Sales Qualified Leads: A Crash Course on SQLs

Attaining the distinction of “salesperson of the year” is something most sales reps dream about. Another might be hearing, “Great to talk to you; I’ve been waiting for your call” upon their first contact with a lead.

It would be great if reps could expect this sort of reception from every lead they reach out to. But it is challenging for most organizations to provide high-quality leads consistently. 

That can be due to a lack of alignment between sales and marketing and of a shared understanding of the two types of leads: marketing qualified leads (MQL) and sales qualified leads (SQL). 

Businesses that can easily distinguish between leads that aren’t ready to be approached (MQL) and those that require the immediate attention of a sales rep (SQL) are better positioned to drive more revenue.   

We’re going to focus on defining and exploring what constitutes an SQL.

What is a Sales Qualified Lead? 

A sales qualified lead is a high-quality lead that’s been vetted and qualified by the sales team to move further down the sales funnel. Sales qualified leads are ready to be handed off to an account executive (AE) to work on closing a deal.  

Leads reach this distinction courtesy of the marketing department, whose nurturing and qualification efforts make the transition from MQL to SQL possible. It’s a transition akin to presenting something on a platter — marketing serves up a potential customer that has a strong possibility of converting.

Moving from MQL to SQL (Example)

As an example, say you’re revisiting an online custom furniture site. You want to purchase a sectional couch to fit in your newly renovated basement. 

During your previous visit, you looked through multiple couch designs, downloaded product spec sheets, and then left the site. You showed enough interest in the product, making you a marketing qualified lead.

On this visit, you fill out a web form to be contacted by a sales rep. Based on the business’ lead scoring, you demonstrated a key characteristic of sales qualified leads — an intent to buy or interest in continuing the buyer journey. 

Going from being interested in the product to showing intent to buy is the start of a lead moving from MQL to SQL, but it doesn’t make you a sales qualified lead. 

The business doesn’t know if you’re ready to place an order or just looking for more information. If all you wanted to know was how much the couch would cost or if they offer any financing, it wouldn’t make sense for a sales rep to try to sell you right away. 

A sales development rep (SDR) needs to get in touch with you and ask qualification questions (using a framework like BANT) to determine whether you need more nurturing, are ready to be handed off to an account executive, or aren't a candidate after all.

You only become a sales qualified lead once you meet the business’ qualification criteria and are ready to be handed off to an AE.

Sales Qualified Lead Characteristics

You have your lead from the marketing team, and now it’s time for you to reach out and get some more information. 

As you’re having your qualification call, here are some SQL characteristics to look for so you’ll know when it’s time to hand off a lead:

• A willingness to engage: You’re not just talking about your product’s features and functionality. Your contact is revealing important information about their organization. You’re building the case for your solution together. 
• A pain you can address: Your contact has shared with you a specific problem your solution can solve. 
• A budget and authority to sign off: Your product or solution falls within the lead’s budget and the lead has a role in the decision-making process.  
• A sense of urgency: There’s an urgent need for your solution. They are looking to make a purchase now, not three months or a year from now. 
• A level of trust in you and your company: You’ve established a professional relationship and instilled trust in your company — both are important given there are alternatives to the products and solutions you provide. 

What constitutes an SQL is different across organizations so you’ll need to establish your own unique criteria.

Why Defining SQL Must Be a Team Effort

A large majority of B2B leads — 73% according to one study — aren’t ready for sales. 

There are real consequences for sending leads to sales prematurely — wasted time and resources for one. But the real cost is the loss of faith and trust across teams. 

If an account executive continues to receive bad leads, they won’t tend to every lead that is sent over by the SDR. They’ll begin to pick and choose the leads they feel have a high chance of being an opportunity and later closing. 

As a result, the SDR will be frustrated since the number of leads accepted by the AE and turned into deals impacts their compensation. The SDR will then look to send leads to another AE with a higher percentage of closed-won deals. 

Ultimately, this can negatively impact the SDR-to-AE handoff process, which will impact revenue.

How to Develop Your Business’ SQL Criteria

That’s why it’s so important to establish criteria for what constitutes a sales qualified lead in your service-level agreement (SLA). Here’s a couple of ways you can determine if a lead is in the market.

• Examine lead behavior: Take into account the overall picture of their interaction with your site. For example, did they view high-level marketing assets or did they dig deeper into technical specs and integrations, pricing, and professional services?
• Leverage lead scoring: Fine-tuning your lead scoring system is important, especially if you have a lot of visitors to your site. Assigning positive and negative values to potential behaviors can reveal a more accurate understanding of visitors’ intent. And it will help you choose the right threshold for a lead to be deemed sales-ready.  

Gathering this information should be considered the starting point for establishing the right criteria for your business; a roadmap that instills confidence and maximizes productivity within the sales organization — and drives more revenue for the business.

What Happens Next with Sales Qualified Leads

Typically, the next step is to hand off the lead to an account executive. How this is done will depend on your process but the outcome should be that the lead has a booked meeting with the AE. 

The AE then further qualifies the lead to determine if there is an opportunity to generate sales revenue. If the SQL becomes an opportunity, the account executive will initiate the sales process. 

It’s important that a proper lead handoff process is established to increase the chances of leads becoming opportunities and later generating sales revenue.