Defining and identifying marketing qualified leads (MQLs) is the catalyst for all marketing efforts. In this piece, we’ll explore what an MQL is, how they can be qualified, the relationship between MQLs and SQLs (sales-qualified leads), and how MQLs can help show return on investment (ROI).
What is a marketing-qualified lead?
A marketing-qualified lead is a prospect who has expressed a certain level of interest in your company’s products or services.
If we think of the classic sales funnel — with top-of-funnel being those who have never heard of your company before and bottom-of-funnel those who are about to purchase from you — MQLs are roughly halfway along.
MQLs have all interacted with your brand in some way, shape, or form — be it by downloading a whitepaper, attending a webinar, or adding items to your ecommerce store’s basket. These actions indicate that they’ve taken the very first steps to becoming a customer.
Once a prospect has been identified as a lead, it’s the marketing team’s job to appropriately nurture them — leading them further down the funnel until they become an MQL, and can be passed over to sales.
At that point, the sales team come in and close the deal. In general, MQLs become SQLs, but we’ll cover that in more detail later on.
There’s often a quid pro quo exchange when prospects become MQLs. In most cases, they agree to give you their details — email address, company (if applicable), phone number, etc. In return they get something of value, like a piece of content that addresses one of their pain points, or problem solves for them.
How to define marketing-qualified leads
Your lead generation process might not be too fine-tuned — it might focus more on generating as many leads as possible rather than necessarily generating the right type of leads. Typically marketers try to cast as wide a net as possible to build out a lead database, and then dial in with targeted outreach (nurture campaigns, email programs, content campaigns), to try to turn those leads into MQLs.
Because of this, all leads that come in have to be qualified before you begin marketing to them. The initial step to qualifying a lead is seeing whether they match certain demographic criteria.
For example, are they from your target region? Do they have a pain-point that your products can solve? If the answer is yes, and if they’ve demonstrated an interest in your company, then they’re ready to be nurtured by the marketing team.
There are no set criteria for classifying an MQL — it totally depends from business to business. However, what’s certain is that the sales and marketing teams need to work together closely when identifying MQLs and SQLs.
Marketing and sales need to decide how warm a lead should be before it converts from being an MQL into an SQL. Too cold, and hard sales tactics may end up putting the customer off. If they’re too warm for too long, and marketing doesn’t pass them over to sales, they may lose interest and opt to do business with a competitor instead.
Lead scoring has a key role to play in this process. Each lead that comes in should have their own numerical score indicating their position in the buyer’s journey. The higher the score, the closer they are to purchasing.
When a lead performs a certain action — be it clicking through on a marketing email, signing up for a webinar, or requesting a demo — a certain amount of points are added to their score. And once they reach a certain score (indicating a high level of interest in your company) they then become an SQL and are passed over to sales.
Bear in mind though that lead scoring (and qualification more generally) doesn’t have to be manual. Using a piece of marketing automation technology will make this whole process far easier and more efficient.
But first off, what are the key things to look for when defining what makes an MQL?
1) Customer history
In general, the first thing you should do is look at historical customer data. Once you know how previous customers behaved prior to purchasing, you can more easily predict which of your current leads will become buyers.
See if any key trends keep on cropping up when analyzing previous customers’ buying journeys. To make this analysis as accurate as possible, it’s best to use an attribution model.
If you’re lucky, a strong trend may well emerge when looking at previous customers. Perhaps the majority visited your website’s pricing page before signing up to receive email alerts, or clicked through 5 of your marketing outreach emails, before requesting a demo, and finally purchasing.
In this case, you have a nice and simple buyer’s journey to form the basis of your lead scoring — and lead qualification — process.
2) Target personas
Once you’ve reviewed your customer history, it’s now time to firm up on your buyer personas. What sort of people buy your products? Are there typical demographic factors that you need to take into account?
If you are a CRM provider, it’s not very valuable to focus all your energy on selling to a sales executive. Not only are they probably too junior to make buying decisions for their company, but it’s probably also not their area of expertise.
In this case, it’s probably best to immediately disqualify the lead — they’re never going to buy, so you’re just wasting your time pursuing them. Just because that particular prospect is not the right fit for your company, doesn’t mean you want to disqualify the entire company, so you might hunt down someone that has a more targeted job title, or a better fit for you. For example, if you see a CMO engaging with your brand, s/he should probably receive more attention from your marketing team.
Location is another key demographic factor. Say you’re a B2C company that sells handmade shoes to Europe and North America — this means that you can easily disqualify any prospects who are based in Asia, Africa, or elsewhere.
Whilst these examples are overly simplistic, the takeaways are the same across lead qualifications models. They’re the key things that you need to be thinking about when defining who constitutes an MQL. Just because someone shows an interest in your company doesn’t mean that they’re your ideal customer.
While it can sometimes feel painful to disqualify a “lead”, it’ll save you time and hassle further down the line.
3) Speak to your sales team
Make sure you receive as much feedback as possible from your sales team. Who do they find easiest to sell to? Why? And who’s hardest to sell to?
Your sales team directly interacts with your company’s prospects every day, so they have a wealth of invaluable insights that you should take on board. Marketing and sales shouldn’t lock horns or see each other as competition — instead, they need to facilitate one another.
Ask your sales team to make a conscious effort to glean feedback from each and every prospect. How did they come across your company? What in particular made them want to purchase your goods? How did your company differentiate itself from the competition?
As well as giving you feedback from the prospects themselves, your sales team will also give you feedback on their experience interacting with them.
After all, it’s marketing’s job to enable sales to help them close more deals. Ask your sales team if there are any content pieces they need that might help them. White papers, email templates, call scripts, data sheets, etc. are all tools marketing can deliver to help sales win more.
One common problem is that MQLs are qualified as SQLs too early on in the funnel. While this may make the marketing team feel good, if these prospects aren’t yet ready to purchase then it’s pointless.
By pitching too hard, too early, you may well end up putting the customer off — and damaging the company’s bottom line in the process.
4) Tinker away
Defining an MQL is an ongoing process — if the sales team is ever unhappy with the leads they’re being given, then that means you’ve incorrectly qualified them.
It’s unlikely that you get the qualifying criteria spot on the first time around. However, the more you learn about your customers’ buying journey, the tighter you can make your target personas. The more feedback you get from your sales team, the closer you’ll come to hitting the mark.
Why is it so important to define MQLs?
Correct lead qualification will save your organization time, make your marketing efforts more productive, and ultimately improve your bottom line by converting more prospects into customers.
Lead qualification ought to occur very early on the pipeline. By doing this as soon as a new lead comes in, you can quickly work out whether they’re worth your attention (i.e. qualifiable) or if they’re unlikely to ever purchase.
Plus, qualifying at the beginning stage of the buyer’s journey is a great way to personalize your marketing and sales approach. Not all leads are created equal — for example, if you have a really hot lead come in then you’re better off passing them over to sales sooner rather than later.
Likewise, you don’t want to adopt a hard sales approach if a prospect is only slightly interested in your company.
How many SQLs come through each week without first having been MQLs? How many potential customers sign up for a demo or get in touch directly with a sales representative?
For most businesses, this number is pretty low. However, many more people are still interested in your products — but they just aren’t yet ready to purchase. Maybe they’ve been on your website, clicked through on a few of your ads, but are still unsure about your offerings.
In these instances, you don’t want to scare off prospects by treating them like true SQLs. There’s nothing more annoying than being bombarded constantly with sales emails from a company that you haven’t even bought from yet.
By immediately identifying them as MQLs as soon as they come in, you can start to plan a more subtle approach to converting them.
In short, without properly identifying MQLs, you’d end up wasting time and energy marketing to prospects who have no need or desire to purchase your product — or you’d prematurely send all prospects to your sales team (and risk putting them off). Perhaps more importantly, you’ll be creating an environment where sales does not value the leads that marketing is passing over.
How defining an MQL helps show ROI
Certain aspects of marketing — such as brand awareness and brand reputation — rest on intangible metrics. It’s hard to assess awareness and reputation, so you’re left second-guessing the ROI of your efforts.
When marketers identify MQLs, however, it gives them a tangible metric (and goal) on which to judge their efforts.
For example, the marketing team might be given a budget of $1 million for a single quarter. Their performance for that period will then be assessed on both the number of MQLs they generate with that budget, and the percentage of MQLs that become SQLs.
When it comes to the next quarter, the marketing team’s budget going forward will depend on the ROI of their efforts to date.
This obviously isn’t the whole story. Perhaps only a small number of leads that you passed over to sales become customers and so you need to tinker with your definition of an MQL.
However, having a solid definition of what success looks like is critical. What does an MQL look like? And at what stage of the funnel should they then become an SQL?
How many MQLs does your organization need to generate?
There’s no simple answer to this — it totally depends on your industry, the quality of your products, the competition, and the skill of your sales team. In essence, you need to create enough MQLs to turn into SQLs, which sales will then hopefully turn into customers.
To work this figure out, look at your historic conversion rate between MQLs and SQLs. Then, look at the drop-off rate between SQLs and customers. Whilst you should always be refining your processes in order to reduce the number of drop-offs, this historic ratio should give you a good idea as to how many MQLs you need to generate.
Remember, though, that this will require continuous work and tinkering on your part — if the sales team is having difficulty converting MQLs that have been passed over to them as SQLs, then you need to change your MQL criteria. As with all things digital marketing, it’s a constantly evolving process.