Developing an automatic “lead recognition” algorithm
Why automate lead-logging in a CRM system?
We have made the following points repeatedly in this blog:
1. Marketing and sales need to feel that they have joint ownership of the entire business process, from creating awareness in the prospect to generating and capturing prospects’ interest (lead and opportunity) to taking it to close.
2. The primary job of a sales or a marketing guy is not to spend time on the CRM system in use. Their primary focus is the customer and the support systems like the CRM systems should track the customer activities that are relevant to be pursued.
3. A lead happens because of the efforts (some seen and some unseen) of many people in the organization and many activities performed. From the client side, more than one person is involved and their roles in the purchase process need to be logged along with the lead that they influence; preferably automatically.
4. Customer activities are the activities that are more relevant; different activities have different weightages, as any seasoned sales manager will tell you.
A lead is NOT an individual or a contact. However, a lead arises out of actions taken by one or more contacts working in a buyer organization (account).
There are 2 parts of the lead-scoring algorithm:
(1) Fitment score: Assigns a score to the appropriateness of the target market, account and contact. For example:
(a) If your product is primarily sold to the automobile industry (let’s say you make automobile painting machinery), then enquiries received from a related industry (lifts, washing machines) will not have a high score.
(b) Let’s say you make forklift trucks of capacity appropriate for large structures (100 tonnes or above). If a small building contractor called you, you may give that inquiry very low score.
(c) If your product is primarily sold after a long evaluation cycle by first working with your customers’ R&D department, then cold inquiries received from the purchase department will get a low score vs a high score if someone from the R&D department made the initial contact.
A fitment score is usually arrived at from the “profile” data of the target account and contact. In the absence of the “Interest score”, this is of use only to determine usefulness for targeting these contacts through marketing activities.
(2) Interest score: Assigns a score to the logged activities of contacts pertaining to a product/ product category, within an account.
FS: score of industry (related to the product/ category) * score of account * score of contact profile
FS is a static score, based on profile of the account and contact related to the particular product/ category.
IS: (Interest score) is the sum of the scores of all activity scores related to a product or product category in a particular account.
For an account, we have to count as lead for a product or product category if IS is greater than a certain threshold provided FS is not less than a certain threshold.
Now, for a lead to be counted, we have to define necessary and sufficient threshold values for both FS and IS. This will most probably vary from company to company and will need to be defined and refined per actual situation and experience.
Activity: Something that the customer does which we log into our system. Each activity is pre-defined and has a value assigned in our system.
Campaign activity: Activity initiated (typically by marketing department of company) targeting multiple contacts over multiple accounts to get them interested in a product or product category.
Sales activity: Direct contact by sales executive or his boss with any contact in an account.
Why activity value: A customer through his actions demonstrates his propensity to buy. It is rarely one action, but many actions which add up to a strong “buying signal”. There are activities, as experienced sales managers know, which are strong buying signals and there are those which are weak or even negative buying signals. In real life, if a customer sends a lot of signals, then the probability of a deal is high. So, we assign values to significant activities undertaken by the contacts.
Relative weightage of activities: Customer activities have normally more weightage than any activity done by us. However, there could be some activities done by sales which may have overriding weightage.
What do you think? Makes sense?