MQL and SQL criteria: getting the balance right
Sales and marketing think differently about leads. A lead to one is often not a lead to the other which results in tension, especially when targets are being missed.
It’s too easy for marketing to blame sales for rejecting leads too readily and sales to blame marketing for duff leads. Much of this friction is due to a lack of understanding of the qualification process in the sales cycle. It’s therefore important to prevent undue friction so that respect and mutual appreciation is maintained between the marketing and sales teams.
Be clear on the difference between ‘marketing qualified’ and ‘sales qualified’ leads
The majority of the cost of the sales and marketing process for B2B technology businesses is in the sales process – it’s far more labour intensive than marketing. In fact, for typical tech organisations the cost of sales to marketing is roughly 2:1. So if sales spend large amounts of time on poor leads costs can quickly escalate. Therefore, the sales qualification process should be rigorous and continually re-qualify leads at every stage to weed out poor, time wasting leads. Tough qualification at every stage keeps costs down and allows sales to focus on only the best opportunities.
In some cases rejection rates between marketing qualified lead (MQL) and sales qualified lead (SQL) can be as high as 90%, where too much is slipping into the sales team. In such cases tougher marketing qualification criteria could save costs by reducing the volume of initial qualification calls that need to be made by sales. That said, with high-value sales, the risk of missing a potential sale is high, especially in comparison to the low cost of a single call.
Choosing the right qualification level is critical. If the qualification criteria is too strict or sales don’t see the value in making a qualification call, key deals could be missed.
Low MQL criteria reduces the lost opportunity cost of missing potential sales.
Strict SQL criteria stop costs escalating and keep sales focused on the best opportunities.
Create clear definitions for MQL and SQL criteria
Getting the sales and marketing teams to build clear definitions for MQL and SQL criteria – and own these collectively – will allow a more collaborative approach and should prevent one team blaming the other when things are tough.
Don’t put targets before qualification criteria
It’s easy to set increased targets for the number of MQLs in an attempt to fuel growth figures, but creating higher targets without consideration of the strategy to find these leads or the required investment can cause problems. It’s human nature that when goals and targets are set, people change or bend the rules to achieve them. We’ve been involved with a number of highly ambitious companies who set daunting MQL targets only to find that the quality of the leads passed to sales suddenly reduces, only so that the marketing team meets their target.
The quickest and easiest way to achieve an increase in MQLs is to drop the MQL criteria and then screen with a qualification call. So it’s important that the MQL criteria is clearly defined and not tampered with to achieve targets.
MQL and SQL criteria are like chalk and cheese; they shouldn’t be compared side-by-side, but both have an equally important role to fulfil. Getting the balance right, buy-in from all parties and ensuring qualification criteria are adhered to requires hard and continual work, but the alternative is too costly and messy to contemplate.