What Is A Qualified Lead? | MQLs & SQLs Explained

Lots of people interact with your business each day. They might visit your website’s home page, read some of your blogs, and perhaps submit a question on your contact form. The combination of actions that they take can give you a better idea of how likely they are to become customers, so that you can decide whether to pursue them, or let them fade into darkness. The people who you pursue are known as qualified leads, and in this article, we’ll explain why they are so important for efficient marketing and sales processes.

What is a qualified lead?

A qualified lead is someone who has passed criteria that makes them more likely to become a customer. They may have downloaded a piece of content, submitted a contact form, or completed another action that shows their interest in your business, which “qualifies” them as a lead.

Lead qualification criteria usually varies from business to business, and can even be different for companies in the same industry. It should be based on the unique behaviour of a company’s paying customers as they made their way through the sales funnel. This gives you an accurate, real-world picture of the actions that people took before they became customers, which helps to create a rigorous qualification process.

Qualifying leads has two main purposes:

It allows marketers to identify leads that can be nurtured through the sales funnel using relevant, high quality content. These are called marketing qualified leads (MQLs).
It tells salespeople which leads are more likely to turn into customers, and are therefore ready for a sales call. These are called sales qualified leads (SQLs).

Lead qualification helps you to understand where people are in their buyer journey. If they have just landed on your website for the first time but haven’t yet provided their personal information, they are in the awareness stage of the journey. When they swap their contact details for an industry report that you’ve published, they might be considered a marketing qualified lead in the consideration stage (although they may need to complete more criteria to be true qualified leads). If they then call your sales team, express a clear interest in your product and have the money to pay for it, they become a sales qualified lead in the decision stage of the buyer journey.

You can qualify leads using a process called lead scoring, which is assigning points based on a person’s behaviour. Let’s say a person needs to reach five points before you classify them as a qualified lead. To achieve this, they may decide to download an eBook (one point) at the start of the week, subscribe to your newsletter (one point) a few weeks later, and then finally contact you for more information about your product or service (three points). They’ve now completed enough encouraging actions to confirm that they are interested in your brand, which turns them from a regular lead to a qualified lead. Points can be taken away in this process too. If a person doesn’t visit your website or interact with your content for a few months, their chilliness is apparent, and they may lose points as a result.

You don’t necessarily need to use scores for your lead qualification criteria. You can have simpler criteria like “this person has completed these actions, and is therefore qualified.” But attaching scores can be a good way to rank the importance of each action. Sometimes, marketing and sales teams collaborate to come up with a good lead management process, which allows them to agree on the exact conditions for when a person becomes a marketing qualified lead, and a sales qualified lead. This helps marketers to nurture leads through the sales funnel with relevant content, and salespeople to call prospects when they are much more likely to buy. The quality of MQLs and SQLs can also be assessed regularly to optimise the process and make things more efficient for both teams.

Your website is usually the most important tool for qualifying leads, as it’s where people find more information, download your juicy content, and submit enquiries. It works as both a funnel for potential sales, and a filter for identifying people who aren’t serious about purchasing your products or service. This filter can come from your criteria itself, as well as clever actions like adding certain form fields that help to separate the wheat from the chaff, like a “budget” field that starts at your lowest average sale.

Now that we know what a qualified lead is, let’s explore the main types in more detail, and how they relate to the buyer’s journey.

Marketing qualified lead (MQL)

A marketing qualified lead is someone who has shown interest in your brand. They are usually classified after swapping their contact information for a piece of your content (such as an eBook), but there are lots of other common criteria for becoming an MQL, including:

Subscribing to a newsletter
Downloading a piece of gated content like an eBook
Signing up for a webinar
Requesting free samples
Clicking on an advert
Downloading a product sheet or catalogue
Asking for more information about your product or service
Visiting your website multiple times, particularly the pages that talk about your products and services
Matching the demographics of the ideal customer, like being a certain age.

As you can see from this list, businesses usually attract MQLs by creating valuable content that helps people to solve their problems. A value exchange occurs between the prospect and your business, with them giving you their valuable contact information, and you giving them a piece of worthwhile content like a webinar or an industry report. This exchange is pivotal because once it happens, the person is much more likely to keep on “doing business” with you, whether that’s downloading more content, subscribing to your newsletter, or enquiring about your products or services. Also, if the content you are offering is excellent, and it helps the prospect to solve their problem, they will likely develop an instant bond of trust with your business, making them much more receptive to a sale. This is essentially content marketing, and it’s a potent way to attract MQLs to your business, who can then be nurtured with personalised content, turned into a sales qualified lead, and eventually a customer.

After someone has downloaded a piece of content, you can start to nurture them with more helpful related content, which activates the mere exposure effect (developing preferences for things that are familiar), and solidifies your credibility further. For example, if they downloaded an eBook that teaches them key SEO techniques, you can send them other SEO resources that may help them. This “warms up” the lead and can slowly turn them into an SQL. The process is usually automated using a system like HubSpot, which allows certain triggers and actions to occur—e.g. If a customer downloads the SEO eBook, send them a (faux) personalised email with a list of helpful SEO articles that we’ve written, and end the email with a “side note” about the SEO services that your company offers. Set-and-forget automation like this can be an incredibly powerful way to generate sales.

However, downloading a couple of pieces of your content doesn’t necessarily turn a person from an MQL into an SQL, where they are ready for a sales call. They may still be technically a cold lead who requires further nurturing. Some actions are more promising than others, which is why developing a good lead scoring system is important to clearly differentiate the two groups, so that your sales team can identify the hottest leads to call.

Those who have swapped their personal details for a piece of content are also known as information qualified leads (IQL), which is essentially a type of marketing qualified lead. They are usually researching a solution to a problem, which your product or service may eventually help to solve.

Sales qualified lead (SQL)

A sales qualified lead is someone who has a strong chance of becoming a customer, and is ready to speak to a salesperson. They are usually a good fit for your products or services, and have expressed explicit interest in them in some way. This interest can be determined using any (or all) of the following actions:

They have called the sales team, and the salesperson believes they have potential. The person has clearly shown that they want the sales process to continue.
They have requested a quote.
They have asked for a demo of the product or service.
They have satisfied a variety of criteria like content downloads, visiting certain web pages like pricing pages or contact forms, and closely fitting your buyer persona. Their lead score has reached a level where you believe they are ready to buy from you.
They have the budget to buy your product or service. This is usually gained from a form on your website.

Again, these criteria may be unique for every business, and are usually worked out by the marketing and sales teams to ensure that the lead qualification process is suitable.

As an SQL, the prospect has moved into the consideration stage of their buyer journey, and are now “hot” leads. They are handed from the marketing team to the sales team, who should be extremely confident that the prospect is ready to talk to them. This comes from their faith in the process. Every SQL must be a clear opportunity, and the more accurate the process, the shorter the sales cycle will be.

Speed is vital for turning SQLs into paying customers. The faster the follow up, the more chance of closing the sale. Just as a person can lose their MQL status by going dark for long periods, they can also regress from SQLs to MQLs, becoming colder and less likely to become customers. To increase their chances, it’s a good idea for the salesperson to learn the actions that the person has taken to become an SQL, as they can help them to prepare for the sales conversion and be more effective with their pitch.

Sales teams may also regularly deal with MQLs who haven’t tallied up enough lead score points to become SQLs. A prospect may have downloaded a couple of pieces of content and then called the sales team, but the rep who spoke to them may have some reservations about their intent or ability to buy, in which case they should remain MQLs until they are ready. At this point, their responsibility falls back with the marketing team, who should continue nurturing them with helpful content that slowly wins their trust.

Product qualified lead (PQL)

A product qualified lead (PQL) is someone who has gained value from a trial or demo of a product. This classification is often used by software companies who use these freemium models. For e-commerce software, a person may become a PQL when they have uploaded a certain number of products. For payment software, it could be after they’ve processed $500 worth of payments through the system. Again, the qualification criteria is specific to the business as it depends on the software itself.

To identify qualification criteria for a PQL, the company should ask itself what a successful customer looks like. If their customers hadn’t already handed over their money, they would usually make perfect PQLs because they are getting value from the system. The question is: how do they get value? What actions do they take from day-to-day that justifies the cost of the software? These make perfect PQL criteria. Software trials may also include certain limits to prevent the prospect from being able to use it as a paying customer would. When these limits are reached, like uploading the maximum number of customers to the system, that’s a good indication that they are a PQL.

PQLs are only relevant for companies who practise freemium models, so they are less known and used. But they can be extremely useful for such companies.

Qualified leads—summary

Qualified leads are a way to identify which leads are worth pursuing, and which aren’t. They are an invaluable component of the sales funnel and buyer journey, and help the marketing and sales team to be more efficient at their jobs, which boosts the company’s profits over time.