Generating leads is crucial for businesses, but not all leads are created equal. According to Hubspot data, sales teams that receive higher quality leads have better conversion rates, but 61% of B2B marketers send all their leads to sales, even though only 27% are qualified.

Sales and marketing experts describe the different types of leads, how to know where a lead is in the sales funnel, and how to move these leads through the buying process.

What Is a Marketing Qualified Lead (MQL)

"A marketing qualified lead (MQL) is a lead that has shown potential interest in your company and its products," explains Shane Murphy-Reuter, SVP of marketing at Intercom. He says showing interest could mean filling out an online form with contact information, downloading a white paper or registering for a webinar. Murphy-Reuter believes it's all about engagement because MQLs are "more likely to become a customer than cold leads."

While the lead has shown interest, Brian Casey, digital marketing manager at Ironpaper, said, "It's important to distinguish that [MQLs] are not necessarily ready to speak to a salesperson, but are still considering options and evaluating the market." MQLs are early on in a sales funnel, but Casey states, "The goal of an MQL from a marketing perspective is to present them with opportunities to advance to a sales qualified lead (SQL) lifecycle stage."

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What Is a Sales Qualified Lead (SQL)

"An SQL is a lead that has been researched and vetted by a company's sales team," said Murphy-Reuter. This happens through consistent communication as the prospect moves through the sales funnel and expresses clear interest in the company and its products.

Casey states, "The goal of an SQL from a marketing perspective is to speak with your team and create a potential deal that would advance the leads lifecycle stage to an opportunity." He believes an SQL should be ready to make a deal.

A Typical Sales Funnel

"MQL and SQL should not be set in stone, but should vary based on the organizational goals, sales cycle and the business' internal structure," said Don Mennig, EVP of global marketing and PR at Evolve IP. "It's most important for sales and marketing to agree on what makes sense for their unique business" In general, however, the sales funnel has a few crucial stages.

1. MQL

"Once an MQL is identified," Murphy-Reuter said, "it's critical to begin the conversion process and ensure the customer is being connected with and understood every step of the way through the sales funnel." For marketing teams to convert cold leads into MQLs, it's essential to present relevant content like email campaigns, case studies, blog posts and whitepapers.

Learning Opportunities

2. Sales Accepted Lead (SAL)

At this stage, Murphy-Reuter said the lead is "researched and vetted by the sales team and if the lead continues to express interest and is promising, the MQL is then deemed as an SAL." Mennig says not every company includes this stage, but "some companies may need to add a step for a SAL and measure conversion rates and time in the funnel between the MQL and SQL stages."

3. SQL

Murphy-Reuters said a lead "becomes an SQL once it is determined by the sales team the lead is ready to make a decision or purchase." Mennig added, "If the opportunity is a good technology fit, and in the right time frame, the sales team converts it to an SQL."

Caseys added the following, "Additional parameters that make up your ideal customer would also need to be met in order to qualify a lead as an SQL." These parameters help the sales team determine whether the lead is ready to make a decision. "Some considerations," Casey reveals, "could include geographic location, verified non-freemail email address, company size [or] industry."

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MQL to SQL: Handling the Transition

"Today, marketing and sales teams need to align on the customer experience and should think about that experience holistically," said Murphy-Reuter. Companies can do this by using a platform that integrates marketing, sales and support to encourage collaboration between business units.

Casey recommends marketing and sales teams consistently engage leads by "nurturing and presenting valuable content that leads them further down the funnel." It's essential to create content and campaigns that are relevant to specific stages in the buying process. Automation plays a crucial part for Ironpaper's sales funnel, reveals Casey with "an automatic workflow to update the leads lifecycle stage to SQL and another workflow to assign a contact owner to a salesperson."

While sales funnels may be slightly different for every company, Murphy-Reuter said, "The main takeaway here is to ensure the customer's experience is seamless, connected and contextual every step of the way — from MQL to SAL to SQL to close."