MQL vs SQL: Everything You Need To Know

Understanding how incorrectly qualifying leads affects your sales cycle

Whether you’re a newcomer getting into sales for the first time or a seasoned vet, you’ve likely come across discussions on MQL (Marketing Qualified Lead) vs SQL (Sales Qualified Lead). After all, a ‘lead’ is one of the most crucial entities for any business, every sale starts with a lead, even more so for a B2B business.

The discussion of MQL vs SQL is a common area of disagreement between marketing and sales; most people believe they are separate, but at Growthonics, we believe they both add value in the funnel. If marketing and sales can agree upon a seamless hands-off process, they can process more leads.

According to HubSpot’s report, 63% of marketers said that generating traffic and leads are their top challenges, and even when they do generate leads, they find it difficult to tag those leads for a salesperson to convert. This could likely be due to the confusion between SQL and MQL.

What is a Marketing Qualified Lead?

An MQL is deemed a prospect that our marketing team deems more likely to eventually turn into a sale, but isn’t quite ready to buy yet. For example, an MQL might have voluntarily submitted some information and showed interest.

MQLs are receptive to buying into the brand and receiving additional marketing, but they need to be nurtured. Don’t force them into buying, slowly reel them in.

Common examples of MQLs include: Downloading a trial, voluntarily filling out a form, requesting further information, adding shopping items to your cart, and spending a lot of time on a site.

What is a Sales Qualified Lead?

An SQL is further along in the sales funnel and has already been qualified as a potential customer. SQLs have displayed an intention to buy, and have met the qualifying criteria based on their lead score rating. 

This determines that they are right for the product or service. The prospect has moved past the initial engagement phase and requested a call. 

These tend to be your warmest and best leads to go after, the customer is ready to make a purchasing decision and really just needs to be convinced into a sale.

MQL and SQL depend on each other

Consistent collaboration between marketing and sales is key to any organisation’s success; if both departments are willing to collaborate, they are more likely to convert leads into clients. It shouldn’t be how can you improve your process to better mine leads, but rather how to successfully collaborate to allow for seamless transition through each phase.

Take this scenario as an example. Suppose your website is performing well, you’re generating traffic and this is bringing in great leads. Are we to stop here, or do we carry on? This is where leads enter the qualification process, and we start understanding the journey of transition from visitor to MQL to SQL.

The Lead qualification process

Visitor – An anonymous internaut visiting your website.
Lead – A visitor interacted with your website.
MQL – A lead showed significant interest in your solution.
SQL – A sales rep has qualified this lead.

How MQL and SQL affect the sales funnel

An unclear understanding of MQL vs SQL can affect your bottom line. You need to be able to categorise and score your leads correctly. Over 90% of MQLs never convert to SQL’s due to incorrectly qualifying the leads.

Sending all your leads to your sales team without effectively qualifying them will only create a backlog, and waste time and resources finding out if the prospect is actually interested in buying into your product or service.

Correctly identifying which lead belongs where and when to contact them speeds up operational efficiency – now your sales team can fully concentrate on closing.

Hot leads need to be taken advantage of, or they will just end up signing up with competitors. Understand that although your customer might have an interest in your service, you need to separate interest and intention of buying from the onset.

How an MQL becomes an SQL

If your average buyer’s journey is long, and your marketing efforts are generating leads, but few seem to be converting into actual sales, you might find it necessary to improve your sales funnel. MQLs are very curious leads, they are those individuals in the indecisive stage that are interested, but aren’t quite ready to commit. On the other hand, SQLs are individuals who are closer to the ‘decision stage’, and have already been vetted and deemed ready to convert.

Throughout the lead qualifying process, the most important part of your lead conversion process is about delivering relevant information and support to your prospect at the right time; if not, you run the risk of inundating your prospect with content they aren’t ready for. Your goal at the end of qualifying your leads is to maximise your MQL to SQL rate, and ultimately match that with your sales conversion rate.

For a lead to proceed to the next phase, they need to undergo a process that accepts the lead. SALs (sales accepted leads) are leads that have passed certain acceptance criteria but that need further qualification, usually a Sales Development Rep, before being accepted by an Account Exec as a SQL. In many cases, companies have lost out severely due to leads being incorrectly allocated.

Wondering why this step is necessary? According to Marketo, over 61% of marketers hand over leads to their sales teams, where only 27% are qualified. There is a huge discrepancy in data highlighting why it is imperative to have a lead qualifying tool.

Why is Lead Scoring important?

Lead scoring is based on several qualifications. You can either qualify a lead through contact properties or by action. Different types include demographic location, company information, online behaviour, email engagement and subscription status, and social engagement.

Lead scoring is essential to strengthening your revenue cycle, but can only be effective if sales and marketing are on the same page. It assigns a value to each lead based on the information they have provided and how you engaged on the website.

Lead scoring is important as it saves your organisation time, money, and resources from bothering non-interested parties. It identifies which leads require more attention and nurturing from our marketing team, whilst easily allowing your sales team to identify which leads are ready to enter the decision phase.

Lead scoring example:

Most companies use the lead scoring chart to rank their leads and allow them to segment their targeting. Using MQL and SQL systems help with seeing whether a lead is ready for a conversation or not. If you aren’t using the system yet, you can use it to maximise your sales conversations.

For example:

1 point would be allocated for visiting a website,
10 points would be allocated for filling out a form.
50 points would be allocated for requesting a demo
As the leads come in, a lead qualification software awards points to each prospect, the prospect is classified as an MQL or an SQL. As each lead has a numerical value, you can categorise them in order of highest priority to lowest. SQLs tend to have a higher rating than MQLs as the prospect is already interested in purchasing and doesn’t need to be nurtured.

How can a company increase its MQL to SQL conversion rate?

Ensure your marketing and sales messaging are completely aligned.
It is important to ensure that the core values and key messages remain consistent all the way through the sales process. If a sales team shares inconsistent messaging, it can create confusion, reduce credibility, and reduce the conversion rate.

Personalise your communications.
Targeting the right prospects only enhances your business, no salesperson wants to go into a meeting with an unqualified prospect, it is just a waste of time. The key is to enrich your prospect with relevant information at the right time and not just bombard them with information. Maximise the opportunity you created with this meaningful connection and leverage that power. Most importantly, allow your prospect to go through the sales process naturally and not by force.

Use a CRM system
Using a CRM system allows you to store and categorise all of your leads in one place, you can efficiently manage and track the progress of each prospect’s sales cycle.

Refine your lead scoring metrics
What other factors could play a role in leading to a higher quality sale? It is likely that refining your lead scoring metrics will require working closely with your sales team. What could you do to refine your lead scoring system? When you take time to reflect and refine each part of your process, you gain further insight into your prospect and how you can help.

Always remember success stories
Prospects will feel reassured by others’ success, they will have an easier time signing up when they know the product or service works. You may already be touting these success stories in your marketing messaging, but ensure your sales teams shout your successes until the end.

Lead quality over lead quantity
Lead quality is the holy grail in outbound marketing. Higher quality leads tend to yield a higher propensity to convert. On the other hand, high quantity leads generally mean a lot of awareness, but lack of interest in purchasing the product resulting in low conversion rates.

Overvaluing and undervaluing leads
Beware of hanging onto suspects and pushing them further down the sales funnel. Let the prospect be in charge of making a decision, they need to be nurtured to be able to convert them into using our services. Being a supportive crutch, pointing out their pain points, and guiding them through the process seamlessly is the right way to go about it. If you are too pushy, you’re likely to chase them away then close a sale.

Don’t overcomplicate it

It might not be easy to spot the exact difference between an MQL and an SQL, but it is pretty straightforward. Both are considered to be qualified leads, an MQL simply put, requires additional marketing and nurturing and an SQL is ready for a sales call.

Understanding the fundamental difference between the two and how they work together is key to achieving efficiency within your organisation. A smooth transition between sales and marketing equals greater revenue in the long run.

You want to be tracking your insights into what’s working – what brings leads in, is your sales team having meaningful conversations, and how likely they are to convert? It takes trial and error, but they need to align, and getting them to work in unison will set your company apart.

Book a call with Quantanite today to learn how we can support your business growth.

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