MQLs, SQLs & KPIs: They Need Each Other More Than You Realize
For a business to be successful, its sales and marketing teams must work hand-in-hand to develop optimal strategies, processes, and best practices.
To do that effectively, they first need to clarify and set expectations about what each team will bring to the effort. After all, for teams to work together well, deciding on common objectives—and KPIs—can be extremely valuable.
In this article, we take a closer look at the essential metrics to support this collaborative effort.
To Get Started: What is a Lead?
As you can imagine, lead-generation is absolutely critical to the success and sustained growth of any business. You can think of it as the first step in the sales process or the starting point of your prospect’s sales journey.
So, what is a lead? A lead is basically an unqualified contact—someone that has provided at least some basic information to you suggesting that they might have an interest in buying from you.
While the person might show an interest in your product or service, you don’t yet know their background or their motivation, let alone when the sale is likely to close. In fact, you probably don’t have any other information about your lead beyond their name and email address.
The most common type of leads come about when someone clicks on your site and then enters their contact data into a data entry form, such as a contact form. Such leads are usually generated en masse. Indeed, the campaigns are aimed specifically at target audiences through social networks, emailing campaigns, integrated campaigns, and so forth. From these actions, someone has most likely clicked on your website and provided some contact information.
That’s why, once you have the lead in hand, the primary goal is to get more information about them. And to do that, you must get them to communicate and exchange with you—bilaterally—and convert them into a prospect.
Sometimes you’re lucky, though, and also have information about their age, occupation, gender, and place of residence.
Quick Definitions of MQL and SQL
What is an MQL?
The moment a lead shows a genuine interest in any of the contents of your marketing automation strategy, he is an MQL—a marketing-qualified lead.
What is an SQL?
Each action that a lead takes gives you the opportunity to collect information about their habits and needs. As you do, and as your sales team reviews their potential, they become an SQL—a sales-qualified lead.
How to tell MQL and SQL apart?
You have to know how to differentiate a curious stranger from a visitor who shows a true interest in your products or your business. How do you do that? By doing tests! Include the new lead in your Lead Scoring strategy. Does he open your emails? Add five points. Did he download any of your content? Add 10 points! Has he signed up for one of your upcoming webinars? Jackpot!
How to turn MQL into SQL?
It’s a good thing, of course, if your lead is interested in your marketing content, but your primary objective is to turn them into paying customers. And for that transformation to occur, your marketing and sales teams have to be well-coordinated.
When a prospect begins to take advantage of the brand content in your marketing automation campaigns, they leave behind their “prospect” status and become an MQL. Then, if your lead nurturing and marketing automation campaigns are well-tuned, the next step shouldn’t be complicated.
Once a lead is identified as an MQL, they land in the sales team’s territory, where the sales team can analyze the data provided by the marketing team. Sales will usually use their own scoring criteria. They can, for example, choose to prioritize the leads that have already filled a basket or the leads that have already purchased a product—and offer them an associated service.
Then, from the moment a lead has passed the test in the eyes of the sales team, it becomes an SQL!
Then it’s up to your salespeople to play. Calls, demos, quotes, proposals… It’s up to them to transform the qualified lead into a customer. We could just talk about MQLs and SQLs, but the ultimate goal is to get leads and prospects to move down the sales funnel. Of course, it might sound obvious, but closing a sale can be far from easy.
What Can Be Revealed with The Conversion Rates?
Each step of the sales funnel can be marked by a specific conversion rate and monitored with a relevant KPI to make sure that your sales process is working well.
Of course, the sales process will differ depending on whether you are dealing with prospects or leads. Logically, your marketing approach could not be the same for prospects and leads, either. But conversion remains a critical metric of the efficiency of the sales process.
A few other things can happen that can be adjusted if properly measured.
For example, marketing can generate more leads than the sales team can handle, or the quality of the leads could be too poor for sales to be able to work with. In the end, there are probably good leads out there, but it might take too much “manual” qualification effort to be worth going after them.
For its part, Marketing might not do a complete job. It might hand over leads too quickly without observing something like a “quarantine” period, during which it practices a little nurturing marketing. The idea would be to distribute more content (segmented and profiled) to these contacts to see if any interest is there, and to try to find out more about the person, for example, with progressive profiling.
The result is something like a prospecting funnel that looks like this:
Suspect> Lead MQL> Lead SQL> Opportunity> Customer
In the broad sense, it would include inbound or outbound online prospecting.
Successfully differentiating MQLs from SQLs necessarily requires a well-thought-out lead-scoring strategy.
Lead Scoring To Manage Your Pipeline More Efficiently
Lead scoring is a method of assigning ratings to leads based on criteria that is specific to each company. The score is an indicator of the lead’s degree of maturity and therefore makes it possible to know at what stage of the conversion funnel it is located. This way, each team knows exactly what role it has to play to best support this lead in its buying cycle.
To set up an efficient lead-scoring practice, sales and marketing teams need to first agree on exact and concrete definitions of MQLs and SQLs. Then, they will need to determine what criteria to use to assign ratings to the leads.
These criteria can differ drastically depending on the company, their sector of activity, their positioning, and so forth. The easiest way to do this is to start from the history of your old leads. Identify the common threads between the leads that have become customers and those that have not.
Each lead will be assigned a rating that depends on the criteria selected and their degree of importance and which will reflect the level of knowledge you have of the prospect and the degree of commitment the lead has to your company.
All of this data is compiled in a system that must be shared by the marketing and sales teams. That way, it becomes easy for everyone to access follow-up to the qualification of leads, and prioritizing leads to be processed can be facilitated. The result: Hot leads are guaranteed to be contacted quickly, maximizing the conversion rate from leads to customers.
Our team can help you understand the mysteries of ‘smarketing’—Sales + Marketing.
Marketing and Sales Alignment is The Cornerstone of Successful Lead Qualification
#1 – The breakdown of common objectives
Setting common goals for both teams is the basis of the SLA. For the strategy to be coherent and realistic, it is essential that the objectives are S.M.A.R.T.
Communication work around these objectives is also key: to be sure that teams are working in the right direction, the objectives must be known to everyone.
#2 – Details of the KPIs to follow
KPIs must be set globally for teams, on the basis of the S.M.A.R.T objectives selected, and will depend on the company’s ambitions, sector of activity, positioning, and so forth. As a result, the indicators will vary. Here are some examples:
- The goal of the number of leads to generate
- MQL conversion rate: (Number of leads / Number of MQLs) x 100
- SQL conversion rate: (Number of leads / Number of SQL) x 100
- Cost of acquiring a lead, an MQL, an SQL, or a customer
#3 – Concrete reporting methods
Having clear and precise KPIs is essential; being sure that they are followed is better. Developing an SLA is also an opportunity to put the terms of common reporting to marketers and salespeople in black and white.
This can involve more or less regular meetings, which will have the merit of promoting transparency and communication between the teams. If you don’t have a lot of time to spend in these meetings, the bare minimum will be making sure all teams have access to the numbers.
Sales and Marketing dashboard examples
You can also book a call with us if you need help defining your KPIs or building your sales/marketing dashboards, our team would be happy to help!