This blog acts as a general introduction to account scoring and offers a few ideas on how to build your very own account scoring machine. At the end of the blog, you're provided with an excel template to try out account scoring yourself.
What is account scoring?
Account scoring is the process of sorting all the potential customers in order from the most to the least valuable. The estimated value of an account is equal to the proximity to the ideal customer profile (a customer that receives the most value out of your offering). A simple way to do account scoring is to build an Excel and manually weigh the different criteria. A more advanced method is to use artificial intelligence and a combination of internal, behavioral, and open company data.
Contents of this blog
- Foreword on account scoring
- The basics of account scoring
- Why use account scoring?
- Difference between lead scoring and account scoring
- How to create an account scoring template
Foreword on account scoring
There are certain people that you find easier to discuss with. During leisure you enjoy doing similar things, your dog happens to be of the same breed, and both of you spend unhealthy hours listening to medieval-era choir music. Simply put, you get along just wonderfully!
In B2B sales, such chemistry occasionally makes the deal. Your new friend supports your business and purchases the thing you're selling to make you happy. No one at the customer organization needs the service, and its usage is minimal during the first and only contract period you'll share. Anyway, you and the buyer keep on high-fiving every time you come across!
A friendship between you and an individual at a prospect organization is a beautiful thing but has little to do with building a successful, long-term business relationship between two organizations. In the B2B environment, friendship is a small indication of the fit between two organizations. The organization needs a friend from another organization. Inter-entity relationships are too complicated for this blog.
In the B2B environment, a friendship is a small indication of the fit between two organizations.
Let's discuss how organizations find like-minded organizations in the wild.
The basics of account scoring
No one has yet created a service, that is a fit for everyone. As in human relationships, no one is loved by all. For every service or product, there's a portion of customers that receive the most value using it. At Vainu, we rely on a framework called Ideal Customer Profile (ICP) to draw a picture of a customer that is a perfect fit for us. It's not necessarily a real-life organization, but an ideal, which we attempt to pursue.
Following ICP while doing sales prospecting to acquire new customers is a win-win for every stakeholder. It is easier and faster to sell to an ICP-fit organization. It receives more value out of the relationship with your organization and will remain as a customer for an extended period. Simply put, ICP customers have a maximum customer lifetime value (CLV). Such a customer will likely also act as an advocate for your business! You can read more about defining your organizational Ideal Customer Profile here.
It is easier and faster to sell to an ICP-fit organization. It receives more value out of the relationship with your organization and will remain as a customer for an extended period. Simply put, ICP customers have a maximum customer lifetime value.
While creating an ICP target group, some of the organizations are easily dismissable by filtering out organizations from, e.g., unfitting industries and revenue classes, but the rest of the group requires sorting from the most to the least valuable so that sales may use their limited resources wisely.
Sorting of this group of potential prospect organizations is called ACCOUNT SCORING.
Let's say we're scoring accounts from 0 to 10 depending on their fit to be your customer. 0 is a company that receives zero value out of the service - as a hairdresser would benefit from a company manufacturing forklifts - and 10 is a perfect ICP-fit, as Vainu is for every sales organization. *titter* 🤭
Account scoring won't build itself and will require well-thought variables to function. We'll dig more in-depth on how to do this later in this blog. Next, I'll attempt to argue the importance of scoring accounts.
The most important things at this stage:
- Some customers are more valuable to you than others.
- Ideal Customer Profile (ICP) reveals the most valuable customers to your organization.
- ICP is a prerequisite for building an Account Scoring scheme.
- Account Scoring sorts all the prospect organizations from least to most profitable.
Why use account scoring?
Account scoring requires a well-defined Ideal Customer Profile (ICP) to function and reveals the level of similarity the prospect organization has with the ICP. Next, we'll discuss whether building an account scoring machine is relevant in the first place.
Is account scoring something you should attempt to build?
The most skeptical of us might think that the complexity of the market won't make it possible to define a single ICP and thereby score accounts that approach the ideal. Also, one could argue that the already-existing customers won't necessarily include best-fit organizations that should act as models of a perfect customer. These are justified concerns, but winnable. Solutions include:
- Using multiple Ideal Customer Profiles and running every prospect through every profile
- Building the scoring model not-based-on existing customers, but on the desired account, you've yet to convince.
Nevertheless, establishing a quality account scoring mechanism isn't necessarily a walk in the park.
An accurate account scoring is potentially impossible to build due to the chaotic nature of the world. There is an infinite number of variables to take into account. Why should anyone develop account scoring as it doesn't necessarily provide correct answers?
An entirely accurate account scoring might be sales management's wet dream, but while we are waiting for a solution, it's possible to increase probabilities by building and improving our organizational account scoring structures.
An entirely accurate account scoring might be sales management's wet dream, but while we are waiting for a solution, it's possible to increase probabilities by building and improving our organizational account scoring structures.
The answer to the question is Account Scoring worth trying, depends on the willingness to invest time and resources in building one that yields results. Carefully constructed, account scoring is definitely worth the effort, and it will save the time of the salespeople as there are less contacting unworthy accounts.
One could argue as well that salespeople will have higher morale negotiating with organizations that are - according to available data - more fitting for the service provided.
The most important things at this stage:
- Perfect account scoring doesn't exist due to the chaotic nature of the world
- A well-built account scoring machine increases the odds...
- ... but isn't bulletproof.
- Using account scoring will increase salespeople's morale as prospects are – according to data - interested in the service offered.
What is the difference between lead scoring and account scoring?
Simply put, whereas lead scoring ranks contacts in order based on their likelihood to become a customer, Account Scoring focuses on the organizations' likelihood to become a customer.
Especially in B2B, using Account Scoring makes sense as an individual person rarely makes the purchase decision individually. The current company situation has to be taken into account, as well as stakeholder opinion, technologies already in use, financial situation, and future events. Therefore, emphasizing Account rather than Lead Score alone in B2B business is a pretty smart move and enables sales and marketing to spend resources more efficiently.
To make things simple as possible, here's an example with two sales directors from separate organizations:
1. The first sales director is very enthusiastic about your product, goes through all your content, attends several webinars, downloads eBooks, and requests for a demo. Based on lead scoring, it's a perfect match! However, his organization is currently going through layoffs, pulling out from international markets, and doesn't have any budget to spare. Despite the excited sales director, there's little chance of a deal anytime soon.
2. The second sales director is aware of your product but has only subscribed to your newsletter. However, his company is actively investing in web technologies, hiring new employees, and has emitted buying signals announcing new markets, product launches, and new head of sales. The second sales director isn't THAT excited, but for their organization, investing in the product makes a lot of sense!
A quality client is not always an easy catch, OK?
- I get it now! But is it possible that Lead and Account Scoring affect each other?
Variables used in account scoring can affect Lead Scoring and, concurrently, variables used in lead scoring can affect account scoring. For instance, the number of individual contacts from an account, or the last visit from a contact associated with a company, can be variables in Account Scoring even though they are actions of an individual. Simultaneously, the number of employees, used CRM, revenue and location can be attributes in lead scoring even though they are related to an organization.
Variables used in account scoring can affect Lead Scoring and, concurrently, variables used in lead scoring can affect account scoring.
Bonus tip: Some might call a positive organizational event – which affects account score – a lead. At Vainu, such an event is generally referred to as a buying signal.
In the next chapter, we'll dig into how to create your very own organizational account scoring template.
Peachy. 🍑
The most important things at this stage:
- Account Scoring refers to ranking a whole organization, all things considered
- Lead Scoring refers to ranking an act of an individual, all things considered
- Lead Scoring might affect Account Scoring or/and the other way around.
- Following only Lead Score might lead to a situation where the prospect organization is not ready to buy despite an excited individual.
How to create an account scoring template?
Account Scoring template is - in this example - a manually filled Google Sheets document. There are more advanced ways to do account scoring, but for the sake of accessibility, we'll use a method that is available for every reader and not reliant on specific software.
Creating an account scoring template - as a technical achievement - is not difficult. The challenge lies in choosing which variables will eventually affect the probability of gaining the account as a customer. It's a job that we're not able to do for you, at this time, but we can help you in building the structure.
Creating an account scoring template - as a technical achievement - is not difficult. The challenge lies in choosing which variables will eventually affect the probability of gaining the account as a customer.
The 5-step guide to building an account scoring template
A search engine is a tremendously powerful tool for finding relevant information, but it can't predict what a user wants to find without input. The same goes for any account scoring structure. It requires users to state their will. Here's a quick guide on how to build your own accounts scoring machine from scratch.
1. Define the Ideal Customer Profile to know what's a ten
As discussed earlier, Account Scoring starts with carefully defining an ideal customer profile (ICP). It's the definition that'll determine the success of the scheme. If setting the ICP fails, the scoring of accounts will go in the wrong direction. It's like trying to find images of horses on a search engine but typing "llama" on the field.
Now, if the scoring is from 0‑10 and perfect ten would be = ICP.
2. Find the essential components of the ICP
The ICP is defined, but there's no guarantee of which components affect the value of the prospect. Finding the components is potentially the least fun part of this, but crucial for the success of the account scoring project.
Components could be things such as revenue growth, headcount, or a specific buying signal.
3. Weigh the components
Not all components of the account scoring scheme are created equal. A specific element probably has a more significant impact on the value of the prospect than another element. For sales at your organization, a buying signal indicating a new office location might be a component that has the highest value. For another organization, a shear growth speed of the headcount might have the most significant impact.
Once you've found the components that matter the most, you need to estimate the relative impact they have on the value of the prospect.
4. Build an Account Scoring template in Excel
...Or download the one we've created.
Building an account scoring template on Excel isn't too tricky, but it might require a moment or two to accomplish. Here's one we've created on Google Sheets, so you don't have to.
5. Use, evaluate and repeat
Every time you prospect a handful of new organizations, run them through the Account Scoring template. Your team can, for example, decide to call only the ones that get more than 5 out of ten to save time.
The weighting, the components, or ICP are not fixed. They're always best guesses and preferably under continuous development. Account Scoring requires evaluation and modification to reach perfection.
Final words
As stated earlier, a perfect account scoring scheme is as possible as a 100 percent accurate weather forecast. It decreases the possibility of getting hit by the rain, but the weatherperson can't really promise you anything.
As in weather forecast, account scoring is all about increasing the odds.
