Sales-qualified leads (SQLs) are essential for sales teams to identify high-intent prospects ready to make a sale. This guide will define what they are, why they're important, how they fit into the sales funnel, and provide tips for identifying and generating them on a consistent basis.
What is a sales-qualified Lead (SQL)?
A “sales-qualified lead,” is a lead that's been identified by sales teams as being qualified for sales outreach.
They've met predefined criteria such as having a need for the product or service, budget allocated to make a purchase, authority to make the sale, and a timeline that matches up with the purchase cycle at a company.
Frameworks such as BANT (budget, authority, need, timing) or a lead scoring model are often used to qualify a lead as sales-ready.
How do sales-qualified leads fit into the sales funnel?
A “lead” is generally defined as a contact that fits the criteria for being a prospective customer, and a sales-qualified lead is a specific type of lead identified by the sales team as having high potential.
All of these terms are based on the sales funnel model, which describes the customer journey from being initially unaware of their problem and your solution, to becoming aware, interested, and ultimately ready to make a purchase from you.
While anyone that fits the ideal customer profile (ICP) could be considered a lead, sales-qualified leads are almost always distinguished by their active interest in connecting to a sales rep or using the product or service.
Sales-Qualified Leads (SQLs) vs Marketing-Qualified Leads (MQLs)
While marketing qualified leads (MQLs) may seem like a useful tool for making sales, they differ significantly in practice from sales-qualified leads.
An MQL is a potential customer that's been reviewed by the marketing team and considered to be "marketing-qualified," which means they're more likely than other leads to eventually become a customer on their own.
While every company has its own definition of a marketing-qualified lead, most organizations use behavioral actions as indicators of interest to determine MQLs. For example, if a prospect clicks a CTA, downloads an ebook, attends a webinar, or looks at a pricing page, they may be deemed an MQL.
There are a few problems with using marketing-qualified leads to fill sales pipelines.
First, MQLs are often generated based on criteria that aren't always relevant to the eventual purchase.
Marketing teams may use broad demographics or industry data to determine who qualifies as an MQL, but these factors don't always reflect whether a lead is genuinely interested in a product or service, or whether they have purchasing power, budget, and authority.
MQLs are often generated based on "soft" indicators of interest, such as website activity or social media engagement.
Soft indicators don't always indicate an intent to purchase. For example, if someone attends a webinar on "the future of account-based marketing (ABM) campaigns," they may just want to learn about ABM and without desire to purchase ABM software.
Depending on the funnel stage an MQL is in, they may need more nurturing before they are ready to buy. Some are simply at the stage where they are looking for education and need additional engagement before they are ready to talk to sales.
Sales-Accepted Leads (SALs) vs Sales-Qualified Leads (SQLs)
SALs are often the bridge between MQLS and SQLs since they have met the company's initial criteria for being considered a potential customer.
Factors that contribute to sales-accepted leads include: job title, company size, industry, intent signals,intent to offboard from a competitor, and budget.
All of this is a matter of priority. Sales teams, even large and well-funded teams, have limited time and resources. Thus, it's important to spend the most time on the highest potential leads.
Why are sales-qualified leads important?
Sales-qualified leads help sales reps prioritize their time and resources, resulting in increased productivity and revenue for the business.
When sales leaders can predict which leads are more likely to convert to customers, they can spend more time focusing on those prospects.
A sales funnel is, at some level, a numbers game.
To generate revenue and customers, marketing teams need to generate leads en masse, but it's important to ensure that all teams are aligned and incentivized to generate the right type of leads. Otherwise, effort and resources can be wasted.
Spending too much time chasing leads that aren't qualified takes time away from pursuing leads that are ready to buy, and depletes sales team morale.
By focusing on SQLs, sales teams can carve out time to build stronger relationships with the most important accounts.
How to identify a sales-qualified lead?
Identifying an SQL requires careful analysis of customer data and feedback from the marketing and sales teams.
For new sales teams, sales leaders use first principles to determine how to qualify leads.
This can be as simple as creating an ideal customer profile and matching prospects to this profile.
As an example, suppose the owner of a services business that assists brands with their search engine optimization strategy decides to concentrate on a specific industry, such as B2B software.
Within that industry, they might identify the VP of Marketing as the budget holder and decision maker, and then narrow down their ideal customer profile to include only B2B software companies of a specific size or in a specific vertical. Using technology like LinkedIn Sales Solutions can help sales professionals identify key decision makers and buying committees within target companies.
Then, sales leaders must define an "event" or action that determines the purchase intent of a prospect.
This is straightforward for inbound leads: if someone fills out a "contact sales" or "demo request" form, they're likely interested in buying.
Outbound sales are more difficult. The “event” is often the point where a prospect agrees to a meeting request.
Sales leaders running established sales programs can use LinkedIn Sales Navigator to examine potential prospects who meet certain criteria such as job title, location, budget size etc.
Then, they can build lead scoring systems that measure each contact's engagement with the company website (click-through rates on emails, page views, etc.) as well as their responses to surveys or polls sent out by marketing teams.
Once a lead scoring system has been set up, leads can be scored to identify potential sales-qualified leads!
What happens once a sales lead is "qualified?"
SQLs are enrolled in the sales process once they’re considered qualified.
Typically, a member of the sales team will set up a discovery call to learn more about the lead’s needs and preferences, and present the product or service as a solution that can help them achieve their goals.
Sales teams may use a variety of methods to connect with SQLs, like phone calls, LinkedIn InMail, emails, and in-person meetings. To stay connected to leads and continue engaging with them, sales professionals can upload leads to LinkedIn Sales Navigator, which will in turn send alerts and insights to reps identifying changes within the company.
How to generate sales-qualified leads
Get marketing to commit to SQL and pipeline key performance indicators (KPIs).
When marketing teams are incentivized to increase MQLs regardless of quality, lead volume may rise, but the number of sales-qualified leads can stagnate or drop.
Specific strategies and channels to increase sales-qualified leads include:
The best warm leads come from referrals from existing customers. These leads already have a high level of trust because they have personally seen the solution in action.
Unlike “push” messaging, content marketing is a “pull” strategy that can drive inbound MQLs and SQLs, while allowing sales teams to partner with content marketing teams to create more lead-driving content.
Sales reps can distribute content on social media platforms like LinkedIn to nurture leads. Content marketers can create gated content like ebooks and whitepapers, as well as marketing automation, to nurture MQLs to the point of being SQLs.
Running targeted ads on platforms such as LinkedIn Ads or social media platforms can drive traffic to your website and generate SQLs. Sales teams can work together with marketing teams to target specific audiences to find prospects who are already looking for solutions like theirs.
Events and Webinars
Events and webinars, coupled with contact marketing, are opportunities to connect and build trust with prospects.
Outbound sales and prospecting can also be a powerful way to generate SQLs.
By proactively reaching out to potential customers via email, phone, or social media (such as using LinkedIn InMail or Sales Navigator), sales teams can identify leads who are actively interested in your product or service and move them through the sales funnel.
Outbound sales and prospecting can be a potent method to generate sales-qualified leads (SQLs). By reaching out to potential customers proactively through email, phone, or social media channels such as LinkedIn InMail or Sales Navigator, it’s possible to identify leads who are actively interested in a product or service and move them through the sales funnel.
How does lead scoring work?
Lead scoring is an important component of identifying sales-qualified leads as well as all other types of leads.
It involves assigning a numerical value to each lead based on criteria such as demographics, behavior, and engagement levels, in order to determine and predict their level of interest and potential as a customer.
Businesses set a threshold score that represents the minimum level of engagement or interest required to qualify as an SQL.
For example, a lead who's visited the pricing page multiple times, downloaded a white paper or ebook, or requested a consultation would likely score higher than a lead who simply visited a blog post once and left without taking action.
Demographic and firmographic characteristics also factor into this score. For example, a VP of marketing may have a higher score than a freelancer or junior marketing specialist.
How to close sales-qualified leads
For most companies, the "lead nurturing" process comes before the sales-qualified lead stage.
Once they've been accepted by the sales team and qualified, they enter the sales process.
This sales process differs from company to company, but typically follows these steps to get to the close:
Understand their decision-making process:
The discovery call is usually the first stage in the sales process. This involves understanding the lead's pain points, budget, timeline, and decision-making process. This is an information-gathering exercise that allows sales reps to build a custom proposal that addresses the lead's motivations.
Address any remaining objections:
In addition to gathering information about the pain points and desired solutions, sales reps should gather as much information at this stage about potential doubts, hesitations, and objections. This may involve identifying a buying committee or other stakeholders, budget constraints, and whether the prospect is considering other competitive alternatives.
Provide a tailored proposal or demo:
The next stage of the sales process involves a proposal or demo of the product.
Provide a contract:
The last official step of the sales process is providing a contract that outlines the terms of the agreement. It's important to make sure that both parties are clear about expectations and responsibilities, as well as pricing and payment terms. Once this is agreed upon, it's time to close the deal. Negotiation may still occur at this stage.
Offer incentives or promotions:
Some sales programs leave room for discounting and custom pricing during the negotiation stage of the contract.
Follow up and stay engaged:
After the deal has closed, continue engaging and ensuring a smooth transfer to onboarding and customer success.