I have come across many marketing organizations that use the metric of “Marketing Qualified Lead” or MQL as the goal that drives B2B marketing demand generation.  Theoretically, if marketing supplies the required number of MQLs, then sales will hit their revenue goals.  Neither part of this statement is accurate, but for this posting, we will discuss why just hitting an MQL number doesn’t work.

MQL by itself is not useful since there is no descriptor to the quality of the leads provided. Leads have tremendous variability in quality.  Without adding a quality metric to MQL, marketing can deliver what they perceive to be good quality leads, but actually clog the sales organization up with ineffective sales motions.  Talking MQL without a quality metric is like buying a bottle of wine for a dinner party without regard to the vineyard or grape.  Yes you brought your host a gift, but there is a broad spectrum of the quality of that gift.

What is the measure of MQL quality?  The ultimate measure is whether that lead generated an opportunity in the sales pipeline.  Different organizations use different nomenclature for this, for the purpose of this posting, we will call it the SQL (sales qualified lead) conversion rate. So if marketing delivers over the course of a few days 100 MQLs from a pay per click program, and over the following 30 – 60 days these leads turn into 10 opportunities or SQLs, then this program has a 10% SQL conversation rate.  In shorthand, marketing delivered 100 MQLs at 10%.

The “at 10%” descriptor is critical since it governs so much in the sales process.  Deliver a ton of poor quality leads over the course of a year, and not only will you clog up the sales organization, you could force incremental hiring to keep up with the flow. Deliver MQLs without a quality expectation and the sales team and marketing team have no easy way to discuss quality.

Of course SQL conversion rates rely on having a trained sales organization and a prompt lead follow up process that ensures leads get the attention they need.  These are all required areas of measurement. But assuming these metrics areas are within specification, leads need to convert to opportunities at a required rate.

Of course what is the required conversion percentage?  What is good quality?  That is a good discussion for another post.  It really depends on the products average selling price and margin, the cost of the sales people making the calls, and the average call capacity the sales people have.  In an extreme case, expensive sales people, not making many calls per day to poorly qualified leads is probably a financially losing proposition.  Whereas inexpensive sales reps, making massive numbers of calls to qualified leads, probably works well.

More in a future post, but until then, don’t talk about MQLs without adding the @ xx% metric to specify quality.