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How To Improve Campaign ROI With Predictive Lead Scoring

Half the money I spend on advertising is wasted; the trouble is I don’t know which half.

This legendary quote still holds true for many marketers, even in the era of digital advertising. Despite the proliferation of online ad platforms and marketing measurement software with sophisticated campaign tracking and analytical horsepower, it remains incredibly difficult to assess the quality rather than the quantity of leads that each acquisition channel generates. Often, marketers have to wait weeks or months for sales cycles to progress before they know which of their acquisition channels produced the most pipeline rather than just the most leads.

Marketers instead need a solution that enables them to analyze lead quality from campaigns in near real-time so they can reallocate money to the best channels on the fly.

Predictive lead scoring can provide marketers with the visibility they need to make these decisions quickly, which will help them acquire leads that are the most likely to convert into pipeline. This, in turn, will help them optimize their acquisition strategy to align more closely with their sales teams — a transformation that goes far beyond the outcome of just one campaign.

Predictive Lead Scoring in Practice: How to Identify Your Best Channels

Let’s consider a specific scenario of how predictive lead scoring can help you optimize your acquisition strategy by identifying the best performing channels.

Say you’re a paid acquisition manager at a B2B telecom company, and you have a $50,000 budget for a campaign to create demand for a new subscription package. Your goal is to generate leads cost effectively using a multi-channel approach, but the primary KPI for your team is the number of marketing-sourced opportunities that the campaign generates. That means you need to focus on not only the raw quantity of leads that your campaign is creating but also the quality of those leads and how many are converting into opportunities.

You decide to use $20,000 to test four channels and then use the initial results to identify the top two channels where you should spend the remaining $30,000 from your budget.

Your team gets to work and decides to spend the initial $20,000 in the following ways:

predictive-acquisition-use-case-campaign

If your company’s sales cycle lasts more than a couple weeks, however, you would likely find it difficult to evaluate the initial results using any metric related to opportunities or pipeline. By the time you needed to invest the remaining $30,000 from your budget, you would still have an incomplete picture of how the leads you generated are moving through the funnel.

As a result, you would likely look at the number of leads generated from each channel and reinvest your money according to that outcome:

improve-campaign-ROI-predictive-scoring-1

Based on these results, you would decide to double down on Google ads and sponsored content because of the high volume of leads they’re generating and their low CPL.

With predictive lead scoring, however, you can go a level deeper when analyzing the best acquisition channels. You can score the leads you acquire from your initial test campaigns in almost real-time and identify how many Tier A leads each channel is generating. Tier A leads are the ones that are predicted to be the most likely to convert into opportunities, which is your marketing campaign’s ultimate objective.

The results from this analysis may be very different from the conclusions you draw without predictive lead scoring.

improve-campaign-ROI-predictive-scoring-2

In this scenario, you can see that a far higher proportion of the leads from direct mail and Facebook are likely to convert into opportunities. That means even though those channels generated fewer total leads than sponsored content and Google, you’re likely to maximize the number of marketing-sourced opportunities by doubling down on direct mail and Facebook.

This insight can help you allocate the remaining $30,000 in your campaign budget more effectively. Without visibility into which channels produced the most Tier A leads during Round 1 of your campaign, you would likely have to fall back on the number of total leads that each channel generated when making a decision about how to invest your money for Round 2 of the campaign. As a result, your campaign would be optimized for leads rather than opportunities.

With predictive, however, you can identify and prioritize the channels that produced the best leads in Round 1 of your campaign — direct mail and Facebook. This will enable your team to double down on those channels and build alignment with your sales team by executing a campaign that produces leads that are qualified and worthy of follow-up.

In fact, assuming a 30% lead-to-opportunity conversion rate for Tier A leads and a 10% lead-to-opportunity conversion rate for non-Tier A leads, if you were to reallocate your remaining $30,000 budget on direct mail and Facebook instead of sponsored content and Google you could increase the marketing-sourced opportunities from your campaign by 18% and reduce the cost per opportunity by 15%!

improve-campaign-ROI-predictive-scoring-3


Here’s an in-depth breakdown of the scenario:

Campaign Round 1

The first round of your campaign will be the same with or without predictive — this is the “test” period when you spend your money evenly across channels to gather results.

improve-campaign-ROI-predictive-scoring-4

*Assuming 30% Lead-Opp conversion rate for Tier A leads and 10% Lead-Opp conversion rate for non-Tier A leads

Campaign Round 2

This is when predictive can make a difference. Without predictive, you would only know the number of leads generated from Round 1 of your campaign and would want to invest further in sponsored content and Google ads. With predictive, you can optimize for the channels producing the most Tier A leads — Facebook and direct mail.

improve-campaign-ROI-predictive-scoring-5

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Put Predictive Lead Scoring to Work Throughout the Funnel

As you can see in the scenario above, rapid insights about lead quality from predictive lead scoring can help marketers run more cost-effective and revenue-oriented campaigns. This is only one way that predictive lead scoring can improve efficiency and alignment across marketing and sales, however, and you can find out more about other use cases by checking out our predictive lead scoring playbook below.

predictive-lead-scoring-playbook

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