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BLUE SAGE on Business: Spotlight on Sales and Marketing Alignment/3

Inbound businessIn my first post on the sales and marketing alignment topic, I shared an alignment checklist that I’ve created and refined over the years. My third post in the series discusses how to understand MQL-to-sales opportunity metrics and issues.

The marketing-to-sales lead process should be simple right? Marketing generates quality leads, sales happily accepts them, deals close, the MQL to SQL (Sales Qualified Leads) conversion rate is almost 100% and everything is wonderful, right? Absolutely WRONG!

If marketing holds onto every lead until they are absolutely certain it’s a lock-down SQL, bad things happen, like:

  • Losing your selling window. Remember, buyers are in control. They buy on their timeframe, not yours. Wait too long and the buyer will be locked into another vendor or on to another project.
  • Losing out on good leads. Qualifying leads isn’t an exact science.   Marketing can err on the conservative side – knowing that some good leads might not get to sales (what we in the marketing demand gen world call a “False Negative”) or marketing can be more aggressive knowing sales will get some “False Positives”.

(Note: for those not familiar with the term, a False Positive would be a lead that appears to be sales ready by displaying buying behavior, such as watching demos, looking at pricing, or downloading RFP templates, but in fact they are still just researching.) In order to rapidly get leads to sales, most companies will accept “False Positives” provided it doesn’t get out-of-hand.  I recently talked to one CEO who was seeing a 90% MQL rejection rate, meaning that only 1 out of 10 leads was actually sales ready. Now that’s out-of-hand, although it’s not uncommon.

So what’s the right MQL to SQL conversion rate? Today’s best practices hover around 60%. Get close to this and you likely should be feeling pretty good. But to get the full story you need to be looking at a bunch of other metrics (metrics that a good closed-loop marketing automation/CRM system should be able to cough up quickly), such as:

  • % of MQLs resolved – meaning the rep was able to reach the prospect and conduct a discovery call. Somehow the best reps always seem to have the highest percentage, but there can be other reasons for varying rates. For example, at one point my tele-qualifiers were passing MQLs over without setting appointments as the reps wanted to own their calendars. With this process we were only getting a 30% resolved rate and a 15% MQL conversion rate. Once the tele-qualifiers started to schedule meetings the resolution and MQL conversion rates tripled.
  • % of MQLs disqualified with bad info (bad contact info, wrong role, not employed at company, company not in the right region, size, etc.). This number should be low, but important to watch to insure the demand gen process is aligned correctly. For example, perhaps a marketing list was created with companies that are too small or a tele-qualifier is misunderstanding the qualification criteria.
  • % of MQLs returned to marketing for nurturing (right company type and role, but doesn’t fully meet MQL definition). In other words, these are your “False Positives” and at some point down the road, through nurturing efforts, they hopefully will be ready to buy.

These metrics can differ by marketing campaign, by region and by sales rep, so understanding them helps both marketing and sales adjust behavior and to improve the conversion rates. What trends are you seeing in your company?   Your comments on this post and overall on your experiences and insights on the lead conversion process and metrics are welcomed. Note: Future posts will address each of the other items on my checklist as well as a Sales Enablement Alignment checklist.

About the authorJeff Whitney is a B2B software marketing executive with extensive experience  –  from early stage start ups through achieving marketing equity.   Jeff has a passion for building a world class marketing function, starting with the organization, demand generation programs, sales enablement tools and of course, aligning sales and marketing.



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