MQL vs. SQL: A Comparative Study for Strategic Lead Generation

August 30, 2023
Contributor: Shubham Gupta

Understand the difference between marketing and sales-qualified leads to refine your lead generation strategy and achieve greater sales outcomes.

Navigating the rapidly expanding software industry and the ever-evolving buyer behavior poses a critical question: Are you on the trail of the right lead or prospect? Bridging the gap between marketing and sales teams specifically in terms of communication, shared goals and synced strategies may hold the answer. As per a Gartner Digital Markets survey[*], 42% of business leaders say that when sales and marketing teams align, they connect with qualified leads at an accelerated pace. 

But where do marketing-qualified leads (MQLs) and sales-qualified leads (SQLs) fit into this picture? What's the difference? What’s their role in the sales funnel? Hang tight as we dive deep into the concept that is unclear to many yet paramount to success. But first, let’s discuss the lead qualification process for better clarity.


Understand lead qualification

Lead qualification is a vital component of a successful marketing and sales strategy, assessing the probability of prospects becoming customers. It’s a multi-stage process, classifying potential customers by their readiness, willingness, and ability to purchase.

A qualified lead is a potential customer identified by the marketing team and vetted by the sales team who matches the characteristics of an ideal client and demonstrates buying intent. Effective lead qualification is crucial for cultivating a robust sales pipeline.

Lead scoring is central to this process, ranking leads on their value to the company based on potential revenue and purchase likelihood. Assigning fit and behavior scores helps prioritize sales-ready leads, enhancing marketing-to-sales efficiency and increasing deal closures.

While lead qualification carries its share of challenges, a few keys to success can drastically elevate the process's effectiveness. Let's dive into a swift rundown:

Lead qualification: common pitfalls and keys to success

Also read: How to Generate More Qualified B2B Leads: Strategies, Tips and Tools


What are marketing-qualified leads (MQLs)?

A marketing-qualified lead is an individual or entity that shows interest in your software solution and is perceived as a potential customer, yet they're not ready for a direct sales approach. MQLs need lead nurturing to help them progress through their buying journey and meet the criteria necessary to be passed along to the sales team. 

Key characteristics:

  • Engagement: MQLs typically show a higher level of engagement with your content or brand, compared to SQLs.
  • Fit: They align well with the company’s target demographic and buyer personas.
  • Intent: While not ready to buy, they display behaviors indicating potential interest in purchasing.

Identification of MQLs is a crucial part of the lead generation and conversion process. Here's how they're usually identified:

  • Engagement metrics: Metrics such as webpage visits, content downloads or email opens can indicate a lead's interest level.
  • Demographics: Information such as age, location and job title can help identify if a lead fits the target customer profile.
  • Lead sources: Web traffic, events and paid media advertising are the best-performing channels for MQL generation.

MQLs’ role in the sales funnel

MQLs occupy a vital mid-funnel position. They have moved past the initial awareness stage and are in the consideration phase, making them prime targets for nurturing campaigns to push them further down the funnel.

For tech providers, one of the best channels to generate MQLs are pay-per-click (PPC) campaigns in software review sites. By promoting your solution at the top of category searches across software comparison sites such as Capterra, GetApp and Software Advice, you connect with buyers in your target industries when they’re actively researching software solutions. Leads are directed to your campaign landing page, where they convert into mid-funnel leads (MQLs).

In Mind Cloud’s MQL success story

In Mind Cloud, a manufacturing sales platform SaaS startup, needed an efficient way to generate more leads with a focus on the US market and scale growth. The company launched a PPC campaign with Gartner Digital Markets and succeeded in gaining high-quality leads while maintaining control over a limited budget.

According to Falk Brauer, Managing Director at In Mind Cloud, "Gartner Digital Markets is our most important inbound channel. It has provided a stable flow of leads over time, and our budget can easily be adjusted according to our business needs.”

Despite being in cost-consolidation mode, In Mind Cloud saw a high ROI and continues investing in lead generation through Gartner Digital Markets, attributing 20% to 40% of their monthly MQLs to these campaigns.

Also read: 10 Key Metrics to Measure PPC Campaign Success


What are sales-qualified leads (SQLs)?

A sales-qualified lead is a prospective customer who has moved through the sales pipeline—from a marketing-qualified lead through a sales-accepted lead—to a position where the sales team can now work on converting them into an active customer, typically through a direct sales pitch.

Key characteristics:

  • Intent: SQLs demonstrate a high intent to purchase your software to resolve a clear need or problem.
  • Budget: They have the financial resources required to adopt your solution.
  • Time frame: They're prepared to make a purchase within a reasonable time.

You can easily recognize SQLs by evaluating:

  • Purchase signals: Direct inquiries about product pricing, implementation or functionality.
  • BANT criteria: Assessing their budget, authority, needs and timeline.
  • Engagement depth: For instance, if they've requested a product demo or attended product-specific webinars.

SQLs’ role in the sales funnel

SQLs are positioned at the bottom of the sales funnel. Having transitioned from MQLs, they stand at the decision-making phase. The sales team must approach these leads with tailored pitches and solutions, as they're on the brink of conversion.

Pay-per-lead (PPL) models can effectively help in sourcing SQLs. By investing in leads with a higher conversion probability, businesses can ensure a more direct ROI. PPL campaigns prioritize quality over quantity, focusing on acquiring leads that match your company's defined criteria for sales-readiness.

Careficient’s SQL success story

Careficient, an electronic medical records software company, needed a solution to fill its pipeline with sales-ready leads with a limited budget. The company launched a PPL campaign on Gartner Digital Markets, and within a few months, Careficient was closing 50% of these leads.

Brad Caldwell, COO of Careficient, attributed the company’s close-rate success to the seamless integration of PPL campaigns with its CRM, alongside their fast-acting sales team. "Gartner Digital Markets is very much an extension of the sales team; they are quick to respond and have been a very effective part of our qualification process.” 

Over three years, Careficient achieved over 370% growth and plans to continue partnering with Gartner Digital Markets to bolster its demand generation efforts and maintain scalable growth.

Also read: How B2B Marketers Can Generate High-Quality Leads


The handoff: Transitioning MQLs to SQLs

Transitioning an MQL to an SQL involves nurturing the lead through the sales funnel until they demonstrate clear buying intent. It's a delicate process—84% of business leaders acknowledge that the marketing-to-sales handoff is one of the most significant challenges they face in aligning their teams effectively[*].

Despite the challenge, a successful handoff can significantly bolster conversion rates. In fact, 66% of business leaders cite establishing a lead-qualifying and scoring method as one of the most effective measures for successfully aligning sales and marketing teams[*]. Here are some best practices to ensure a smooth transition:

  • Define clear criteria: Both marketing and sales teams should agree on the definitions of MQLs and SQLs, and the indicators that a lead is ready to transition.
  • Implement a lead scoring system: This can help determine when an MQL is ready to become an SQL based on their engagement level, behaviors, and other factors (such as demographic information, interaction with content and purchase history).
  • Regular communication between teams: Regular meetings and updates between the marketing and sales teams can help ensure no lead falls through the cracks.
  • Use a shared customer relationship management (CRM) system: This allows both teams to track and manage the progress of leads in real time.
An example illustrating how to move leads down the funnel

In the given example, you can understand the progression of a lead, Jane Doe, through the funnel stages as follows:

  • Marketing-qualified lead (MQL): Jane Doe's engagement with content such as blog posts and webinars marks her interest and qualifies her as an MQL.
  • Sales-accepted lead (SAL): Jane's request for a product demo advances her to the SAL stage, where her interest is deemed strong enough for sales engagement but not yet fully qualified.
  • Sales-qualified lead (SQL): Post-demo, Jane's intent to buy is confirmed, and she becomes an SQL, ready for the sales team to finalize the purchase.

In this example, Jane's progress from MQL to SAL to SQL represents the systematic nurturing and qualification of a lead. The seamless collaboration between marketing and sales, guided by lead scoring and a shared CRM system, helps transition Jane through these stages, each reflecting a deeper level of interest and readiness to buy.

Accelerate conversion rates across the funnel

Understanding and effectively navigating the nuances between MQLs and SQLs can drastically amplify your sales outcomes. With clear distinctions and efficient transitions, you harness the true potential of each lead. Take a moment to evaluate your lead qualification process. Could it be more efficient? 

Strategic lead generation programs can help you optimize your conversion rates and accelerate the sales cycle. Don't let potential customers slip through the cracks. Capture, nurture, and convert your leads more effectively with Gartner Digital Markets.

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Shubham Gupta

Shubham Gupta is a Content Writer at Gartner Digital Markets who ideates and creates purpose-driven content to help modern technology businesses achieve their goals. Outside of work, he enjoys reading thriller novels and Urdu poetry, as well as spending time with his dog. Connect with Shubham on LinkedIn.



*Gartner Digital Markets' 2023 Marketing and Sales Alignment Survey

Gartner Digital Markets' Marketing and Sales Alignment Survey was conducted in June 2023 among 175 U.S. respondents to learn more about the benefits and obstacles of integrating sales and marketing teams. Respondents were screened for roles in marketing or advertising at companies with 101 - 2,500 employees and more than one full-time sales employee and more than one full-time marketing employee.

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