What is a sales qualified lead (SQL) and why is it important?
When it comes to lead generation, quantity isn’t always more important than quality. Focus on filling your pipeline with sales-qualified leads to boost your chances of success.
Published January 12, 2022
Last updated March 8, 2022
When it comes to sales, it’s easy to believe that no opportunity is a wasted opportunity. If you throw a product at enough people, someone is bound to buy it, right?
But say you spent money and effort to contact 100 random people about your product. Seventy-five of them aren’t in your target audience, 10 of the remaining 25 can’t afford your product, and 14 are happy with their current product from a competitor. That leaves you with one potential customer and 99 prospects who were never going to buy.
That changes with the power of a sales-qualified lead.
Sales-qualified lead definition
A sales-qualified lead (SQL) is a lead that has a high probability of converting into a customer. An SQL has shown intent to buy and has met certain requirements that determine they’re a good fit for a product or service. The lead qualification criteria may differ depending on your company size and offerings, but in general, a sales qualified lead:
1. Has a need for your product or service
2. Has expressed interest in your company, product, or service
3. Has the budget to buy your product or service
An SQL is the highest-ranking lead a salesperson can ask for. It’s not guaranteed they’ll make a purchase, but the odds are higher than a sales accepted lead (SAL), marketing qualified lead (MQL), or cold lead.
SQL vs. MQL
The main difference between an MQL and an SQL is their place in the sales funnel.
MQLs are still relatively early on in the pipeline. They’re aware of the product, but they haven’t necessarily expressed interest in that product, and they certainly haven’t indicated they want to make a purchase. SQLs, on the other hand, are ready to buy. They might not have their wallets open, but they’ve shown interest by viewing product pricing pages or requesting a consultation.
MQLs aren’t bad compared to SQLs, they’re just not as developed. Think of MQLs as a starting point on the journey to SQLs—initially indifferent leads can turn into massive sales contracts with the right lead nurturing tactics.
SAL vs. SQL
SALs are the most overlooked leads, but you ignore this category at your own risk. They allow for a moment of communication between sales and marketing as MQLs become SQL contenders.
SALs are leads that your sales team officially accepts from the marketing team for further investigation. Rather than marketing simply dumping these leads and running, it’s better to use a formal acceptance process. This enables you to accomplish several crucial things:
- You avoid losing leads. Things happen, and identifying SALs ensures you don’t let promising leads fall through the cracks.
- You can identify any lead issues. It’s important to make sure your sales and marketing teams are on the same page. With an acceptance process in place, your sales team can confirm whether marketing is passing them the right types of leads and address any discrepancies.
- You establish accountability. A formal acceptance gives sales reps a concrete deadline for following up with a batch of leads (ideally within 24 hours).
- You can fix or discard broken leads. Any leads that aren’t accepted can immediately be passed back to marketing for revamping or discarding.
Leads only become SQLs when sales reps reach out to them and qualify them.
Qualifying leads in sales: A quick overview
Before you can sell to SQLs, you have to qualify them. There are several schools of thought regarding lead qualification, and methods will vary depending on the training and philosophy of your sales team.
The main takeaway? There’s no “right answer” for how to best qualify your leads. But there are some common tactics you can choose from.
Question your leads
The first qualification method involves direct communication with your leads. There are pros and cons to this strategy. On the one hand, if you’re asking someone questions and they’re taking the time to answer them, they’re probably already a good lead. On the other hand, direct questions can sometimes drive away a lead who might prefer a less direct approach. Based on your target audience, you can decide whether the qualification method is the right move for your sales team.
Some questions you may want to ask:
- Are you looking to purchase a [insert product]?
- Are you interested in learning more about [insert topic]?
- What are your current challenges?
- What are some of your immediate and long-term goals?
- What obstacles are preventing you from achieving those goals?
- Are you currently using a solution or product to alleviate your pain points?
- Are you satisfied with that solution and do you feel like you’re paying a reasonable price?
- Where are you in your buying journey?
- Can I answer any questions about our pricing plans?
- Who decides what products or services your company uses?
- Who should I speak to regarding solutions?
You don’t need to ask all these questions at once—in fact, it’s probably best not to. But asking direct questions is a great way to engage with a lead and find out a little bit more about them while also building rapport. It will help you frame your sales pitch appropriately, too. The pitch for a prospect looking to drop one product in exchange for yours will be radically different from the pitch for a prospect buying a solution for the first time.
The most important aspect of this method is documenting your conversation. Utilize a CRM to track your customer correspondence so your future communication appears personalized—not pushy—and you avoid asking the same questions twice.
Leverage lead scoring
Now let’s look at a few lead scoring models that don’t require interaction with the prospective buyer. Instead, you assign points to a lead based on various factors, such as the industry they work in or the role they have within the company. This provides a way to identify and rank leads. Use the lead scoring method that best suits your selling style and your target audience.
Explicit scoring criteria (objective):
- Job title
- Level of seniority
- Experience in the industry
- Company size
- Company revenue
- Geographic location
Implicit scoring criteria (behavior):
- Website visits
- Social media interactions
- Email opens/clicks
- Newsletter subscriptions
- Contact requests
- Contact form submissions
- Content downloads
- Free trials and product demos
Negative scoring criteria (disqualified leads):
- Unsubscribing from your email list
- Visiting your career page
- Having a job title outside the relevant industry (are they doing research?)
- Member of a rival company
Lead scoring models aren’t quite as personal as the question format, but they’re easier to track when you’re looking to score a lot of leads. Once you have a model that works for your team, set it up in your CRM so you can receive updates when you have SQLs to pursue.
Keep in mind that it’s possible to over-qualify your leads and miss out on opportunities, so take the lead qualification questions and lead scoring models with a grain of salt. A person who meets four out of five criteria is still a very good lead and certainly worth contacting.
What about pre-qualified sales leads?
Pre-qualified leads meet certain predetermined criteria, making them a good fit for a product or service. While all pre-qualified leads are SQLs, not all SQLs are pre-qualified leads.
If you take a list of SQL criteria and then only search for leads that fit those standards, you’ll identify your pre-qualified leads. They differ from MQLs, which move through the sales funnel and must be accepted and qualified when they reach the sales team.
Some look at pre-qualified leads as a more proactive way to approach SQLs. But if the MQL→SAL→SQL journey works for your team, don’t fix what isn’t broken.
Easily qualify your leads with a powerful CRM
CRM software does the heavy lifting for many aspects of your business, but particularly in lead generation and lead management. Your sales team doesn’t have the time or energy to manually qualify every single lead they come across. It’s simply not feasible.
A CRM like Zendesk Sell organizes your leads and uses predetermined criteria to qualify them. Our unique software also tracks your prospective buyers from their first interactions all the way through the sales pipeline.
When your sales and marketing teams can easily communicate and monitor leads on a simple, user-friendly platform, you can zero in on SQLs and close deals with less stress. Request a demo of Zendesk Sell today to start working smarter, not harder.