MQL vs SQL vs PQL - A New Way to Categorize Leads

I don't know if you're aware of this, but...

Your business is built on a foundation of these three ways of defining and categorizing your customers (or users) - MQL, SQL, and PQL.

They’re it, the triad-pillars of lead generation... the whole enchilada and ball of wax. 

Once you key in and truly SEE them and define them relative to your company, you become like Neo during his first combat lesson in the dojo with Morpheus. 

You’re no longer just a disheveled marketer in a quasi-predetermined sea of curated and choreographed competition…the rules aren’t the same anymore.

You’ve changed. 

First, let’s see what these mean briefly.

Then we’ll go a bit deeper, keeping it basic, but with enough emphasis thrown around on these terms that they become incredibly useful tools for you. 

What is MQL? Marketing Qualified Lead

Your company is a fortified compound, with your marketing content serving as a network of tripwires.

Their job’s to alert you whenever anyone is a) in your area, and b) interested in getting inside to hopefully make a purchase.

What matters is how you define an MQL, which is relative to your marketing itself. 

Some common tripwires or examples of MQL-signifying actions these days include:

• Downloads of all kinds - software, ebooks, brochures, PDFs, reports, etc. If they’re hitting the download button, that’s typically a huge step beyond merely consuming your freely-available content. 
• Deciding to dig in and experiment with demo-based content. This is hyper-relevant to the SaaS model, which we’ll be looking at further momentarily. 
• Not just filling out forms but sending them; requesting more info.
• Or, submitting personal data to join a newsletter or mailing list.
• Vanity actions - liking, tagging, tweeting, clapping, 5-starring your thread, etc.
• They consume a LOT of marketing content - time spent/engagement metrics. 

Obviously, MQLs are important.

As you break down your processes and systems, you’ll start scoring or assigning value to different actions because you’ll begin mapping your unique 80/20.

Meaning 80% of your leads will predominantly come from around 20% of your marketing content. 

The rest will either fall flat, disappear into the digital ether, or just bring in trickles of leads over time. 

An easy example here are the scores you would give to people who simply read and hit the like button on a social post, vs. someone coming from specific email newsletter content. 

• For all you startups, the vast majority of MQLs will have a low chance of a sale. You’ll find it takes a while to pay your dues and build enough data to start reacting to it.
• In terms of traffic, many MQLs have no intention of purchase and are using your content in some other way: students, researchers, competitors, misclicks, journalists, etc. 
• That said, MQLs are separate from general leads. They help you make your marketing content better - a CRO (Conversion Rate Optimization) professional’s silly putty.

Simple stuff.

Now how about some ways to boost conversion rates of MQLs?

Sure thing!

5 Ways to Dramatically Improve MQL Value

Improving the value of MQLs is easy to imagine, but takes time and dedication to execute properly.

Let’s take a minute to look at five easy ways your business can steadily do just that.

Of course, each one of these is a small library unto themselves. 

#1: Inbound Marketing

Content based on hyper-relevance and non-sales information that communicates value, value, value. 

#2: Align Marketing & Touch-Off Sales Content

There should be an easy handoff that flows within your process from marketing lead to SQL, not a jarring experience. 

#3: Personalize Important Messaging

Your follow-up communications, About Us content, some onboarding content, highly-tailored and segmented content, etc.

Make it personal and add the ‘feels’ or it will sound like every other mechanical-sounding communication people are bombarded with in everyday life. 

#4: Highlight Success

Features and benefits are invaluable, but what we’re talking about here are stories, reviews, and testimonials of user success.

How much of your content does nothing but showcase success? No marketing. No sales. Just success.  

#5: Perform Regular Audits

Take time each quarter, or annually, or whatever works, and audit both your messaging/communication and the ways you’ve been scoring or categorizing your MQLs.

With all those juicy basics of MQLs out of the way, let’s move on to the next level of lead mastery - the SQL.

SQL - Sales Qualified Lead

Once again this definition completely relies on your particular business model, the complexity level of your customer sales cycle from awareness to sale, and how you’ve set your content up. 

Where do you draw the line between someone who’s a clear Marketing Qualified Lead based on their consumption of your content...

and an individual who’s demonstrably ready to fork over some dough?

Let’s look at a few examples. 

• Ecommerce: Simple - they click the purchase button and make it through the payment process, or, reach out to you using your ‘Product Questions’ contact form to get more pricing information.

• Car Sales: They go from gawking at the sports car and talking to your on-the-lot car guy, to heading inside to literally grab the keys for a test drive...or skip that and go straight to talking turkey with a sales person behind a desk and computer. 

• Trade: They Googled around looking for a local bathroom remodeler, found you, read a blog, read some of your reviews, checked the BBB, hit up your website and submitted the ‘Request a Free Quote’ form. 

• Local Consultancy: They came across your card in Dr. X’s office, checked your website, downloaded your brochure, then drove to your office and walked through the front door. 

• SaaS: They’ve talked with your product discovery team to learn as much as they need and now they’re asking about pricing and package offers.

If your marketing does its job, by the time people become SQLs they should be ready to make a purchase or begin paying for your service. 

Because no one wants to answer that cold call from an unfamiliar number. 

...no one wants to open and read that cold email. 

...no one appreciates that cold text.

...no one wants to have to hold onto that cold flyer.

Honestly, there are very few contexts today where people want to prematurely speak or engage with a ‘salesperson’. The era of conventional sales was dead and buried a decade ago...hence the rise of inbound marketing we just mentioned.

So to summarize, an SQL is a lead that’s taken a step beyond discovering your product or service, or learning more about it, or experimenting with it, to “I’ve got my money in hand.”

HELP! My SQL Conversion Rate is Too Low

Okay, we’re going to imagine you’ve got mountains of people who REALLY respond to your marketing content...

SQLs are (figuratively) blowing up your call center.

A quarter’s gone by and you’ve looked at the numbers, and your conversion rate seems low. 

How low is it?

Another important question is, how low is low?

Deeper yet, how low is low in your specific niche?

Many niche’s these days see general (depending on who you get your research data from) conversion rates between 8%-15%. 

Regardless of what your sales numbers are right now, here’s four easy ways to improve these leads. Think of it more like a checklist.

Audit Your Nurturing Processes

Some, well, MANY, companies don’t nurture their SQLs near enough or appropriately.

Meaning it’s not contextual, but feels extremely general and out of character for the company. 

An example would be, you signed up to join a rock band’s newsletter and suddenly you’re getting general sales messaging from a huge national chain of guitar stores. Where’s the communication with the band? Where’s the peak at the video for their upcoming hit single? Where’s the rare content?

On the other hand, don’t overdo it and don’t try to nurture anyone who isn’t ready and willing. 

Creative Persistence

You’ll only need to do some light fact checking to see you’re perfectly in the clear to try more than once.

In fact, most marketing gurus out there will admit you should really never just try once.

How many times is your process setup to perform well? If it’s only once or twice, you’re likely to struggle.

For a simple framework to build from, shoot for at least five offer-based touchpoints with the opt-out option always there.

No one should feel forced to go through your solicitations. They should have the ability to walk away at any time but be persistent in a creative way that’s not too salesy and you’ll see numbers improve. 

Examine Timing - Iterate

When was the last time you filled out a form online expecting to receive an email right after hitting the send button...

but that ebook, or brochure, or reply from the company doesn’t pop up.

Not right away. Not for an hour, a day, two days... 

At this point regardless of when it arrives, it’s likely to be irrelevant to you then, right?

Timing really is a big part of EVERYTHING in life. Don’t be a company that isn't keenly aware of the timing in your sales process. Most customers are expecting prompt, respectful, and well-timed communications. 

What we’re really circling here with all these wagons is customer service - make yours outstanding. And that’s a great place to transition into the third and most valuable pillar of lead generation, PQLs.

PQL | Product Qualified Lead

Strictly speaking, these people have used or are using the product or service - most applicable in the SaaS free trial and freemium models. 

Although you could certainly apply aspects of PQLs to other industry contexts.

For our purposes though, let’s focus on the SaaS model where your potential customers are able to get into the kingdom for free (ultra-low barrier), use the service, and then ideally become a paying or upgrading customer. 

How many digital services, or software-based services, do you use that you’ve ended up paying to upgrade?

In that grey area between free user to paying customer, you were a product qualified lead. 

Thing is, most consumers are accustomed to using software products for free or insanely cheap. 

Once we step into the B2B world the costs go up substantially, as does the complexity of the sales cycle from awareness to wide-scale adoption by their company.

• From free Google users to companies shelling out fortunes on their paid advertising.
• From free Slack users to the companies paying for all the juicy upgraded features.
• From consumers buying off Shopify sites to a company with their eStore on the platform.

Of course there are endless SaaS examples, and each is as rare and spectacular as the next. So to steer away from turning this into a marathon-like marketing article, let’s talk about three quick points regarding Product Qualified Leads.

#1) When PQLs Run - Start Recording

The feedback you capture from PQLs who choose to slowly back out or abruptly turn away in disgust is invaluable to the betterment of your product.

Each review from a lost PQL, each critique is a potential goldmine of…

“OMG, how did we miss that?!”

These revelations aren’t always negative.

• Sometimes you just forgot to dot the one-of-a-thousand I’s in your software.
• Sometimes you just didn’t see it that way because you’re a software engineer.
• Sometimes angry PQLs hand you your competitive edges on silver platters. 

#2) Don’t Slow Down The Checkout Aisle

Another critical point. 

Imagine you walk into a store, browse around, then grab a couple things and go stand in the checkout aisle. Suddenly, a store associate walks up to you since you’re in the checkout aisle to ask you a bunch of questions and pick your brain as to why you chose to do this or that. 

Ugh…

Because from a conventional perspective these three distinctions - MQL, SQL, PQL - all require the capture of data, many companies risk bogging down the buying process in the hopes of improving revenue.

How can your data points tell you why people are buying or not?

This takes your company down the road of lead qualification and learning how to speak with users.

Eventually, the relationship transforms, which brings to mind a great quote:

“You know you are running a modern sales team when selling feels more like the relationship between a doctor and a patient and less like a relationship between a salesperson and a prospect… It’s no longer about interrupting, pitching, and closing. It is about listening, diagnosing and prescribing.” 

– Mark Roberge

Hence, why effective associates are there to hopefully help the person who’s obviously never been in the store before; the person who looks lost, confused, or like they’re having trouble finding something they want (need). 

Customer service should be focused on the customer, not the business through the customer.

#3) Don’t Operate a Charity for PQLs

In your rush to cater to your steady stream of PQLs, be careful not to give away all your most valuable assets for free.

Within the blink of an eye, suddenly you transform from a revenue-generating SaaS into a software charity.

Have you seen this before?

Sure, it takes strategy and plenty of elbow grease to get right, but when properly layered, freemium-to-premium SaaS models are astoundingly effective. When structured improperly, it’s astounding how quickly they can crash and burn. 

Speaking of which…

How about improving PQL conversions?

You just need a better user onboarding!

Let’s briefly look at how user onboarding in SaaS companies secure better leads of all three distinctions and then we’ll wrap this up.

User onboarding processes are the biggest, most powerful and influential factors that increase or decrease the value of your PQLs. 

From Sign Up > To Trial User > To More Advanced User > To PQL > To Paying Customer

How are you helping people get through each stage of this ‘funnel’ so to speak?

This is where the real PQL rubber meets the road to either success or back to the drawing board. 

• User Onboarding: Don’t completely leave users to their own devices with a bunch of techs looking at them, when you can easily (and in an impressive way) increase retention and show them how your service works - leading leads to success. 

• Feature Adoption: Introduce new features, promote, and highlight them, helping users discover more benefits and more value without weighing their experience down. 

• In-Product Messaging: Within your product, you can offer educational content that’s 100% curated for different user segments depending on where they are in the process - embedded videos, promotional highlights, easy pop-ups announcements, etc. 

• Capturing Feedback: Get the qualitative and quantitative feedback your company needs to better understand users, iterate, and implement exciting new UX or feature-based decisions...in a non-obtrusive, light, and extremely user-friendly way. 

• Interactive Help Center: If your particular framework is high-complexity and high-price, there’s likely to be a fair amount of hand-holding going on. Interactive help center software makes it instant, real-time, and intuitive. 

UserGuiding does all that!

UserGuiding is a user onboarding software that helps you create the best experiences for your PQLs and turn them into fans of your product.

Whether it is user onboarding, new feature adoption, in-app messaging, getting feedback, or simply getting an interactive help center running, UserGuiding can help you do guide your first time users to success.

You can easily highlight a path to your Aha moment with UserGuiding, as the product doesn't require coding and is extremely simple.

You can try UserGuiding for free, right now:

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Wrapping Up - A Quick Summary

This article is for folks looking for insight into the three core foundational pillars of lead generation. The ideas themselves are incredibly subjective and dependent on your unique business model, most specifically PQL which is geared for SaaS free trial and freemium models. 

Ultra-basic definitions:

• MQL - Marketing Qualified Lead:  A lead deriving from marketing material of some kind - they’ve at least shown interest in your content. 

• SQL - Sales Qualified Lead: A lead that’s demonstrated interest in your product or service beyond merely consuming content. 

• PQL - Product Qualified Lead: A lead that’s used or is currently using your product or service and is showing interest in upgrading in some way.