Lead scoring is a process businesses use to rank leads in order of their potential revenue value. The higher the score, the more likely the lead will result in a contract offer or closed sale.
But what exactly is lead scoring? How does it work? And how can your real estate business use it to increase sales? In this article, we’ll answer all those questions and more.
What is Lead Scoring, and How Does it Work?
Businesses have used lead scoring for many years. The first time it was used was in the early 1990s, when companies started using it to rank customers based on their likelihood to buy a product or service. This ranking system allowed firms to focus their efforts on the leads most likely to result in a sale, improving their bottom line.
Lead scoring is a process that assigns a numerical value, or score, to each lead, based on factors that indicate the likelihood of that lead converting into a sale. These factors include the lead’s job title, industry, company size, budget, and many other criteria. The more elements included in the lead scoring model, the more accurate the score will be.
Creating lead scoring rules is essential for businesses because it allows them to focus their sales and marketing efforts on the “hot leads” that are most likely to convert into paying customers. Companies can improve their conversion rates and increase their revenue by prioritizing the leads with the highest scores.
How Can a Real Estate Sales Team Use Lead Scoring to Increase Sales?
Real estate sales teams can use lead scoring to rank leads in order of their potential revenue value. The higher the score, the more likely the lead will result in executing a buyer or listing agreement and, eventually, a closed sale.
Real estate agents often agree to work with anyone in hopes that their client will be a practical, realistic, and qualified person to work with. Unfortunately, that is not always the case. You can avoid working with a problem client by using lead scoring to help you identify and qualify your leads before you start working with them.
A lead scoring system may be a novel concept in the real estate industry. However, lead scores are a tried and true method businesses have used in other industries for many years.
The Benefits of Lead Scoring
Why is lead scoring essential? Because it allows businesses to focus their efforts on the most promising leads, which results in more sales and greater profits. Here are three benefits of utilizing a system to prioritize leads.
Lead scoring allows businesses to prioritize their efforts.
When your real estate business starts to grow, it’s essential to have systems and processes in place to operate optimally. One way you can do this is by assigning a lead score to all sales leads, enabling you to prioritize your efforts and focus on the most promising leads.
Lead scoring saves time and money.
By identifying which leads are more likely to convert, you can save time and money by not pursuing dead-end leads. Lead scoring models are fundamental in real estate, where the sales process can be lengthy and expensive, and a higher lead score means a better chance of a conversion.
Lead scoring increases sales.
When you focus your energies on the leads with the highest scores, you’re more likely to close deals and increase your sales. Lead scoring is integral to any real estate business’s sales strategy and can be a significant differentiator in a competitive market.
How to Get Started With Lead Scoring
Creating a lead scoring system is relatively easy. Once you create a custom, and perhaps, even predictive lead scoring model, your entire sales team will be able to benefit.
Step 1: Decide on Your Criteria
You’ll need to decide what factors will influence the score, such as:
- How many times a potential customer has been contacted
- The amount of time since the last contact
- How much money has been invested in pursuing the lead
- How many times a potential customer has viewed a property on your website
Step 2: Assign a Weight to Your Lead Scoring System
Once you’ve decided on the criteria, you’ll need to assign a weight to each factor. For example, you might decide that a potential customer who is pre-approved for financing is worth 25 points, while a customer who hasn’t seen a lender yet is worth 10 points.
Another example might be that you assign a customer with a budget of $1M a score of 20 points while a customer with a budget of $150K is given a score of five points.
Step 3: Start Scoring Your Leads
Once your criteria and weights are set, you can start scoring your leads. The lead score is simply the sum of all the weighted criteria. Using the examples above, a potential customer who has been pre-approved for financing and has a budget of $1M has a lead score of 45 (25+20). Another customer who hasn’t been pre-approved and has a budget of $150K has a score of 15 (10+5).
You can use lead scoring to prioritize your efforts and focus on the most promising leads. Lead scoring is an important part of any real estate business’s sales strategy and can be a significant differentiator in a competitive market.
When you focus your energies on the cold leads with the highest scores or hottest leads, you’re more likely to close deals and increase your sales.
Low Priority Leads
We feel that it is important to note that giving a low score to a cold lead doesn’t mean you can’t help them. If potential customers have low scores and are still considered warm leads in your sales funnel, you can choose to assign the lead within your sales team to a newer agent. By delegating the lead, another real estate agent can leverage the qualified leads by spending time learning how to close the transaction.
For solo agents who don’t belong to sales teams, you always have the option of referring out leads you assign point values that are considered low priority.
Are you seeing the importance of scoring leads?
If you’re not using lead scoring in your business, now is the time to start. It’s a simple and effective way to prioritize your sales leads, saving you time and money while increasing your sales.
Tips for Improving Your Lead Scoring Model
Your lead scoring model will go through many iterations throughout your real estate career. As you get more experience, you’ll be able to fine-tune your model to better reflect the types of deals you’re looking for. In the meantime, here are a few tips to help you get started:
Be as specific as possible when assigning criteria and weights.
The more specific you are, the more accurate your scores will be. Be honest with yourself, too. If you’re targeting luxury buyers and sellers, assign a higher lead score to customers who fit the criteria.
Review your lead scoring process regularly and make changes as needed.
As your business grows and evolves, so should your lead scoring model. You will want more time with engaged leads and new leads who meet your data points.
Test different lead scoring models to see which one works best for your business.
There’s no one-size-fits-all solution when it comes to lead scoring, so be sure to experiment until you find a model that works well for you. Perhaps you want to score your past leads and past clients to get started. You may also want to explore negative scores, which is when you subtract points for specific criteria.
Predictive Scoring and Lead Score Marketing Automation
We couldn’t write an article and not include a way to automate the concept of lead scoring! Enter: predictive scoring.
Predictive scoring is a lead scoring model that uses machine learning to predict which leads are most likely to convert. A predictive lead scoring system considers various factors, including historical data, demographic information, and engagement data. Basically, you feed a machine your criteria, and it automatically assigns lead scores to your database.
Lead Score Marketing Automation
Lead score marketing automation is a tool that can be used to automatically score and prioritize your leads. This type of software considers various factors, including the leads’ engagement with your website, their interactions with your sales team, and their demographic information. You will also be able to pair your lead scores to specific workflows and automate email marketing, follow up, and other marketing activities, giving you valuable time to enjoy more deals.
Would your real estate sales team benefit from an automated system to prioritize leads and assign lead scoring rules to all your sales leads? How your lead interacts with your outreach will give you lots of data to curate a well-oiled scoring system. Lead scoring models are definitely a concept to consider.
Parting Words
Lead scoring is a process used by businesses to rank leads in order of their potential revenue value. The higher the score, the more likely the lead will result in a sale.
In this article, we’ve given you tips on how to create an accurate lead scoring model and ways to improve it over time. We’ve also included information on predictive scoring and how lead score marketing automation can help your real estate business.
If you’re not using lead scoring in your business, now is the time to start! It’s a simple and effective way to prioritize your sales leads, saving you time and money while increasing your sales.
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