for your team to follow up on all the leads —we believe scoring can be useful in prioritizing them. BUT, you also need to put an SDR or BDR in play so that ALL leads can be processed. It's not worth the chance that you are missing quality leads due to the precarious nature of scoring.

As discussed in our ebook The Truth About B2B Sales, properly nurturing leads can become too time-intensive for deal closing AEs and they naturally prioritize their work towards deals vs. leads. An SDR/BDR can ensure quality leads are referred to AEs while eliminating the risk of leads not being followed up on at all.

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