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Complete guide to MQLs and SQL

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January 30, 2022 |

All of your marketing qualified leads (MQLs) would seamlessly transition to sales qualified leads (SQLs) in a perfect situation. However, you’re not likely to enjoy that kind of success without methods to qualify, score, and disqualify leads that will satisfy both marketers and salespeople. Your sales and marketing team should work together to develop a lead gathering and sales strategy.

Each one of these actions equates to a lead. Some of them will turn into marketing qualified leads (MQLs), then sales qualified leads (SQLs), and eventually, paying customers.

But it’s never that simple, right?

Marketing funnel abstract concept vector illustration. Internet marketing technique, sales funnel formula, product cycle, advertising system control, awareness conversion abstract metaphor.

The SaaS buying journey is one that’s littered with obstacles. The time between when a prospect learns about your solution to the moment they fill out a form could be weeks, even months. From there, it could be even longer until they’re exposed to enough additional touchpoints to finally agree to talk with a member of your sales team.

To complicate things further, not all MQLs are equal in terms of quality. This poses a problem for marketing teams that are primarily focused on generating MQLs.

Is MQL truly the most accurate measure of marketing value? Should SaaS marketers focus on SQLs instead?

Let’s discuss.

What is a Marketing Qualified Lead and what do they do?

A Marketing Qualified Lead (MQL) is a lead who has indicated interest in what a brand has to offer based on marketing efforts or is otherwise more likely to become a customer than other leads. An MQL is judged to be interested in your products and/or services, and you may offer a solution to whatever it is they need. 

An MQL has taken the first steps to becoming a customer and is primed to receive additional contact. From a very general perspective: Marketing Qualified Leads turn into Sales Qualified Leads (SQLs), which then turn into customers. While marketing efforts can bring leads in, the lead’s behavior is what prompts marketers to consider them an MQL.

What is Sales Qualified Lead and what do they do?

An SQL or Sales Qualified Lead is a lead your sales team has qualified as a potential customer. SQLs are in your sales funnel, and your team is actively working to move them closer to a deal. They’re at the end of the consideration stage and are moving into the decision-making stage of their buyer’s journey where they’ll appreciate sales-focused content and support.

Typically, a sales qualified lead is confirmed after an initial outreach call with someone on your sales team, who can determine how serious the lead is about your product, and how motivated they are to buy.

Difference between MQL and SQL?

The most important difference between MQLs and SQLs is the intent to buy. While there are other factors that will affect whether a lead is categorized as marketing or sales-ready, the biggest tip-off for marketers when deciding whether or not to pass a lead on to sales is the intent to purchase. That’s a surefire sign that they’re ready to talk to sales and tells you that passing them onto sales is the best way to serve that lead.

  • Top of Funnel vs. Bottom of Funnel Content Offers

An MQL is a lead who is downloading and converting on top-of-funnel content offers. They’re interested in information that teaches and educates about the general product you sell.

SQL, on the other hand, is going to download bottom-of-the-funnel content offers. SQLs are at the bottom of the funnel – they’ve already done the research, they already know they want a car, and they know which car they want. Now, they just have to figure out how to make the purchase.

  • First-Time Site Visitor vs. Returning Visitor

A first time visitor is a good example of a potential MQL. They’re just starting the buyer’s journey, and are working on gathering the information that will ultimately help them make a purchasing decision down the road.

A returning visitor, on the other hand, who has been to your site a few times, and is browsing key pages and downloading bottom-of-funnel content offers, is an SQL. 

They like the information you’re putting out enough to keep coming back. And if they keep coming back, they’re probably ready to talk to your sales team.

Why Differentiating Between MQLs and SQLs is Important?

Audience segmentation abstract concept vector illustration. Customer segmentation, digital marketing tool, target audience collection, targeted message, digital ad campaign abstract metaphor.

Determining an MQL from an SQL is an important relationship between sales and marketing. This initial step of differentiating one from the other is the ultimate foundation for the lead hand-off.

MQL refers to a lead that is more likely to become a customer compared to other leads based on lead intelligence and is usually conveyed by closed-loop reporting. 

This is tracked from looking at specific behaviors or level of engagement, such as website visits and content offer downloads.

Ideally, only certain forms should trigger a lead to the MQL stage, such as direct business offers and other sales-ready CTAs.

SQL is the next stage. This means that the sales team has qualified this lead as a potential customer. The SQL is in the buying cycle, while the MQL is not ready for that buying stage just yet. 

Once you know what differentiates the two, you can practice lead scoring, for instance giving higher lead scores to those who visited high-value pages, filled out high-value forms or viewed your site multiple times.

How Do You Move A Lead From An MQL To An SQL?

Knowing when a marketing-qualified lead has transformed into a sales-qualified lead has largely been a mystery. It’s mostly been a game of guess and test.

But some marketing and sales teams have gotten really good at it because they’ve been able to recognize some of the telltale signs – like a request for more information or a click on a call to action asking to speak with sales.

But this isn’t a foolproof approach. As buyer behavior changes, so do the signs indicating that someone is ready to move from MQL to SQL.

For example, even if someone asks to get on the phone with a salesperson, that doesn’t necessarily mean that this person is an SQL. This person could simply be looking for more information on a product, the specifications, or the benefits, and wondering about that information alone doesn’t necessarily mean someone is at the bottom of the sales funnel. 

Without being able to see the exact point in the customer journey, the magic that marketing and sales teams need in order to align with one another is often lost.

Marketers know that sales teams want to get involved only with qualified buyers who exhibit bottom-of-funnel activities. They want to be able to engage with prospective clients who have budget, authority, need, and a timeline. But it’s incredibly hard to differentiate those clients from incredibly active MQLs, right? 

But what if it doesn’t have to be? 

What if there were a way to see exactly when a marketing-qualified lead becomes a sales-qualified lead and even what kinds of activities indicate buying behavior?

The BANT method is one approach that can help marketing and sales teams decide which leads are sales-qualified. BANT stands for “budget, authority, needs, and timeline.” 

If a lead has a tangible need for your services, needs a solution like yours in place soon, has budget available, and has decision-making power (or can connect you with the person with this authority), this person is likely a qualified lead.

While the tried-and-true methods still work, my partner and I wanted to see how we could use AI and deep learning to more effectively differentiate between an MQL and an SQL and engage each accordingly based on their respective stages of the funnel.

By using a form of augmented intelligence called deep learning, these types of tools can make sense of all that customer activity to pinpoint exactly where prospective clients are in the customer journey. 

For marketers, that means knowing exactly how to engage and nurture leads throughout the MQL process, and knowing exactly when that prospective customer becomes an SQL. There is no more guessing and hoping. 

Moving from MQL to SQL is time-sensitive, and as a marketer, you do not want to miss that window. By having a good understanding of the buyer’s journey and qualification cycle, you can determine where leads are at and pass it on to the sales team accordingly.

Once the learned behavior says it’s time for the sales team to get involved, a marketer or a CRM can flag a lead as a highly qualified, ready-to-close SQL and pass it along to the sales team worry-free.

MQLs are the hand-raisers amongst the leads. Meaning, they are more engaged but not ready to buy or talk to a salesperson yet. Hence, you should be careful in choosing the basis, and only high-interest activities should trigger a transition from lead to MQLs. For example: revisiting product/services spec page, the pricing page, reading most of your emails, leaving items in the cart, etc.

While most of your time will be spent creating accurate metrics around MQLs, the transition from MQL to SQL is simpler to identify. It might look like signing up for free trials or setting up a discovery call with the sales personnel, or a similar activity.

You need to sit down with both the teams and draw the lead scoring metrics to eliminate all the “guesswork” from the cycle. You can make use of your marketing automation software to set up a lead scoring system that assigns a value to each action. These actions might involve website activity, the number of downloads, email activity, or social media interactions.

When is a Marketing Qualified Lead Ready for Sales?

MQL and SQL
Sales funnel. Lead generation, customer management, marketing strategy. Commerce conversion flat design element. Selling plan. Clients filter. Vector isolated concept metaphor illustration

Your buyers have a process for buying your product or service just like how you, the seller, have a process for selling. This buyer’s process is often called the buyer’s journey. When the buying and selling processes align, everyone involved feels good about the value of the transaction and the relationship.

Handing an MQL to the sales team requires trust and careful planning. It is like passing the baton to your teammate in a relay race.

You’ve run fast and beaten your competitor, and now you are preparing to hand over your baton to your mate who is waiting for you a few meters away.

There are several ways of evaluating when an mql becomes a sales qualified lead and is sales-ready. Here are a few of them.

a) If a lead is visiting your website several times in a given period, this means he is more likely to be ready to buy than passive visitors. He finds the information provided meaningfully and consumes it repeatedly.

b) A marketing qualified lead is sales-ready if he is filling out your form many times in a given period. This prospect is hot and ready to buy your stuff.

c) If Bob is arriving at the pricing page of your website, it means he is interested in buying your product. Whether the price point is ok for him is a different matter.

On the other hand, a lead that just visits your homepage and drops off is not your sales lead. At best, he is just another marketing qualified lead.

When is a SQL Ready for Sales?

The precise definition of SQL can vary based on what you’re offering and who you’re offering to. But there are specific reasons that stop consumers from purchasing. Many companies are using the BANT system when qualifying leads. BANT is the abbreviation for Budget, Authority, Needs, and Timeline.

Here is a brief breakdown of how to qualify leads using the BANT system:

Budget

Hand free icon

Ultimately, it is not about how much your prospects like your solution. If they can’t afford it, they are not qualified prospects. Selling with honesty needs the reps to determine if a prospect can really afford the solution. 

If they can, you should focus on them. However, if they can’t, or if they are not sure, there is an opportunity that there are much better customers to find instead.

Buying Authority

Auction free icon

Imagine that you have a SaaS product and are having a telephonic conversation with a prospect. The prospect is showing interest and is ready to schedule a demo. But does he have the authority to make a buying decision? Maybe yes. 

Yet odds are he will have to discuss with his management before he comes to a buying decision. He may love your tool. However, he is not the only one buying it.Also, deals need buy-in from a team of decision-makers before they can close. So even with those deals with only one decision-maker, the reps have to make sure they are talking to the right decision-maker.

Need

Customer free icon

The golden rule is to consider whether your product or service offers value to the prospects or not. Your prospects might have several reasons not to buy your solution immediately. 

For example, your product might be incompatible with a prospect’s current Salesforce infrastructure. So, prospects that don’t have Salesforce may have a need for your solution, but they cannot buy at that moment unless they start using Salesforce or your solution is compatible with their infrastructure.

Timeline

Timeline free icon

You may come across many prospects for whom it’s simply not the best time to close the sale. Perhaps the prospective company is waiting to get the funding. They may choose to recruit a wider team to incorporate a specific tool. Reps need to figure out what a prospect’s timeline is before turning the prospect over to the account executive.

What You Should Do with MQLs?

MQLs are the leads that aren’t in the buying mood yet, but they show they have a need you can help them with. And lead nurturing could be just the thing to turn them into more receptive buyers. Unfortunately, many companies fail to do so and consequently fail to reap the benefits that nurturing can bring.

It might take multiple visits before the opportunity ends up in your sales department. This time period is a great chance to handle objections, clarify some issues, and prove that you not only listen but also provide value.

Here’s how you can do that:

  • Understands Your Target Customers

Knowing your audience and customer is at the core of what makes B2B SaaS marketing so effective and results-driven. It’s not about how much you push what you have to say; it’s about working with your customers’ needs.

If you’d like to connect with your customers and build trust emotionally, your marketing strategy needs to be designed around your customer’s pain points, what they value much more than just features of the product, as well as their preferred information gathering process.

The following are a few questions that your B2B SaaS marketing team can ask:

  • What attributes do my best and worst customers have in common?
  • What are their content choices, search terms, social media accounts, and the products or services they buy?
  • Who is my ideal customer at the top, middle, and bottom of the funnel?
  • Create Relevant Content.

You need to create engaging content regularly, so your leads don’t forget about you. Your content can be in any format – blogs, infographics, press releases, case studies, email chain, or downloadable resources like a whitepaper, ebook, guide, datasheet, etc. that brings value to your audience.

Digital marketing team with laptops and light bulb. Marketing team metrics, marketing team lead and responsibilities concept on white background. Pink coral blue vector isolated illustration

Here are few examples for your B2B SaaS marketing team:

  • Top of the funnel: In this stage, new prospects will be introduced to your brand and, if you are lucky, they will begin to engage with you. Likewise, you can create educational content like blog articles, videos, and social posts to boost SEO efforts.
  • Middle of the funnel: The middle of the funnel is where your leads decide whether or not your company’s products are worth investing in. You can support their decision by providing product-oriented content like case studies, eBooks, and webinars.
  • Bottom of the funnel: Here the customers are more likely to convert. Help them skim the value of your product by making demo videos, sales pages, and discount campaigns.
  • Establish Your Definition of a Qualified Lead

Each company will define each lead type differently. You’ll want to work with your marketing and sales teams to define each lead type based on your product or service. 

It will help you craft an effective strategy that will likely lead to higher conversions. Also, it will make sure that everyone in your organization is on the same page when it comes to leads.

  • Find Out Where Your Leads Are In the Sales Funnel

Before you try to convert your leads into customers, you need to understand where they are in the sales funnel. There’s no point in chasing people who aren’t interested or moving further down the sales funnel too quickly.

When someone signs up for your blog or newsletter, they’re probably new to your brand. Long-form thought leadership pieces might be the worst thing you can show them. 

Use those opportunities instead to recommend tactical blog posts and helpful third-party articles.

Marketing Metrics

Cost per lead (CPL)

Before you can acquire new customers, you have to bring in new leads. Cost per lead measures the dollar amount of each new lead by campaign, channel, or overall spending. This sales and marketing metric helps users create better goals, track ROI, and adjust budgets accordingly. Budgets related to CPL include items such as paid ad placements and social media monitoring platforms. 

The total CPL equals the total dollar amount spent on marketing divided by the total number of new leads acquired in a given time period. Calculations like these are useful to do every quarter or, if you have the bandwidth, once per month.

Click-through rate (CTR)

Click-through rate is the number of times an ad, link, or website is clicked on compared to the number of impressions. High click-through rates (around 4%) mean the copy displayed is persuasive and well-placed. Once a user has clicked through, however, the rest of their experience has to line up with their expectations for taking the action in the first place. 

Paid ad platforms like Facebook offer this data for free within the platform. However, you can always use a calculator like the one created by WebFX by manually entering your total number of clicks and impressions.

Goal completions

Goal completions are also known as conversions and refer to any instance in which a potential customer takes an action you led them to. For example, clicking the CTA button at the bottom of a sales page or adding their email to a form to receive a downloadable piece of content is a goal completion. This marketing metric works well for measuring quantities at any funnel stage. 

The unit of measurement for a goal completion is different for every platform. In general, you can count on adding up the total number of leads who have taken an action you’ve either asked them or persuaded them to do.

Multi-touch attribution

Very few people research and buy during the same web browsing session. Most people will start their search for a product or stumble across a piece of content, click through to your website and poke around your blog. Then days or weeks later, search for your company name, click on a paid ad, and purchase. By only crediting the point of conversion, you’re not getting a full picture of the customer journey, and you’re undervaluing key aspects of your marketing efforts.

There are many types of attribution models you can use, depending on what you want to learn and how your marketing organization works.

Cost per acquisition (CPA)

CPA is how much you spend to get one new customer. This can vary by campaign, channel, and even time of year. Gather both marketing expense sheets and sales data to measure your CPA. It is then calculated by dividing your marketing spend (Campaign Cost) by the number of customers acquired (conversion). Here is the calculation:

CPA = Campaign Cost/Number of conversions

Customer lifetime value (CLV)

Customer lifetime value is the total dollar amount a single account or person is projected to spend on your business from their very first purchase all the way to their last. 

This calculation is based on your pricing model, any potential upsells on the horizon, and important forecasting data, such as historical records for similar customers. In marketing, CLV proves that quality is often better than quantity, so there should be some campaigns aimed at existing customers to retain them long term. 

How to measure it: Hubspot has a great calculator you can use, but if you’re old school, here’s the formula: CLV = Average Customer Value x Average Customer Lifespan.

Bounce rate

Essentially, bounce rate is the percentage of website visitors who look at one page then leave right after. Having a high bounce rate indicates that your content, copy, or offer aren’t keeping people on the site, which also translates to sales pipeline breakdowns.

First, figure out what marketing analytics is, and what information you need from your data. Website analytics tools like Google Analytics will automatically calculate bounce rate for you. The trick is to lower the percentage over time.

Rules for an Effective Lead Hand-off Process

The transfer between marketing and sales is time-sensitive. It will have a significant impact on whether a lead eventually becomes a customer. Put simply; time kills deals. 

Transfer leads too early, and your sales team will waste time with prospects who aren’t ready to buy and or are just not a good fit. Transfer to sales too late, you’ll likely end up losing deals to more timely competitors.

The criteria for delivering MQL’ should be evaluated continuously because your sales funnel requirements will need to adapt to your company’s changing needs as you grow and expand.

Define Handoff Requirements

76% of sales professionals surveyed considered timing to have “an extreme or substantial impact on converting a prospect to a customer.” 

To get that timing right, sales and marketing teams must identify the criteria that indicate readiness for the sales process and know when and how to hand off leads.

Your specific business will have unique criteria to address. However, many of the same criteria apply to all businesses.

Here are a few examples that we see many companies use to identify the ready and relevant leads for the sales process:

  • Job Titles 

In some cases, only the people in certain positions will have decision-making power when it comes to making an actual purchase. For example, it’s not uncommon for employees in junior roles to do initial research. Although their role is essential and you need to engage with them, some companies may decide that a lead must be a CEO or VP level.

  • Vertical Markets 

If you’ve done an excellent job defining your ideal customers and markets, you’ll know which verticals are the sweet spot for your product. Although there can be exceptions, it’s generally better to transfer leads to sales if the prospective company operates in one of the verticals your product serves best.

  • Geographies 

For various reasons; logistical, technical, legal, some locations might not make sense to do business. If you’re offering a physical product, this can be even more important.

  • Existing tech stacks 

If you’re selling software, integrations or dependencies can be significant sales-readiness factors. Ensure that integrations the prospect requires are ones that you can support.

  • Company revenue or employee count 

Even if an MQL seems to meet all the other criteria, an inability to pay is a hard disqualifier. You’ve probably noticed that essentially we are using a modified BANT (Budget, Authority, Need, and Timing) approach. We are just doing it earlier to deliver better leads to sales sooner.

  • Level of engagement 

In general, a lead is “ready” for handoff when their interactions with your website, emails, and content are happening frequently and recently. There is a ton of nuance here, including whether the interactions are with “high intent” content or not, what constitutes engagement, and reasonable recency and frequency thresholds.

Clear Criteria for Qualifying Marketing Leads

The sales team needs to be involved with helping marketing define what should be an MQL and how to hand off leads that have a higher purchase intent. Sales can even work with marketing to help develop messaging that emphasizes the use-cases and functionalities that they know from experience appeal to ideal prospects.

The importance of the alignment between sales, marketing and customer success/support cannot be overemphasized. This alignment is crucial; if there’s any disconnect between targeting, marketing qualification and sales qualification, the entire value chain is compromised.

Align on Sales Funnel Terms

It’s so important that everyone on your team is on the same page about the terms and definitions used throughout revenue-generating functions and processes. 

For example, “lead” generally means something different to Sales than it does to Marketing. That’s why many customer-facing teams use more precise terms to specify which type of leads specifically. 

Of course, each business may have its own definitions for sales funnel stages and how to hand off leads. Your team will have to decide on the terms and criteria that make the most sense to you.

Don’t Overlook “Sales Accepted Lead” Status

Overlooking the Sales Accepted Lead stage happens much too often. SAL is the stage between MQL and SQL. It’s what we call a “handshake stage.” During the SAL stage, the sales team can take a closer look at leads to assess their actual quality against predefined criteria.

There will inevitably be the occasional false positives in the marketing funnel. Some leads that seem like they should go to sales based on set criteria might not be a good fit.

Tips to Move More Leads Through the Sales Funnel

Qualify Sales Calls

Properly qualify leads 

Separating and grading the quality of your leads ensures marketing and sales spend time where it’s most impactful. It also gives you time to target the right campaigns and messages required to nurture cooler leads before handing them off to sales.

Every time an inquiry comes in, have a method in place to determine if they’re a good fit. This will require some upfront prep work; specifically, marketing and sales should agree on objective criteria to make these decisions. An initial phone call with the right questions can then obtain the necessary information.

Always define next steps

The best sales reps know that their role is just as much a consultant, educator and trusted advisor as it is “selling.” With every communication, take the lead and clearly define a call-to-action or next step; don’t leave it up to the lead to follow up with you or decide what’s next.

During a phone conversation, have an objective in mind, whether that means setting up another phone call, scheduling a web demo, meeting additional decision-makers or discussing pricing. With email communications, always include a clear call-to-action. Simply outlining the steps in your sales process helps move your buyer forward toward an ultimate sale.

Continue to nurture leads

When you do connect with a qualified lead, but they’re not ready to move forward, have a strategy to continue to nurture that potential business. Most companies stratify their leads in some way, such as A, B or C tiers or hot, warm and cool. 

The sales team actively works “A” or hot leads to close them within a short period of time. Marketing, inside sales or an outsourced call center then provide a steady, planned stream of communications to stay in contact with the “B,” “C,” or warm and cool leads until the time is right.

Solid approaches for Medtech and B2B usually include sending relevant content on a regular basis, using marketing automation tools and making periodic outbound calls to build the relationship.

Speak with the right person

Often, inbound leads come from individuals at all levels in the organization. This is especially true with inquiries from your website, events or purchased lists. In complex B2B or Medtech sales, these professionals may be gathering information, educating themselves or seeking ideas, without the authority to make a purchasing decision.

A first step in advancing more B2B or Medtech leads through the sales funnel is making sure you are working with a decision-maker or key influencer within the organization. While conversations with anyone in the business can be meaningful, it’s the conversations with those that feel the pain and make the decisions that are going to carry the most weight and keep things moving.

Share relevant information

One of the biggest mistakes B2B companies make with sales leads is a one-size-fits-all process. Today, most buyers conduct detailed research online before ever contacting your company. Leads will have very different levels of understanding of your product or service, and need specific follow-up information.

A marketing automation system can help customize your engagement strategy. But, even without this technology, simply taking the time to review your prospect’s interest level and clarify their needs and challenges will ensure you share the right details about your solution at the right time in the sales process. This increases the likelihood of moving a lead to the next step in your sales funnel.

Make several follow-up calls

How many times does your inside sales team reach out before marking a lead as dead? If it’s only one or two, it’s time to increase that number. Catching busy B2B decision-makers can routinely take 4-6 or more attempts. This doesn’t mean the lead won’t be worthwhile in the end.

Use CRM or call-tracking software to schedule follow-up calls automatically and keep lead nurturing attempts on track. Or, consider outsourcing this sales prospecting and lead nurturing work to a professional call center. Persistence does pay off.

Conclusion

Rather than MQL vs. SQL, businesses should adopt an MQL and SQL mentality. Marketing and sales have an equally important role to fulfill and the two lead types shouldn’t be compared against each other.

To avoid losing leads, qualification criteria must be outlined and adhered to, and leads must be smoothly handed off from marketing to sales. The better the collaboration between the two teams, the stronger the SQLs will be, and the more deals you can close.

admin

Never underestimate the power of passion. With over 17 years of experience in building internet businesses, 5 successful bootstrapped b2b brands. Sathish spends most of his time executing ideas into niche internet brands through a lean team and enjoys being a wanderlust.

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