Understand the concepts of Leads, Prospects, MQL, and SQL

What is an MQL? What is an SQL? What is the difference? These are not just fancy acronyms, they represent different stages leads go through before becoming clients. Understanding their meaning will enable you to master the art of transforming Leads into Clients.

What Is the difference between a Prospect and a Lead?

What is a Lead and what is a Prospect?

Even though both terms are often used interchangeably, they have different meanings.

Lead Definition

A Lead is an unqualified contact at the top of your Sales Funnel. Leads typically come from your marketing efforts, they expressed some level of interest in the product or service you offer. They, for instance, visited your website and downloaded one of your Lead Magnet, but have not been qualified yet.

Prospect Definition

A Prospect is a contact that has been qualified by your Sales Team. His profile fits with one of your ideal buyer persona. A Prospect is a contact that will seriously consider purchasing your product or service.

Differences between Lead and Prospect

The difference is simple, you know a lot more about a Prospect than about a Lead.

Because a Prospect can only be a Prospect if he’s been qualified, you know:

  • Who he is
  • Who he works for
  • What his role is

Most importantly, if you have a good qualifying process you know:

  • His Context
  • His Challenges & Pain Points
  • His Needs & Motivations

You know very little about a Lead because a Lead has not been qualified. You only know what your form requested from the Lead.

If you have implemented a marketing automation tool on your website you can keep track of your visitors and their actions on your website. Once they become a Lead (meaning when they submit their contact information) you can see all of their lifetime activity on your website.

Why Marketing & Sales use Lead & Prospect differently

The main reason why both terms seem interchangeable is because of the separation between Sales & Marketing departments in larger corporations. Because they each have their own vocabulary and processes they zero in on their operation and neglect the big picture.

For instance if your company is marketing focused, you will mostly hear about Leads, alongside MQL and SQL. We found that it is within these companies that the term prospect can disappear or be used to designate a lead 😩.

If your company is sales focused, you will probably not hear about MQL and SQL.
Leads are the starting point, -what’s given to the sales reps- then you’ll hear about the terms “suspect”, “prospect” and “opportunity”.

Is it weird that both departments don’t use the same terminology?
YES!

Does that demonstrate the insufficient collaboration between the commercial and marketing departments?
YES!

The truth is all of these terms are relevant and complement each other.
Consistency between Marketing and Sales is key to an organization success. The more both departments collaborate the more likely you are to convert your leads in clients; no matter how you call the stages in between.

Sales Cycle: Lead, MQL, SQL, Prospect, Client

The sales cycle is the process that encompass lead generation to converting those leads into customers. The marketing and sales teams each have their role to play in this process.

We recommend that you model your customers’ journeys to increase your sales efficiency, but that’s another subject.

The Conversion Cycle from the Marketing point of view

Marketing managers

When you have an inbound marketing strategy in place, this cycle is very clear and structured. In this case we talk about the inbound marketing funnel.

From Visitor to Lead

The foundation of your inbound marketing funnel are your website visitors. Without traffic on your website, there is no one to convert.

When you have significant traffic, you know that a lot of people are viewing your content but you don’t know who they are. Until one of them fills out a form and provides you his contact information.

That’s when the visitor becomes a lead; he is no longer anonymous.

From Lead to MQL; MQL Definition

A Lead becomes an MQL -stands for Marketing Qualified Lead- when he has engaged with your content. For example, after having consulted a few of your articles, he downloaded a white paper or signed up to your newsletter. Companies that use MQL usually have a scoring system, meaning that not every lead becomes an MQL.
The goal of that scoring system is that when you have a lot of leads -and a lot of bad leads- you want to maximize the time of your Sales Team by only spending time on the ones that engaged your content the most.

For instance you can set rules, like a MQL has to have visited your website at least twice, or read at least three of your articles.
You can even be more specific, if you master your content strategy and your website analytics you will know your Awareness, Evaluation & Decision contents. Monitor the conversion rates behind each articles to identify best performers and clarify user intent. From their you can have a smart system that automatically “upgrades” to MQL the leads most likely to be qualified.

A Lead can become an MQL because his behavior on your website clearly identified his pain point; and this pain point directly affects his likeliness of becoming a client.
For example, a visitor that prior to filling out your form, regularly consulted your article on setting up an account-based marketing strategy, and from their visited your pricing price page for your ABM offering; that’s solid intel for your qualification process!

From MQL to SQL; SQL Definition

Marketing Qualified Leads (MQL), become Sales Qualified Leads (SQL) when they have been qualified by more than just their behavior on your website.

This is where it can get complicated depending on the size of your organization and the complexity of the Sales Process.

Organizations that have Business Development AND Sales Representatives usually have more stages. The stage from MQL to SQL is the qualification by the Business Development team, and in that scenario there is also a stage from SQL to Prospect, the “additional” qualification, this time by the Sales Representative.
This really only make sense for complex, large consultative deals, where the expertise of the sales rep can only definitively qualify said prospect.

The truth is, for most organizations an MQL becomes an SQL when you gather enough relevant information about him:

  • Who he is
  • Who he works for
  • What his role is
  • His Context
  • His Challenges & Pain Points
  • His Needs & Motivations

WAIT! Does that sound familiar?

YES, technically an SQL is a Prospect; it relates to what we mentioned earlier; miscommunications and discrepancies between Sales & Marketing creating confusion and inefficiency. It does not make sense to multiply the stages and complexify your sales cycle.

That being said the marketing team is not passively waiting for Visitors to become SQLs. Its role is to set up an effective lead scoring and lead nurturing strategy.

By defining the rules that affect the progression of the leads throughout the buying cycle they actively convert them from one stage to another (scoring) and send them relevant content to engage them (nurturing).

The Sales Cycle from the Sales point of view

The role of the sales team is simple. Convert as many leads as possible into customers.
From their point of view they are getting leads (every sales rep will tell you they get bad leads), using their amazing selling skills they transform these leads, from prospects to opportunities and eventually clients.

Depending on the company size, industry, country, companies have developed different terminologies, but we are describing the most common -and accurate- stages potential clients go through.

What is an opportunity in sales?

Remember, Sales is getting leads, they qualify those leads, the ones that move along are prospects. What happens next? Prospects become opportunities.

This is one of the reasons why Prospects are often overlooked, most sales organizations barely even mention that stage because as soon as a Lead is qualified it becomes an opportunity.

Think about it, a Prospect fits with your ideal buyer persona, so he should seriously consider purchasing your product or service; he should be a “hot” opportunity.

A Prospect stays a Prospect only if he is not a “hot” opportunity, his context may be too complex or the timing is not right. The issue might have been with the persona, not being ideal or precise enough.

To sum up:

A sales opportunity is a qualified prospect who is likely to become a client because he has a pain point your product or service can solve and the ability to purchase it in a reasonable timeframe.

Beware of Suspects

A suspect is a lead who will stick around in your pipeline and waste your time and energy  without having the means or intention to buy the products and services you are selling.

From Lead to Client Diagram

The complexity and diversity in the way these terms are used is due to the lack of communication & collaboration between Marketing & Sales.

In the United States, 84% of customers ready to buy report that their buying journey took longer than expected.

The cycle your potential clients go through, from “visitor” to “customer” must involve joint marketing and sales efforts for optimal results.

MQL-SQL- definition

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