What is the single most popular topic at a lead generation conference? We could probably even make that a broader question and ask what is the single most popular topic at an online marketing conference? If you just started attending conferences in the last few years you may possibly answer that question by saying, “Lead Scoring”. Well, if you did you would be wrong. However, I do want to talk about lead scoring in this post, I am just not there yet.
The single most popular topic at a lead generation conference is…drum role…. “Transparency”. It doesn’t matter what side of the table you are on or what session you are attending, the topic of transparency will come up. How and where are you generating leads? What type of creative are you using? How many times are you selling the leads? What marketing strategies do your employ? Those may be some of the transparency questions that will get asked by lead buyers. Lead buyers have always wanted more transparency into what their lead sources are doing. What is contact rate? How quick are you calling the leads? How many applications have you taken? Can you send me the leads back with their current statuses? These are some of the transparency questions that are asked by lead sellers. There are transparency questions across the board in this industry and over the last 5 years there has been little improvement. I honestly think that in the last 24 months we have seen the most gains and are seeing more communication between all industry participants. People now are starting to understand that without a certain level of transparency and communication their success will be capped.
The second most popular topic is “lead scoring”. It has been a hot topic for the last few years and I think that now both topics are on a collision course. Over the past few weeks I have been speaking to a number of industry players on both lead buyer side and the verification/lead scoring side and there has been discussions about these two very popular topics. The discussion includes a lead scoring solution that I guess you could call a “black box” solution and actually covers a much broader discussion then just a black box lead scoring solution. Currently there are lead generation companies, lead exchanges and actual lead scoring companies that provide a level of lead scoring. They will typically take into count 100′s of different factors when determining a leads score. In some cases they actually include the buyers closed loop data.
The issue that is on the table and that has been included in my recent discussions is whether or not these types of solutions actually take the industry a few steps backwards. The ultimate goal of transparency is to raise the level of communication between the buyer and seller so that together they can find the right marketing strategy/mix that will be the most successful for the buyer. This is not specifically the goal of lead scoring, however coupling closed loop feedback with lead scoring you are left with a very powerful optimization tool. The question is if lead scoring without the transparency is really worth investing in. Does not knowing the factors that actually go into the score have any value to you has a lead buyer and does not receiving the feedback with the lead scores provide any value to you as a marketer?
Its my thought that while “plug and play” type of solutions may be the easiest to acquire or implement they are the most difficult to reap benefits from and most importantly optimize. This could be an incorrect thought if each integration was specifically built out for each company, but if that was the case it would probably not be a “plug and play” or “black box” solution.
So I want to ask you to share your thoughts. Is transparency important to lead scoring? Are their repercussions for there being a lack of transparency, if there actually are?
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First – full transparency about who I am – I’m with TARGUSinfo, a company that provides lead verification, scoring & analytics services to hundreds of lead generators & lead buyers. We are promoting transparency in all aspects of our business including lead scoring. Working with hundreds of lead generators & lead buyers, we have also seen transparency as the single largest topic in this ecosystem.
When it comes to lead scoring, transparency is paramount. If a lead goes into a ‘black box’ as you mention, and a score comes out – a 1-10, perhaps bronze-platinum’, or A-F – whatever scoring mechanism utilized, that may be viewed as helpful information to predict the likelihood of that lead to take a certain action. However, without transparency into what went into that score or the makeup of the individual, the lead generator is robbed of an opportunity to learn more about why it was a good or bad lead, and how to help the lead buyer find more of the goods. Moreover, in certain instances, lead buyers have used this black box to cut purchases of low-scoring leads, but without providing any insight to the lead generator that could help them. This hurts the lead generators’ ability to help the lead buyer and therefore hurts the entire ecosystem.
My personal view is that some people are afraid to provide true transparency – hording knowledge. However, if we want to learn from the past, we know that efficiencies will continue to drive this marketplace, and transparency between all parts of the ecosystem will drive efficiency – be a part of it, or get left behind.
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Ross,
I think you are right, but I also think it is a matter of what is the easiest for some people. I see so many companies go for what is the easiest to implement first, rather then what is the best and because “Lead Scoring” is so popular these days companies are will to get anything implemented just for the sake of having implemented lead scoring.
I must say however, its not to say that the easiest is always wrong or bad. Sometimes it is better then nothing at all. I think it may be a matter of expectations.
What are your thoughts about that statement?
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Really interesting post! From a lead buyer’s perspective it doesn’t really matter what goes into the score in my opinion. A while back when Leads360 analyzed what the most important characteristics of a lead were in terms of predicting whether it would convert, using the same type of statistical techniques that a scoring company like eBureau or TargusInfo might use, it was pretty illuminating. Some things obviously effect the likelihood of a lead closing for instance, for a mortgage lead, when the home was last mortgaged or more specifically that the home had not been remortgaged in the past 12 months. Other aspects were a little more unexpected like whether the email provided was a corporate domain or an ISP email like gmail.
I don’t think buyers profit much from knowing what goes into the score. They are likely to want to just buy leads in a particular score range and unlikely to be allowed lead filterzs based on the predictive factors of conversion. The really sophisticated buyers will run their own score (with help from eBureau and TargusInfo) and figure out which leads they are able to work better than the score suggests and therefore find unique arbitrage opportunities.
However, I am sure that lead sellers/producers absolutely want to know what goes into the score. Them knowing this would no doubt lead to big increases in lead quality as there are definitely factors that determine conversion rates that can be targeted. The dilema for the scoring companies however is that by releasing the secret code to their score, leads would inevitably become more homogenous as providers figure out how to get high-scoring leads. This reduces the value of the score for the lead buyer as the separation in conversion rates becomes less. In other words, it is in the interest of the scoring companies to have an industry where the variability of lead “quality” is high.
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Good follow-up Nick from the Leads360 perspective and from seeing the dealings of your numerous clients. I do disagree with one of your final points though—“The dilema for the scoring companies however is that by releasing the secret code to their score, leads would inevitably become more homogenous as providers figure out how to get high-scoring leads. This reduces the value of the score for the lead buyer as the separation in conversion rates becomes less. In other words, it is in the interest of the scoring companies to have an industry where the variability of lead “quality” is high.”
Actually there is no secret code to scoring – the scores are developed from the fundamental drivers of a lead buyer’s business – everyone in the food chain needs to understand these drivers so that they can better service each other. So disclosing the key attributes behind scoring is a great innovation for the industry – total transparency – understanding your customers’ business – is what will sustain the growth of their lead gen business.
Also, I think many in the industry tend to overlook a key point when it comes to scoring. Scoring is useless without identities- identification is the key to attributes about potential customers- and attributes are the key to scoring. The matching identities to appropriate attributes part is exceedingly difficult for most data companies to unlock. Same goes for lead verification. TARGUSinfo has published our waterfall business rule verification approach for years– showing exactly how we categorize leads for anyone to see and try to copy. Anyone that tries to copy the process has to have access to the latest data linkages between such things as name, address, mobile, landline, email etc. or the process just doesn’t work. It wouldn’t be accurate without the most accurate real-time identity information.
I’ve posted some additional thoughts related to this topic on our blog as well:
blog.targusinformation.com/
Best,
Dave
davewengel@targusinfo.com
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Having some level of transparency into the drivers behind a lead score is important for both buyers and sellers of leads. Lead scoring is an important tool to measure the quality of leads coming from various lead sources and can help both buyers and sellers improve the quality of those leads and boost the sales rate. Anyone buying a lead score should have a good understanding of the key drivers of a score and more importantly, what specific actions they can take to improve lead quality. With this in mind, I do not believe that 100% transparency to all members of the ecosystem is necessarily the right answer.
Lead scoring vendors, having both lead sellers and lead buyers as clients, have an important responsibility to protect their clients’ data and their intellectual property. For a scoring company to reveal confidential information about a clients’ model to any 3rd party is a significant breach of trust. It is solely the prerogative of the client to reveal any information about a proprietary business process (including lead scoring) as they see fit.
Don’t get me wrong. I think transparency is important, but exposing proprietary business processes to your partners is a decision that must be carefully weighed – like any other important business consideration. The key question for each client to answer is what is the appropriate level of transparency to expose to the ecosystem? I maintain that the appropriate transparency must be ACTIONABLE to the ecosystem and must not compromise the integrity of the lead generation process. More transparency can certainly lead to improvements in quality, yet there is a moral hazard in revealing too much about a lead score that could invite “gaming” the system.
For those interested, I’ve posted a longer article on this topic on our blog http://www.ebureau.com/blog, including a discussion around common factors typically found in lead scoring models. Having built and reviewed more than 100 predictive models for online lead generation, I can tell you that there is no “smoking gun” when it comes to lead score predictive factors…
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