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If you’re as much of a The Office fan as I am, then you’ll likely remember a couple of episodes, where the sales staff anxiously awaited the arrival of so-called “sales-qualified leads” (or, more accurately, competed against one another for them). And there was a good reason for it, as they’re an essential source of clients!
What is a sales-qualified lead?
A sales-qualified lead (or SQL, in short) is a prospect whom you consider ready to interact with your sales team. As a rule of thumb, these individuals have shown enough interest in your offer for you to assume that they’re ready to “talk business”. Of course, SQLs rarely appear out of thin air!
Before you get your hands on any of these “hot” leads, each prospective customer is verified by your marketing department. They’re the ones who “catch” the exact moment when a lead becomes sales-ready to help you boost the likelihood of closing deals.
In fact, LinkedIn research has found that treating sales as a team sport pays off. Companies, where marketing and sales teams cooperate closely, are 67% more likely to convert leads into customers, 58% “more effective at retaining clients” and see a 208% higher revenue generated by marketing.
So, what criteria should you use to deem a lead an SQL? I’ll discuss some examples of actions and behavior later in this piece.
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What’s not a sales-qualified lead?
Now that you know what a sales-qualified lead is, it’s worth understanding what isn’t an SQL.
Leads are not created equal. Just because someone visited your page a couple of times doesn’t mean they should be qualified as “sales-ready”. Usually, before a lead becomes an SQL, they’re categorized as an MQL, which you must nurture to become a sales-qualified lead.
An SQL is not a lead who just educates themselves on a topic by downloading an ebook or browsing your site. It’s important to note that not all MQLs will be qualified as SQLs since not all of them will be a good fit for your company.
Leads of low quality aren’t SQLs and will probably never be qualified as such. These include those that:
- don’t fit your customer profile,
- are unresponsive,
- don’t provide business emails.
How to identify sales-qualified leads
If you notice that a lead becomes aware of their problem, and starts to actively search for a solution, for example, by registering for a demo, then high chances are they can be categorized as an SQL. I said “high chances” on purpose, as there will be situations where signing up for a demo won't deem the lead ready for a sale.
The truth is that in order to correctly qualify leads, it’s important that sales and marketing teams work closely together to:
- develop an ideal customer profile,
- agree on actions that a lead should take to be qualified as an SQL,
- come up with nurturing tactics that will turn an MQL into an SQL.
With the above in mind, here are a few characteristics of sales-qualified leads:
- Desire to engage – when a lead regularly interacts with your brand and is open to sharing additional information about their organization or problems they struggle with, it shows they’re willing to engage in a conversation. The more engaged they are, the higher the chance of closing a sale, which makes lead scoring even more important.
- Having a pain point, which you can tackle – you need to find out if the problem the lead struggles with can be solved with your product or service. If you’re a really good fit and can offer a better solution than your competition, then you hit the jackpot.
- Having a budget and the decision-making power – as the 1990s hit goes, “It’s all about the money.” Well, if not all, then at least a big part of it is! Let’s assume that a lead has been browsing through your B2B site and comparing pricing plans. If they work for a financially-stable company AND have the decision-making power and budget in their department, then you’re looking at an SQL.
- Good timing (or urgency) – SQLs are highly motivated by need and powered by time sensitivity. If you offer an email marketing platform, and your lead has seven days to choose the tool for their upcoming campaign, then the urgency factor is certainly there.
- Trust in the brand – last, but not least, soon-to-be customers believe your claims and that you will add value. Anyone who doubts your brand reliability or service quality can’t be considered sales-ready.
With the above in mind, the best way to identify SQLs is through lead scoring, which we will discuss next.
How does lead scoring work?
To understand where sales qualified leads come from, it’s important to know how website visitors are turned from “just” visitors into leads, and what steps they go through to become SQLs eventually.
As you might already know, inbound sales can be divided into a three-step funnel of awareness, consideration, and decision stages.
In the awareness stage, the individual comes across your website (or information on an external site) and becomes aware of your offer. HubSpot aptly refers to these people as “strangers” as you don’t know whether they’ll be interested or indifferent to your offer.
If it’s the former, and they do something that points to their interest (say, they read a blog post and decide to sign up for your newsletter), then they can be considered leads. Ideally, as they go down your sales funnel, they’ll enter the “consideration” stage and become marketing qualified leads. So, what does it take to turn MQLs into SQLs? Here’s where lead scoring comes into play.
Lead scoring usually entails observing your leads’ behavior and ranking them based on their actions and how well they fit your sales persona. While each company has its own criteria of when an MQL can be confidently passed on to the sales team, some of the factors could be:
- The individual gave you their personal info, such as name, job position, etc.
- How many times they’ve returned to your website within a given period.
- How much time they’ve been spending on sales-related web pages (pricing, product demo videos, etc.).
- How many product marketing emails they’ve opened, the CTAs they’ve clicked, and so on.
That being said, based on my professional experiences, some companies will qualify a lead as sales-ready after they’ve signed up for a free account. And they’re in the right, as free plan users haven’t actually gone through the whole funnel, and your business isn’t earning from them (at least not yet).
Rather, they’ll see them as the hottest leads in the funnel, and the sales team will work towards convincing them to upgrade to a paid plan.
If you’re interested in learning more about lead scoring criteria, be sure to give our marketing qualified leads article a read, where we discuss the intricacies in more detail.
Examples of actions a sales-qualified lead will take on your website
Among others, a sales qualified lead is likely to:
Look at your pricing page
This makes perfect sense since you ask yourself “how much would it cost me?” when you first learn about what a company offers. If you’re a SaaS company, then bonus points if you notice that your lead has not only visited your pricing, but also clicked at the various plans.
Sign up for a demo
Signing up and participating in a demo proves actual interest. After all, it requires your lead to schedule the time in their calendar and show up to the meeting. That’s where your sales team should truly shine and seek to address any questions standing in the way of the purchase.
Create a free account
If you offer a virtual product that has a free plan, then chances are, your SQLs will take it for a swing. The same goes for physical items – if you offer cosmetics, then your SQLs could reach out to your team and ask you to send over some free samples. If they like what they see, then you should strike the iron while it’s hot.
Send you an email or a chat message to ask about pricing
Not all businesses publish their pricing online, some prefer to share it individually with prospects. If someone asks you how much your solution costs, then it’s a clear indication that they’re evaluating their options. After all, they made the effort to contact you; it's a great time for the sales team to get additional information about the lead's problems and expectations.
Look at your competition comparison pages (if you have any)
It hardly ever happens that a lead from the beginning is set on one solution only. They usually evaluate multiple options before making the final decision. If you notice that they visited a few of your competition comparison pages, then it’s worth giving them a few extra points in your CRM! They wouldn’t be looking at alternative solutions out of boredom, well, at least most leads wouldn’t. So, don’t miss out on the opportunity to engage with them.
Got the desired number of points from lead scoring
It’s for your sales and marketing teams to decide how many points a lead has to get to become ready for a sale, and how many points should be assigned to each action. Just make sure to pass on the “hot” leads to sales at the right time, if you wait too long then they might go somewhere else.
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It’s OK for most leads to never become SQLs
Sales-qualified leads should be about quality, never about quantity.
If you get your qualification criteria right by closely cooperating with sales then you’ll boost your chances of turning your SQLs into paying customers. It’s perfectly normal for most leads to never progress into sales-qualified leads.
The good news is if you focus on the right ones, then you will increase their customer lifetime value, reduce churn and lower your customer acquisition cost. All that’s left to say is good luck with your lead hunt!
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