When business owners talk about leads, marketing qualified leads, or sales qualified leads, you need to stop them immediately and ask for a definition. Everyone will define these terms differently.
My husband and I have an inside joke from when we were first married. I used to call the pockets on the outside of a duffle suitcase “side pockets.” He would call them “end pockets.” We were forever getting into little arguments over how to find something in a suitcase when we were traveling because I would say “look in the side pocket,” and he would retort “I found it in the end pocket.”
Whenever I hear a business owner talking about leads, I’m always reminded of end pockets and side pockets. If you don’t define them, you’re probably talking about completely different things.
Understanding leads is critical for your revenue generation system to be successful. You need to know what type of lead you have so that you can qualify it and define your next step. Taking a broader, strategic view and having a clear definition of your leads allows you to measure where you’re being successful and where you need to adjust both your B2B lead generation strategy and your sales process.
So, let’s clear up all the miscommunication about lead types.
Here’s how to define leads, marketing qualified leads, and sales qualified leads.
What is the Definition of a Lead?
This is perhaps the most misused of the 3. People who have a list of cold contacts will call it a lead list. Meanwhile, at the other end of the spectrum, a contact with a fully qualified opportunity whom you’ve presented a proposal to will also be called a lead. Never mind if it’s an active opportunity or a stalled sales proposal that needs reviving.
Let’s clear up this confusion.
Suspects
A list of cold contacts you have had no communication with is not a lead list. It is your suspect list. These are contacts who are not yet qualified. You suspect they are the right contact. They are the right size company within your target market. You believe they could be qualified, but you don’t KNOW because you haven’t had any conversation or communication to confirm your suspicions. At this stage they are merely suspects you want to investigate and qualify.
You focus on building better email lists and digital marketing strategies to increase your top of funnel suspects for both sales and marketing.
Leads
Leads is a broad term for prospects that you have qualified in some manner. You may have had a conversation to qualify them. Or, you may have seen them take some action on marketing campaigns. They are both marketing qualified leads and sales qualified leads. It’s simply that big bucket of all the prospects that you want to engage with and qualify further.
In our how to cold call training, we hear a lot of confusion from salespeople, sales managers, and business owners around the term “leads.” This confusion makes it more difficult for sales reps to prospect because they believe any list is a lead list. This is simply not the case.
What is a Marketing Qualified Lead?
Marketing qualified leads are those contacts who have engaged with your marketing enough that you have determined they are ready for a salesperson to contact them.
How MQLs Engage
How these MQLs engage with you can vary based on your B2B Lead Generation System and the type of lead generation campaigns you are running. They may have:
- Completed a webform or Contact Us form
- Downloaded an asset from your website
- Opened and clicked on email campaigns
- Attended a webinar you hosted
- Called from a pay-per-click ad
- Contacted you from your Google Business page
- Attended a tradeshow
- Engaged on social media
Any way that contacts engage and you can track allow you to measure MQLs. The purpose of your lead generation campaigns is to give your list of suspects as many ways to engage with you as possible.
How Frequently Does an MQL Engage?
It’s typically not enough that a contact takes one action to reach MQL status. The only time a single action is enough to constitute a marketing qualified lead is when:
- they fill out a “contact us” form or
- they speak with you directly and that conversation allows you to qualify that, yes, they are interested in talking with a salesperson right now.
Because the very name “marketing qualified lead” has the word marketing in it, it means you don’t have a salesperson directly speaking with the prospect. Instead, you’re using a set of marketing activities to identify if this contact is someone who Sales should talk to. You want to see contacts engage multiple times to become an MQL.
When we build email marketing that connects with your prospects, and provide other digital marketing services as part of your revenue generation system, we use actions that both demonstrate engagement and capture information about contacts to identify MQLs and help your salesperson start a conversation more easily. Until your sales rep speaks with the contact, they are still a marketing qualified lead.
Do Salespeople Generate MQLs?
Salespeople speak with prospects when they’re doing prospecting campaigns. They have a list of suspects they are calling to uncover new opportunities. Because they are cold calling and speaking directly with contacts, they are able to immediately qualify if a contact is someone they want to meet with and set a first appointment. These contacts pass right by MQL status and move directly to SQL status once a rep has completed the first appointment.
Confused? Not to worry. I wrote a post that outlines when to use lead generation campaigns vs. sales prospecting to help you make the distinction and choose the right approach.
How Do You Know a Lead Is an MQL?
You use a formula to identify marketing qualified leads. This is known as lead scoring. Once a lead reaches the minimum score for an MQL, it becomes an marketing qualified lead and is passed to Sales for follow up. Here are 5 ways to convert marketing leads to sales opportunities.
How Do you Score MQLs?
If your sales pipeline is weak, you may score your leads very loosely and pass Sales MQLs who haven’t taken as many actions. Your sales team’s conversion rates won’t be great, but they’ll be contacting people who have expressed some type of interest. It’s critical that your reps’ cold calling skills are strong when you’re passing low scoring MQLs.
If your pipeline is full, you have the luxury of scoring your leads tightly. Tightly scored MQLs are more qualified. They have taken more actions, and it’s easier for your salesperson to connect with them. While your reps still apply cold calling skills to contact with high scoring MQLs, it will be easier to get responses and begin conversations.
We tailor our lead scoring to our clients’ pipeline and sales team needs. We use systems that allow us to track engagement across multiple marketing strategies and campaigns. No single lead-scoring formula is going to fit every company.
What is a Sales Qualified Lead?
Sales qualified leads are those prospects whom your salesperson has spoken with and qualified as a sales opportunity. Early in the sales process you have a defined set of minimum qualifications for a prospect to become a sales opportunity you want your salesperson to pursue. Prospects who meet the minimum are your sales qualified leads.
You set a strong MQL follow-up strategy allowing reps to convert more suspects into prospects. Then you coach salespeople to set appointments effectively. As your sales reps convert suspects, you generate sales qualified leads.
Should Sales Qualified Leads Be Forecasted?
You enter sales qualified leads into your sales pipeline. You designate them as opportunities being tracked in your sales forecast. These are defined as forecasted sales opportunities.
These opportunities may be early in the sales process, but once a salesperson has qualified them, they should be forecasted. This allows you to track your reps’ effectiveness.
As your salesperson works sales qualified leads, they will continually evaluate them and determine if the SQLs remain qualified to continue progressing through the sales process. Even if it’s determined a forecasted opportunity is no longer qualified, it started out as a sales qualified lead.
These procedures should be a core part of your sales process. When we are coaching clients through defining their sales process, we find they often have not considered the subtle difference between a sales qualified lead and a forecasted sales opportunity. This impacts their ability to optimize their sales team’s performance.
How Do You Measure MQLs and SQLs?
SQLs are measured at the beginning of the sales process. Whatever happens to that opportunity later in the sales process does not change that it was originally a sales qualified lead. This is important.
When you are measuring the effectiveness of both your marketing campaigns and your sales team, you want to be able to distinguish between marketing qualified leads and sales qualified leads.
- Marketing qualified leads measure the effectiveness of your marketing strategy.
- Sales qualified leads measure the effectiveness of your sales team in converting marketing qualified leads into the sales pipeline.
These two numbers help you identify where you need to adjust so that you can improve your overall sales results. Perhaps you need to refine your marketing strategy, which could be anything from your target market to the activities to your implementation. Perhaps your sales team needs training, you need to hire, or you need to define your sales process more clearly. Maybe you have to begin at step one with a sales and marketing plan template.
Measuring your marketing qualified leads and sales qualified leads gives you the insights you need to make your revenue generating system the highly productive machine it needs to be so that your company can achieve the goals you’ve set for it.
Improve Sales MQLs Conversion Rates
In our client Results Review Meetings, we examine both MQLs and SQLs to determine the ROI and necessary strategy improvements for marketing and sales. You should be doing the same.
You work hard to generate leads. Don’t let confusion about what is a lead, suspect, prospect, marketing qualified lead, or sales qualified lead keep your sales team from following up appropriately and converting MQLs. Valuable leads will be lost, and that doesn’t have to happen.
If all the end pockets, side pockets, and lead types leave you feeling you need guidance for your sales or marketing, call us. We can help you put a system in place that works for your company with coaching, doing the marketing for you, and training your sales team. You don’t want to lose anymore leads!
FREQUENTLY ASKED QUESTIONS
What is the difference between a Marketing Qualified Lead (MQL) and a Sales Qualified Lead (SQL)?
An MQL is a lead that has shown interest in your marketing efforts and is deemed ready for sales outreach. An SQL is a lead that has been contacted by sales and qualified as a potential client.
How do I identify an MQL?
MQLs engage with your marketing through actions like filling out a webform, downloading assets, attending webinars, or engaging on social media. These actions are tracked and scored to qualify them as MQLs.
What criteria should be used to qualify a lead as an SQL?
An SQL is identified after direct contact by a salesperson. The lead must meet specific criteria indicating a potential sales opportunity, such as showing interest during a call or meeting certain qualification parameters.
Can a lead bypass the MQL stage and become an SQL directly?
Yes, during prospecting campaigns, salespeople may directly qualify leads through cold calling or direct engagement, moving them straight to SQL status if they meet the necessary criteria.
Why is it important to distinguish between MQLs and SQLs?
Differentiating MQLs from SQLs helps measure the effectiveness of your marketing and sales strategies, ensuring proper follow-up and optimizing the conversion process from lead to client.
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