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How to Use Lead Scoring and Grading to Improve Direct Mail

Written By Amber Breeden

July 8, 2022

During economic downturns, marketing budgets tend to be first on the chopping block. So it’s more important than ever not to waste your hard-won marketing dollars on prospects who won’t convert. You might be thinking, well, duh, that’s the point of marketing, but you’d be surprised how many companies throw everything at the wall hoping that something, somewhere sticks. While not a smart strategy for any channel, this approach can be especially budget-busting for direct mail.

When used strategically as part of a multichannel campaign, direct mail can improve your ROI by as much as 20%. The key word here is “strategically.” While you can employ direct mail during any stage of the buyer’s journey, it usually works best further down the funnel as a supplement to other marketing and advertising. As such, not everyone in your database should get direct mail—it should be reserved for your best leads. So how do you know who qualifies? The best way to ensure you’re targeting the right audience is to score and grade all of your leads. 

Lead scoring involves assigning a specific value to leads, usually on a scale of 1-100, based on their behavior and how likely they are to convert.

Lead grading assigns a letter grade based on how closely a lead’s demographics align to your ideal buyer persona.

In a perfect world, you’d have the systems and resources to do both for the most accurate data intelligence. At a minimum, you should grade your leads so you can segment based on which leads are the best fit for your products or services. Let’s look at lead scoring and grading in more detail to help you determine the best path forward. 

Lead Scoring

Scoring leads is all about measuring engagement and interest. What behaviors lead to conversions? To figure this out, you’ll want to compare leads who have converted to customers against those who haven’t. For the leads who converted, what actions or behaviors do they have in common? Do they all follow your company on social media? Did they download your latest ebook? Did they open your emails? Once you have an idea of what actions help move prospects through the funnel, you can start scoring.

There are three methods for scoring leads: manual, logistic regression, and predictive. Manual is exactly what you’d expect: several steps and formulas that help you manually calculate scores. If you’re interested in giving it a shot, this blog post will walk you through the steps. Logistic regression introduces a data mining technique and uses formulas in Excel to calculate probability. It’s more mathematically sound than the manual process, but it can still be time-consuming to set up and maintain. But if you want to go this route, this resource walks you through how to do so. 

The final method is predictive lead scoring. Predictive scoring takes an automated, machine learning approach to calculating scores. As more data comes in, scores change to reflect real-time engagement. Predictive scoring models take time and effort to set up correctly, but when done right, they provide ongoing, accurate insight for sales and marketing. The easiest way to do predictive lead scoring is with a dedicated system or software. Many leading CRMs and marketing automation platforms offer this feature, and there are several standalone products on the market as well.    

Lead Grading

Unlike lead scoring, which relies on individual actions and behaviors, lead grading is based on demographic information. You look at each lead’s attributes to determine if they are a good fit for a particular product or service. If you are B2B, those attributes might include business location, job title, industry, company size, job level, business type, or annual revenue. If you are B2C, the attributes might shift to home address, household income, age, gender, or whether there are children in the home. 

To start, you need an ideal buyer persona that includes both lead-level and (if applicable) company-level information. The more specific and detailed your persona, the more you can hone in on which leads are the best fit. When lead grading, you compare each lead’s attributes to those of your buyer persona to see how closely they align; the closer a lead aligns to the persona, the higher the grade. Depending on the complexity of your business, you may have a different persona for each type of product or service you offer, since they might appeal to different audience groups. A lead might be an A for one product but a C for another based on their attributes. 

The more demographic information you have, the more targeted and precise your lead grading will be. Use lead forms on landing pages and downloads to collect the information you’ve determined is most helpful in the grading process. A note of caution though: there’s a fine line between collecting helpful information and creating a barrier to entry on a lead form. Only request what you truly need to inform your lead grading. 

Combining lead scoring and grading will help you segment your data to improve your direct mail response rates. No more wasting money chasing longshot leads. If lead scoring seems unattainable with your current systems and resources, start with lead grading until you’re ready for the next step. Even the most basic segmentation will give your direct mail a better shot at converting prospects to customers.