3. There has been a long standing debate over lead scoring, with two main camps . One camp states
“Scoring helps efficiency in the dealership .” The other camp states “All leads should be worked, so
scoring adds little value, and can even be detrimental .” If we look deeper into the lead process, we
will find that in actuality both sides are right . What is wrong is choosing one over the other . Let’s look
at the two positions .
LEAd SCOriNg
Lead scoring used to be applied to batch handraiser files (BRCs, events, etc), in order to determine
when and how to incubate these sources of leads . Because the sources were batched, the tendency
was to send them in bulk transfer, to dealer personnel for follow up . Given the constraints and issues
confronting showroom personnel on a day to day basis, such bulk transfers turned the showroom
from an environment of “managed chaos” to one of “unmanaged chaos .” Since not all bulk transfer
leads are critical in terms of timely follow up, lead scoring had a value added position in keeping the
peace and affording efficiency . Thus, “If it works for campaign leads, it should work for all leads .”
NO SCOriNg
Real-time leads, and many 3rd party leads are actual customers requesting information . They come
in at a daily pace, vs . large batches . Because the customer has actively engaged, by definition it is a
Hot, or high score lead . Ignoring, or not acting on these leads creates a lost sale, so process efficiency
is not a primary concern . Thus, “Scoring hurts more than helps .”
CurrENT STATE OF LEAdS
To fully answer the scoring debate, the current basic facts that drive them need to be reviewed .
They are as follows:
• Number of leads handled is growing
• Response time to leads is improving
• Quality of response is not improving
• Approximately half of all leads convert within 60 days
• Brand and dealer defection remains high
The facts above are often used in positioning the need for lead scoring at the time a lead is initially
distributed, so as to indicate quality or priority of lead follow up . The argument goes as follows; “We
can’t follow up with the appropriate level of quality for all leads that come into our store today . As a
result, we need to know which leads are most deserving of a timely and quality response in order to
better manage dealer-level personnel, as well as, sales lead response and conversion .”
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4. At first glance, it is easy to understand why some people jump to the above conclusion . After all,
“Why waste time responding to a bad lead?” Wouldn’t we all be better served if we could eliminate
the time and effort put into responding to bad leads? At the very least, wouldn’t we all be better
served if we could respond to the good leads first and get around to the bad leads later?
Why ArE WE PAyiNg FOr A LEAd iN ThE FirST PLACE?
However, is that also the case of real time and third party purchased leads? If it is possible to
distinguish between a good and a bad lead with such accuracy that you would delay responding,
why is anyone buying the lead in the first place?
Let’s look at it from the volume perspective . Eighty percent of all dealers get 150 leads/month
(7 per day), or less . 95% get 350 leads/month (16 per day), or less . Are 2 leads per hour an
excessive volume that needs prioritization? Since these have been directly generated by a potential
customer, is there a distinguishable “good” and “bad” lead? Is it worth the risk not to respond
immediately?
This appears to be a clear case of treating a symptom and not a cause . If you’re buying poor quality
leads, shouldn’t you drop that bad habit instead of developing (and paying for) another?
This is not to say that lead scoring does not have an opportunistic role . But let’s start with the basics .
One can only assume that if you’re paying for a lead, you want to put forth your best effort in getting
a return from that investment . Since the industry knows empirically, from study after study, that a
timely and thorough response correlates to the highest possible conversion rate . Thus, the idea of
prioritizing one lead for a good and timely follow up and another lead for something less does not
make sense . It is not a good idea . Rather you should spend your money to improve response time
by responding to that customer who is expecting a near term response . (Data that is now available
shows that after 3 hours 50% of potential customers have lost interest in that dealer/brand) .
WhAT ABOuT BATCh LEAdS?
While it is now clear that scoring real time leads causes more harm than good, what about batch
leads? As mentioned earlier there are several marketing techniques (e .g ., Events, Business Reply
Cards, etc .) that generate lists of potentially interested buyers . There are also several analytical tools
that can identify people who are potentially in market . In these cases a person hasn’t directly reached
out, thus their state of interest has to be deduced . They are also processed in bulk/batch creating
periodic floods of information . These types of leads can be better considered as prospects vs ., true
leads . As such, scoring can add value . It can help to smooth the work effort to manage these types of
leads . It can also help to determine when, and which type of sales technique is best .
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5. SCOrE, Or NOT TO SCOrE
As you can see both camps are right when used in the proper context, but wrong when used
holistically at the expense of the other . The best practice is to do the following:
• The first priority should be to respond to a leads as quickly as possible with high quality .
• The second priority is to measure lead source conversion rate, and stop (reduce) buying from low
quality sources .
• The third priority is to treat marketing leads as “prospects” and utilize scoring for better
management and treatment .
WhAT NExT?
Now that we have the scoring of inbound leads debate behind us, with an average industry lead close
rate of 8%, we most likely have not sold a car . We may have been fortunate to book an appointment,
but nonetheless not sold a car . In most cases, the lead goes in the circular file, or stacked in a dust
covered piled and forgotten while moving on to the next hot lead .
SCOriNg ThE NExT OPPOrTuNiTy
As mentioned earlier, there is another opportunistic utilization of scoring . Scoring can bring back
those lifeless “lost sales” by helping to determine when and how to reengage marketing into the
process of lead conversion (sales) .
Consider, for example, the two most prominent factors or questions in scoring leads today:
1) What is the time to market (to buy)
2) What is the match to my customer/product portfolio (look alike/likelihood)
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6. SCOriNg 101
Generally speaking, development of a lead scoring model is based on the examination of a universe
of historical leads at the point-in-time in which they converted . The exercise takes into account a
large array of data elements, as they existed at the time the lead converted . The operative theory is
that by understanding the dependent variables present at the time leads convert enables the resulting
algorithm to score leads in the future based on similar characteristics (high priority lead) or dissimilar
characteristics (low or normal priority lead) .
intention To Purchase
Intention to buy, as it relates to the purchase horizon remains a critical element in the prioritization
of leads . Outside of the current owner portfolio, self-reported data continues to be one of the best
indicators for market timing and as such is a strong indicator of how “hot” a lead is . However, the
manner for determining how “hot” a lead is has great variability . Consider:
Current Owner relationships:
Existing owner households or leads from current owner households are more likely to buy than a
previous owner household (disposer households) and previous owner household are more likely to
buy than first-time buyers .
• Current Owner readiness can be assessed through:
– Understanding readiness (how close to purchase) for the above can be calculated in various manners .
– Current owner readiness can be measured against empirical information such as:
Vehicle age
Mileage
RO Patterns
(However, failing confirmation of the above does not eliminate a self-reported in-market lead from
true readiness because the household could be adding to the family fleet . Therefore, the potential to
increase share of garage for Brand must be considered .)
Previous owners and pure prospect readiness can be much more difficult to accurately measure and
predict beyond their self-reported readiness . Methods used most effectively here include:
• Modeling against recent historical buyer profiles (typically including life stage)
– Utilizing off-the-shelf IMT models built from vehicle registration data
• Other contributing factors to accurately measure readiness include:
– Recent dealer visits (sometimes confirmed through access to dealer CRM systems - Ups)
– Behavioral characteristics such as requests for quote
• Indication of vehicle available for trade-in (trade-in valuation)
• Financial deadlines (ie ., end of lease, positive equity position)
• Activity across multiple sources (typically within a 30-60 day window)
– This is particularly indicative when focused on a specific brand or vehicle segment .
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7. Appropriateness:
A consumer or household that matches the portrait of the brand or vehicle segment owner . These
instances are more easily modeled and identified than readiness and are useful in developing follow-up
communication strategies to optimize conversions/sales . Areas of concentration include:
• Portrait match
• Household resides in dealer trade area
• Other same-Brand vehicles in the household
• Previous (recent) TDM (targeted direct mailer) campaign targeted the household
• Vehicle familiarity as indicated by references to specific vehicle trim level or options package
Value:
Leads from households which represent “high value” consumers may be given special consideration
where high value equals highly profitable or loyal . These are primarily current or previous owners who
have a known history of:
• Purchasing from stated dealer in the past
• Financing through captive finance
• Frequent dealer servicing
It is also possible to model the characteristics of “high value” customers using demographic and life stage
attributes and extend identification of desirable “high value” households out to the prospect universe .
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8. hyBrid APPrOACh
Most discussions infer that the purpose of lead scoring is to rank “intention to purchase” . Because
intention to purchase is typically associated with a timing element, our perspective is that intention
to purchase is best utilized when augmented with additional qualification . Additionally, because
leads convert over varying periods of time, we believe that a best practice is emerging from a
hybrid approach to lead scoring . This approach takes into account both factors/questions in order to
implement strategy and tactics that compliment cadence and urgency of communications over the
near term and long term opportunities . Thus, SCI’s recommendation is to compliment intention to
purchase with a secondary scoring algorithm and build the appropriate response strategies around
the combined scores .
A complimentary scoring algorithm is a look-a-like portrait of a similar Brand owner/buyer household,
or a series of look-a-like portraits . These could be deployed for each of the primary make/models in
the same-Brand fleet . Another complimentary scoring algorithm option would be to deploy and utilize
a customer-value model in conjunction with intention to purchase . In many instances we find that
these types of complimentary scoring models already exist within the direct marketing departments of
manufacturers we work with . The benefits of this are:
• No development cost, only a deployment effort is required
• Consistency in the recognition of who the ideal Brand owner is
• Increased flexibility in response strategy
In the case of a dual deployment of scoring algorithms, intention to purchase would remain the primary
score for determining response strategy, particularly as it relates to priority/urgency of follow-up .
However, the look-alike or customer-value portrait would be used to determine which strategy to
employ in the response .
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9. PuTTiNg iT ALL TOgEThEr
Now that we know what the “score” is for an un-sold lead, we can take the appropriate action to
nurture that lead into a sale in the future . This process “mines” the untapped diamond mine of
existing contacts generating sales from those that weren’t ready when first contacted . To understand
the approach, picture a window with 4 panes . Each of these panes represents a cumulative picture of
the customer’s intent to purchase horizon, and the appropriate response strategy .
SAmPLE SCOriNg QuArTiLE
HIGH
FIGHT TO WIN DILIGENT
PURSUIT
Intention to Buy
NURTURE INCUBATE
LOW Match to HIGH
Owner Portrait
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10. diLigENT PurSuiT:
Scoring Result(s): Both the Intention To Buy (timeframe) and Match Owner Portrait scores are high .
Context of Score: The consumer is deemed to be a serious near term buyer and has a strong match of
the typical Brand owner, thus the Brand vehicle is likely high in their consideration set .
Course of Action: Immediate and diligent follow-up and pursue to close in near term .
FighT TO WiN:
Scoring Result(s): The Intention To Buy (timeframe) score is deemed high, however the Match Owner
Portrait score is deemed low .
Context of Score: The consumer is deemed to be a serious near term buyer but does not match the
typical Brand owner, thus the Brand vehicle is likely not high in their consideration set .
Course of Action: Develop an aggressive “snatch and grab” strategy for conquesting consumers
deemed more likely to convert to a competitive brand .
iNCuBATE:
Scoring Result(s): Intention To Buy (timeframe) score is deemed low, however, Match Owner Portrait
score is deemed high .
Context of Score: The consumer is not likely a serious near term buyer but does have a strong match
to the typical Brand owner, thus as they come to market the Brand vehicle is likely to be high in their
consideration set .
Course of Action: Develop an incubation strategy that maintains awareness with the consumer while
monitoring their timeframe to buy . Build an integrated response leveraging both Brand and dealership
communications . Dealer customer actions should be focussed on keeping the customer prospect warm .
NurTurE:
Scoring Result(s): Both the Intention To Buy (timeframe) and Match Owner Portrait scores are low .
Context of Score: The consumer is not deemed to be a serious near term buyer and does not match
the typical Brand owner .
Course of Action: Develop a nurturing strategy that builds a relationship and indoctrinates the
consumer into the Brand owner experience (preferred social networks, blogs, etc) while monitoring
their timeframe to buy . Build an integrated response leveraging both Brand and dealership
communications . Consider SCI Lifecycle Management capabilities for communications integration .
Dealer customer actions should be focussed on feeding the customer with interaction which will
convert the customer into the “fight to win” and “dilligent pursuit” categories - not just require the
customer to be further “incubated” by the dealer .
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11. A deployment such as the one described above provides the versatility to address multiple value
propositions:
1) Increase Brand new vehicle sales (and lead conversion rates)
2) Build consideration set of the Brand
3) Build dealer awareness within prospect and owner communities
4) Further leverage marketing investments through lower funnel activity integration
iN SummAry
• Get the fastest impact by focusing on improving quality and response times to real time and 3rd
party leads .
• Measure lead source effectiveness and take appropriate action (i .e ., buy more from good sources
and less from bad sources) .
• Treat prospects as prospects, not as leads . One size process does not fit all . Leads need immediate
attention, prospects need to be nurtured .
• Utilize Hybrid Scoring model to effectively manage intent to purchase and response strategy
building consideration, and converting longer horizon customers .
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12. For more information contact:
John Olsen, director of Sales mike Lesinski, director of Sales Simon Chong, Vice President Sales
jolsen@scitorque .com mlesinski@scitorque .com schong@scitorque .com
Phone: 201 .741 .1079 Phone: 734 .674 .6976 Phone: 905 .479 .1595
ABOuT ThE AuThOrS:
mike Lesinski, director of Sales
Mike is a seasoned sales and marketing professional with extensive knowledge of the automotive
industry . Prior to taking on the role of Sales Director for SCI, he directed the Marketing Information
Products Group for an information services vendor, specifically focused on the automotive
sector . In this role, he consulted with most OEMs in the areas of customer information
compilation and utilization .
Tim Evavold, VP Services and Operations
Tim has held a broad number of business and IT executive positions within the automotive industry
that have focused on developing and managing the customer relationship experience for dealers and
automotive companies . He continues in this role through his work with SCI .