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MQL vs. SQL: What’s the Difference and Why Are They Important?

MQL vs. SQL_ What’s the Difference and Why Are They Important

Lead generation is a top priority for businesses.

However, how efficient it is, depends on how you approach it.

If you just build up leads and feed them into the pipeline without a systematic approach, you risk wasting enormous amounts of time and resources chasing after potential customers that will never convert.

To avoid this, you should consider segmenting and qualifying them.

In this article, we focus on marketing qualified leads and sales qualified leads, also known as MQL and SQL. We’ll answer important questions such as what’s the difference between them, why are they important, and how to convert MQLs into SQLs.

Read on to find out!

Why Is Lead Qualification Important?

Before we delve into the definitions and differences between MQLs and SQLs, let’s first establish why differentiating between the two is important.

The Issue

Imagine that you have an average of 10 leads per week that show interest in your business. They come to you as a result of the efforts of your marketing team via different sources. These could be opt-in forms, social media, advertising campaigns, content marketing, and so on.

The marketing team forwards the leads to sales, and your reps call each one of them to check whether they are interested in becoming clients.

So far so good, no?

Now, imagine that one week you have 100 new leads, or 1000. It’s impossible for your sales team to reach out to all of these people without becoming overwhelmed by rejections.

The Issue

Before you know it, your reps will be tired and incapable of paying due attention to even the best of leads.

That’s why you need lead qualification.

The Solution

By using different techniques such as segmentation, lead scoring, nurturing, and prospecting, your sales and marketing teams can group and prioritize their leads. They can assess how good a match the client is for the business. Also, your teams can determine if they are ready to make a purchase or not, and other relevant factors.

As a result, the sales team can focus on the most eligible leads first and show off their best salesperson game.

This results in better productivity, more closed-won deals, higher-quality clients, and, are ultimately, a better bottom line.

Meanwhile, the marketing team can nurture the less qualified leads until they become ready, and only then forward them to sales.

All in all, the pipeline is more efficient and your team is more motivated because they see results.

The Good News

Lead qualification is a complex and tedious process as it involves checking each lead one by one to assess whether or not it is a good match.

The good news is that if you have a limited number of leads, this can be done manually with great success. In fact, while studying your potential clients, you may discover new selling points. This way, you’d be able to identify ways to attract their attention, show them how to benefit from your product, and convince them to convert.

However, the more leads you have, the more difficult it becomes to get to know each client individually and personalize your approach.

Fortunately, there are a myriad of tools that can automate the process for you and help you qualify your leads at scale.

Now, let’s focus on MQLs and SQLs in particular.

What Are MQLs?

Marketing qualified leads, or MQL, are potential clients that have been reviewed and assessed by the marketing team and confirmed to be a good fit.

More often than not, MQLs are warm leads – i.e. they are aware of your business and have shown some degree of interest in it. However, occasionally, cold leads can also be qualified as eligible MQLs based on their business profile and additional factors. These could be industry, pain points, product demand, competitor engagement, etc.

Regardless, depending on the qualities and behavior of the lead, the marketing team will need to judge whether they should go through a nurturing process or be directly forwarded to sales.

How to Identify MQLs?

How to Identify MQLs

Usually, this assessment is based on a number of relevant factors, including, but not limited to:

  • Does the lead match your buyer profiles?
  • Is the company the type of organization that you normally do business with?
  • Is the company/potential client experiencing a pain point that you can solve?
  • Can the lead directly benefit from using your product or service?
  • Is the potential client aware of the existence and properties of the brand/product?
  • Has the lead shown any interest in your business/product (website views, email engagement, social media engagement, etc.)

How to Qualify MQLs?

The most commonly used way to MQLs is lead scoring.

The process is usually automated, but in order to be efficient, the preliminary work on setting up the tool needs to be implemented manually in collaboration between the marketing and sales teams.

They have to pick the right criteria and actions that move the leads closer to conversion. Based on them, both teams have to define the attributes that go into the lead score.

Furthermore, these attributes need to be prioritized and quantified – each action should equal a preset amount of points depending on how important it is in the qualification process. For better accuracy, there also need to be criteria that show the potential client is not a good fit, and move them away from the top score.

If the process is properly set up, the leads that reach the 100-point mark will be ready to be forwarded to sales for further processing.

What Are SQLs?

What Are SQLs

Sales qualified leads, or SQLs, are the potential customers that the marketing team has approved to be a good fit. They have successfully passed the nurturing process and/or have shown with their behavior that they may be interested in becoming clients.

The marketing team forwards the SQLs to the sales department together with all the pertinent information. This includes touchpoints and interaction history, and relevant notes that may help with the sales process.

If the company uses CRM, all this information can be found in the customer’s profile with a detailed log of their customer journey so far.

Once the sales teams receive the qualified leads, they assess their status to decide what steps to undertake.

More often than not, the best course of action is to conduct client prospecting.

When prospecting for sales, reps conduct their own qualification of the leads and rate them based on exactly how ready they are to convert.

The sales team may conduct further research to find out as much information about the potential client as possible. This can include:

  • Business profile details.
  • Position within the company, level of responsibility, and decision-making status.
  • Pressing pain points and problems.
  • Attitude toward the potential purchase.
  • Status of the organization.
  • Things in common with the contact person – can be leveraged when breaking the ice and building a connection.
  • Interests, social media platform activity, industry communities activity, etc.

The salesperson needs to first complete their research. Based on it, they can determine when and how to execute the first contact with the SQL, and what sales script to use.

Difference Between MQL and SQL

Difference Between MQL and SQL

The main difference between a marketing qualified lead and a sales qualified lead is their buying intent, i.e. how ready they are to make a purchase.

Identifying, gauging, and cultivating this intent is the quintessence of the lead qualification and nurturing process.

That’s why it’s so important to track and study customer behavior across different channels. Use diverse techniques to understand what it means and what it can tell you about their willingness and readiness to commit.

That said, the tell-tale signs that differentiate MQL and SQL leads are unique to every business. They may depend on the type of industry and product, your sales cycle length, and the types of clients you work with.

How to Tell Between MQL and SQL [Examples]

To clarify the difference between MQLs and SQLs and how to tell between them, let’s have a look at two examples:

Example 1

Let’s say you provide expensive products and services, such as luxurious products, corporate financing, security software, etc.

These types of solutions have longer sales cycles and require more research and consideration from the client.

Therefore, even if a lead requests a demo or a trial, this may not mean they are ready to make a purchase. They may be browsing their options but, for instance, lack the necessary budget, at the moment.

Are they an MQL or an SQL?

To find this out, you need to cross-reference their behavior with their profile and additional information you have about them. This way you can decide whether they are an MQL that needs nurturing or are they eligible to become an SQL.

Example 2

In this scenario, you work with mid-market or enterprise clients and your lead’s behavior shows that they are excited about the brand – they engage with your product pages, review pricing, follow you on social media, etc.

They seem like a promising SQL, right?

Well, it depends.

In these types of large organizations, the decision-making process is quite complex. More often than not, it requires the approval of a group of stakeholders at different levels.

This means that your contact person may want the product and be willing to buy it in a heartbeat. However, all the nurturing in the world won’t change the fact that they are not the person in charge, or that they need five more people to close the deal.

To qualify the lead as an MQL or SQL, you need to research your contact person. Are they authorized to make purchasing decisions? If not, you will have to focus your efforts on a higher-level executive. You may even reach out to the lead to work together to convince them.

In other words, in this case, if the contact person is a decision maker, you have an SQL and can proceed with prospecting or a sales call.

If they are a lower-level executive or have to convince other council members, your contact is an MQL. Whether they can become an SQL or not, depends on their organization’s viability as a client. The buying intent of the rest of the decision-making party is the other important factor.

MQL to SQL Conversion

The MQL to SQL conversion process is the so-called lead nurturing.

Depending on the in-house organization of the company, it can be conducted by the marketing department or the sales team, or it can be a group effort.

Approach 1: Divide and Conquer the Marketing Funnel

Usually, marketing starts with nurturing the customer in the early stages of their journey by raising awareness about their needs and offering possible solutions.  This way you subtly introduce them to the brand and the corresponding product as a viable choice.

This way, they can usher the potential customer through the awareness and consideration stages of the marketing funnel, and prepare them for the next step.

MQL and SQL follow each other – if the MQL lead reaches the final stage of the funnel, they become an SQL or a prospect and the sales team takes over.

Approach 2: Marketing and Sales United

In organizations that practice account-based marketing and pipeline marketing, the sales and marketing teams work together on the whole nurturing process, in order to align their efforts and ensure a consistent user experience.

This way, each viable MQL can be converted into an SQL. At the same time, the reps can be in the loop and know how to approach leads in the best way. As a result, they can easily convince them to become clients.

However, keep in mind that how long it takes for the lead to convert from MQL to SQL does not depend only on the average duration of your sales cycles. Also, it is based on the individual case of the potential customer.

Some leads are harder to crack and may need a lot of nurturing to make a decision. And if you rush the nurturing process, they may never convert.

Bottom Line

Lead generation is an important part of growing your business. However, in order to be efficient and have a high ROI, you need to do it smartly.

By implementing lead qualifications, you can segment your potential customers. This depends on how ready they are to make a purchase and approach them as MQLs and SQLs accordingly.

This way, you can increase your bottom line. Also, you’ll ensure that you prioritize the best leads that have the highest potential of becoming loyal long-term customers.

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