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Home > Blog > Digital Marketing > PPC >

SQL vs. MQL Explained: What is the Difference?

If you’re a marketer, it’s likely that at some point you’ve heard about lead generation. If you haven’t, allow me to explain: SQL and MQL are important metrics for marketers to measure the amount of potential sales opportunities.

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But what exactly is the difference between these two terms? And how can you use them together for maximum impact?

This article will explain the key differences, and demonstrate several practical uses for SQL and MQL.

Read on to find out more.

SQL and MQL (What comes first?)

Understanding the difference between SQL and MQL is crucial to ensure you find the appropriate metrics for your marketing campaigns.

Marketing qualified lead (MQL) is the first conversion funnel stage. A lead becomes an MQL when you’ve contacted them and they have demonstrated interest in your product or service.

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Sales qualified leads (SQL) are leads at the second stage of the process – those that contain contact information and fit your target criteria (which is usually defined by industry, revenue, seniority, etc.)

Exactly the same criteria should always define both SQL and MQL to ensure accurate comparisons.

What is SQL?

SQL is short for Sales Qualified Leads. It is a measurement of how many leads your company has that are ready to speak with a sales representative.

What is MQL?

MQL is short for Marketing Qualified Leads. It is a measurement of how many leads your company has that have expressed interest in the product or service you are offering.

Which is better, MQL or SQL?

This is a question to ask when you’re looking at conversion rates. If your conversion rate is high, SQL wins every time.

If your conversion rate is low, MQL wins every time.

Let me explain:

SQL refers to how many sales opportunities are out there. If the lead is qualified, that means they are ready to speak with a sales representative.

Not all leads are SQLs though – some still need nurturing before they are ready for a call center rep.

MQL, on the other hand, refers to how many prospects are out there. It’s an earlier step in the process of generating leads and it is the first opportunity for marketers to get their foot in the door.

How They Work Together in the Sales Process?

SQL and MQL are both essential steps in the process of generating leads. Understanding how they work together will allow you to get the most out of your marketing efforts.

Generally speaking, there are three steps for this process:

Lead generation

When a prospect expresses interest in your product/service, they need nurturing before that interest turns into a sale. For this step, MQL is typically used in conjunction with marketing automation platforms to nurture the lead in question.

Lead Nurturing

When leads become SQLs, they are no longer just visiting your site and reading blogs; at this stage, your leads want to engage more closely with your brand so it’s vital to make sure they get the information and resources they need. Nurturing is also a good opportunity for you to personalize your approach and tailor content accordingly.

Sales Conversion

And when leads convert into sales, that’s when deals get closed and revenue starts rolling in. It can be difficult to measure this stage because not all deals happen at once – you might have a few SQLs going through the pipeline, one after the other, and only converting into sales later.

What does this Mean for Marketers?

Marketers need to stay up-to-date with how each of these metrics is being used by their teams so that they can understand how to work together most effectively.

Even if your company is strictly using SQL to measure the number of leads, it’s important to understand how MQL relates to this metric so you can get a fuller picture of all leads created by knowing the MQL to SQL Conversion Rate.

The same goes for MQL, too – while the metric might be used in isolation by marketers, understanding what happens during each stage of the process will give you a better understanding of how MQL and SQL should work together.

How to Use MQL in Your Campaigns?

An MQL can be found in various ways – through telemarketing, online advertising like Facebook or Google Ads, or email campaigns etc.

Ask Questions

In order to qualify the leads, marketers will ask potential customers some questions about their needs and the problems they have. After those questions, leads will be classified as hot (highly interested), warm (moderately interested), and cold (not interested).

Sort Out Your Leads

Leads that are not qualified during the call or email campaign will be stored in a database for future reference. The customer journey towards becoming a customer starts from this point onwards.

Treating MQL as the next step beyond SQL is useful because it helps you understand and recognize the potential of your leads right off the bat. Instead of thinking, “maybe this lead will become a customer”, think, “If I follow up with this lead, they could become a customer.”

The trouble with MQLs is that they’re difficult to quantify. If you have 100 SQLs and 10 MQLs, you know that 20% of your efforts produce results – but how do you know which ones are most worthwhile?

Collect More Information About Your Leads

As you start to collect more information on your leads and create more extensive marketing funnels, you’ll get a better picture of which leads are most likely to turn into customers. You’ll be able to see what percentage of leads at each stage typically convert, so you can judge for yourself whether or not an individual lead is worth pursuing.

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Qualification of MQLs

MQL is a qualified lead. It means that the possibility of converting this lead into a sales order or opportunity is at least 50%. The qualification process involves such factors as:

  • The level of interest in the product or service
  • Affordability
  • The frequency with which the product will be used
  • Concerns regarding the quality or performance of the product

Once you get an MQL, you can no longer ignore it. An MQL should be considered an order that awaits fulfillment. It’s important not to lose your clients during this transition from MQL to Sales Order, and you have to follow up on them regularly.

How to Use SQL in Your Campaigns?

Sales qualified leads, or Sales QL is a term used by the sales and marketing departments to describe a lead that is targeted to meet the sales department’s criteria. Here are some of the ways you can get SQLs:

  • You get a prospect directly on your website.
  • You get a prospect from your affiliate partners.
  • You get a prospect in an online forum.

After you collect these prospects, you need to make sure that they are sales-ready by getting them on your marketing list. You do this by qualifying these prospects based on their behaviors or actions. When you qualify these contacts, it will either place them on your marketing list or delete them from your list.

How to Qualify Sales Qualified Leads?

How do you know if someone is a sales-qualified lead? The company’s sales team determines this. They determine who is a sales-qualified lead and who is not.

However, there are some basic rules of thumb when it comes to qualifying someone as an SQL:

  • Someone should be spending money on the product/service they need.
  • They should have done their research on the product/service they need.
  • They should have reached out to your company directly.
  • They should have been in contact with your company’s sales team.
  • They should be reaching out to multiple companies for the same product/service.

The main thing here is that if someone meets these criteria, they are more likely to become a customer than someone who does not meet them.

When a company starts getting more leads coming in, it needs a way to keep track of which ones are more likely to convert and which ones will just be tire kickers. This will help the company figure out which leads are worth spending time and effort on.

What is the Difference Between MQL and SQL?

Following are few difference:

1-Buy Intent

Sales qualified lead (SQL) is a marketing term for a prospective customer who has shown some level of interest in your product or service. The level of interest can range from simply visiting your website to requesting a demo or free trial.

By contrast, marketing qualified lead (MQL) is a term that refers to any potential customer who now knows the product and has expressed interest in your product or service. It does not matter whether they have visited your website or not.

In other words, an MQL is someone who has been found by marketing methods like search engine optimization, pay-per-click campaigns and emailing out a newsletter to your existing customers and prospects.

2-Stages

Visitor –> Leads –> Qualified Leads –> Sales

The other difference is that MQLs are seen as early-stage leads, whereas SQLs are mid-stage. For this reason, you’ll see marketers using different tools to nurture them depending on their stage in the buying process.

3-Process

There is also a difference in the processes involved when working with both metrics.

i-Stages

SQLs are typically handled by sales teams which means they can be quickly passed from marketing to sales. Nurtured leads, however, will go through a separate process, and you’ll want to make sure the right people in your company know how best to handle them.

MQLs go through several processes before becoming SQLs and can stay in these stages for weeks or months without moving closer to the top of the funnel. They’re also difficult to predict so lead scoring is a good way of measuring their potential value; the scores help you track which leads are most likely to become customers and work with them accordingly.

Customer segmentation is necessary. The sales team need to know that every lead generated by marketing is worth converting into a real customer. The best way to do this is to make sure that every potential lead that comes through the door can be considered “sales-ready”.

ii-Lead generation

Lead generation involves taking all of these efforts and funneling them into specific individuals within the market segment. These are usually people who have shown some sign of interest in your product, whether it be by visiting your website or clicking on one of your ads.

iii-Sales ready leads

The sales team has limited resources to spend on nurturing leads, so they want the marketing team to provide them with the most promising ones first. The easiest way to figure out which leads are most promising is to see who was already in contact with your company before and if there was any previous engagement.

In other words, if someone filled out a form on your website, downloaded an eBook, or filled out a contact form it means that this person already has some interest in your product and services.

As you can see, these are all great indicators about how likely it might be for this person to become your customer one day. For example, a sales-ready lead has been created from activities such as events, trade shows, webinars, or email campaigns. These leads are then fed through to sales teams who will follow up and attempt to convert them into paying customers.

Why use Sales Qualified Leads and Marketing Qualified Leads?

  • They are helpful to track your leads’ progress.
  • You can use the metrics to identify prospects.
  • MQLs are essential in lead generation campaigns.

Wrap up

SQL and MQL are both essential metrics for marketers to stay on top of, but it is important to understand what they mean and how they relate to one another.

Hopefully, this has given you a better understanding of how sales qualified leads and marketing qualified leads are used to achieve the same end goal: to get in contact with potential customers. Of course, there are many other methods (such as email campaigns and cold calling) that one might use to achieve the same result, but each comes with its disadvantages.

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