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Marketing Qualified Leads vs Sales Qualified Leads in the B2B Software Space

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When it comes to buyers for your B2B SaaS company, every lead counts. 

But, are all leads created equal? 

In this article, we examine the difference between Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs) in the B2B software space. 

We’ll look at the importance of each and identify when and how to focus on the different types of leads so you can grow your business smarter and faster. 


What’s the difference between MQLs and SQLs?


The difference between the two lead types comes down to where along the buyer journey each lead exists. 

Another way to look at this is, the difference between an MQL and an SQL is how likely the lead is to purchase your software (their “purchase intent”).  

You need both types of leads to grow your business sustainably. 


Marketing Qualified Leads (MQLs) are in an earlier stage in the buyer journey than Sales Qualified Leads (SQLs). They are more curious about your products (and other businesses’ products), and are in an investigation or research stage. 

At this early point, MQLs have:

  •     Seen your marketing materials 
  •     Visited your website or landing page
  •     Taken an initial step or steps to engage with your business


How do you know a lead is an MQL? 

One way to determine if a lead is an MQL is to consider the actions they have or have not taken on their buyer journey (more on that later). For your B2B software company, this might look like leads who have downloaded an ebook or whitepaper, joined your mailing list, or contacted you for general information. These are often considered “warm” leads.


How do you know a lead is an SQL? 

Sales Qualified Leads (SQLs) are further along the buying journey. 

They’re leads who have moved from curiosity and interest to purchase intent. At this point, it’s time for your Marketing team or Sales Development Representatives (SDRs) to hand the lead over to Sales, who focus on closing the sale.

Again, the type of actions a lead takes, indicating they can be defined as an SQL, may vary.  For B2B software business, at Hyperio.ai, we identify a lead as an SQL when they fall into your Ideal Customer Profile (ICP), have expressed a problem that you can solve, and have buying authority or influence. Other lead behaviors that fall into the SQL criteria may include: asking business-specific questions, requesting a specific quote, requesting meetings, and asking for other purchase-related information – these actions that tell you this lead means business. These are considered “hot” leads. 


Why do both types of leads matter? And when should my business focus on each type of lead?


Many businesses only focus on Marketing Qualified Leads, in the mindset that the more interested leads you generate, the more conversions you will see and the faster your business will grow. At the onset, when you have fewer leads, this may seem to be the case. However, as your business grows and you increase lead generation efforts, you’ll rapidly increase your MQLs — and flood your Sales team with unqualified leads to wade through. 

 Focusing on lead volume without considering lead quality and readiness will result in a more labor-intensive sales process, and ultimately yield lower conversion rates. 

Some studies show that up to 50% of prospects are not the right buyers for your business

By waiting to pass on leads that are Sales Qualified, rather than simply Marketing Qualified, your team is enabling your Sales team to do what they do best: sell. 

The reduced legwork enables closing teams to focus on sales rather than having to qualify leads before working them.

Increasing lead volume without
increasing lead quality = a labor-intensive sales process 

Additionally, if you don’t wait to ensure the lead is intent on purchasing your software before presenting your sales pitch, you’re at risk of providing a poor customer experience. 

Too strong a sales pitch too early in the buying journey could turn away even the best leads. 

So, as your business grows (and your leads list grows along with it), enable your Marketing and Sales teams to work within a process flow that saves the legwork for leads who are worth the investment. 

Not sure if your internal team has time to differentiate MQLs from SQLs? Learn how we can support your business by driving quality, qualified leads so you can let your sales team focus on closing the sale.


Where do MQLs and SQLs fit into the sales funnel?

Your sales funnel is unique to your business, but historical data should tell you the type of actions leads generally take along their buyer journey. If you know, for example, that leads who have indicated they are the budget owners typically have a higher chance to turn into a buyer, you may have identified a key determinant for the MQL/SQL handoff between Marketing and Sales. 

Remember, just because a lead contacts you for information it does not mean they’re a guaranteed buyer. It might not even mean they’re an SQL. To become a Sales Qualified Lead, they have to have a problem you can solve, be in your target market, and have the right budget for your business. 

Use the acronym BANT to identify leads who meet the criteria to be your buyer:

B – Budget

A – Authority

N – Need

T – Timeline 

A lead who has the right budget, the right needs and the authority to make a decision is a strong lead for your business. A lead who is on a timeline will also drive a fast conversion. 


Which type of lead will grow my business faster?


Enabling your Sales team to focus their efforts on Sales Qualified Leads will result in faster conversions, but the truth is you need both types of leads to grow your business sustainably. 

As you grow your business, you’ll want to fill the top of your sales funnel with leads. Ideally, you’ll leverage a targeted marketing strategy that advertises to the right audience at the right time in the right place, but still not everyone you reach will be a qualified lead. That’s when your marketing program kicks in, delivering targeted advertising to drive higher-quality leads through the funnel. 

As leads engage with your business, they convert from top-of-funnel activities (like receiving your email advertisement) to mid-funnel activities (like visiting your landing page, subscribing to your mailing list) and ultimately to conversion-focused engagements (software demos, emailing you for information, discussing pricing, requesting live software demos). 

Each step of the way, your leads become more and more qualified, moving into Marketing Qualified to Sales Qualified Lead status.

At Hyperio.ai, we’re experienced in delivering qualified leads that yield scalable business growth. We’re experts in the B2B software sales space and produce campaigns your leads can’t ignore. If you haven’t considered outsourcing lead generation before, think of this: rather than bogging down your sales team with every lead that’s been marketing-qualified, we’ll pass on only the leads with high purchase intent, so your sales team can close the sale. Together, we’ll work with your team to drive your business forward.


Let’s talk about how we can help you supercharge your sales funnel today. 

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