Using your blogs, social media handles, email campaigns, etc. to generate marketing qualified leads (MQLs) is important, but your job doesn’t end there.
You need to nurture them into sales qualified leads (SQLs) — ones that make sense to your sales team and ultimately become your customers.
Wondering if your MQL to SQL conversion rate is good enough?
In this article, we’ll reveal what MQLs and SQLs are, the ideal MQL to SQL conversion rate by industry, its significance, and five awesome ways your SaaS company can improve it.
We’ll also discuss the latest buzzword in the B2B SaaS industry — PQLs (product qualified leads) and why they’re more relevant than MQLs or SQLs.
Finally, we’ll introduce you to a powerful tool that lets you build a pipeline of product qualified leads in no time.
MQL vs. SQL: What Are They?
A marketing qualified lead is a prospect who engages with your marketing resources such as blogs, eBooks, how-to guides, etc. While a marketing qualified lead seems interested in your product, they may not be ready for that sale yet (or ever!)
A sales qualified lead meets the criteria of your ideal buyer persona. The lead qualification criteria may differ based on your company size and offerings, but in general, a sales qualified lead has:
- A requirement for your product.
- Expressed an interest in your product.
- The budget to buy your product.
- The authority to make the buying decision.
In short, they’re ready for that one-on-one with your sales rep!
The transition from marketing qualified to sales qualified often starts when the customer requests more information, asks for a demo, or wants to speak with a sales representative.
The more sales qualified leads you procure from your pool of marketing qualified leads, the better your lead conversion rate.
And if you want to assess where you stand against world-class SaaS companies, keep tabs on these conversion rate benchmarks.
What’s a Good MQL to SQL Conversion Rate?
The MQL to SQL conversion rate benchmarks for some of the biggest SaaS-based industries are:
- Automotive SaaS: 39%
- CRM and financial SaaS: 42%
- Chemical or pharmaceutical SaaS: 46%
- Education SaaS: 35%
- Healthcare SaaS: 43%
- Security SaaS: 38%
Want to see how you measure up?
Get ready to crunch some numbers and find your MQL to SQL conversion rate!
How to Calculate the MQL to SQL Conversion Rate
The formula to calculate your lead conversion rate is as follows:
MQL to SQL conversion rate = No. of sales qualified leads / No. of marketing qualified leads*100
Let’s illustrate this with an example.
If your B2B marketing campaign generates 100 marketing qualified leads and 34 of those convert into sales qualified leads, your conversion rate is 34%.
But why do you need a good conversion rate?
Importance of MQL to SQL Conversion Rate
Your MQL to SQL conversion rate can help you:
- Assess the effectiveness of your product’s marketing campaign based on how many sales qualified leads it can pull in.
- Discover the frequency with which leads in the sales funnel are becoming sales-ready.
- Constantly evaluate and evolve your lead generation strategies based on the percentage of unqualified leads you end up with.
- Understand how well your team generates SQLs and which sales representative deserves the Employee of the Month award. 🏆
And if your MQL to SQL conversion rate is lower than the benchmark you’re striving for, it usually means one of two things:
- Your B2B marketing campaign isn’t connecting with the right audience or buyer persona.
- Your marketing team needs to fine-tune the lead generation process and nurture leads more before passing them on to sales.
Here’s what you can do for a good conversion rate:
- Tweak the existing marketing campaign so your B2B marketer can attract better leads from different digital marketing channels.
- Improve your qualification process to ensure your sales rep only interacts with quality leads in the sales funnel.
So what to do when you have too many unqualified leads clogging up your sales pipeline?
Five Ways to Supercharge Your MQL to SQL Conversion Rate
Drum up more sales qualified leads and boost the average conversion rate with these tips:
1. Align Your Sales and Marketing Messaging
Often, your marketing team blames the sales department for not closing the sales opportunity. Meanwhile, your sales team may blame the marketing department for giving them dud leads.
So how do you turn these enemies into allies?
By getting the narrative straight.
What do we mean?
Marketing communication is centered around your product’s USPs and how it solves user challenges.
The sales team should stick to that same story when a lead is passed on to them by any B2B marketer.
Any mismatch in the messaging can:
- Confuse your leads
- Lead them to question your company’s credibility
- Waste your team’s marketing efforts
- Slow down the sales process
- Affect your average conversion rate
In fact, both the sales and marketing teams should define the core lead generation metrics together. By agreeing upon what qualifies as a marketing qualified lead, sales accepted lead, and sales qualified lead, they’re poised for greater efficiency.
2. Personalize Your Follow-up Communications
Remember — the path to conversion looks different for almost every customer, especially in the B2B sales cycle.
Your sales development rep should be able to personalize the communications to give every sales opportunity what they want.
- If leads are looking for the legitimacy of your product, provide them with testimonials and case studies.
- If they want to weigh their options, share a side-by-side comparison table highlighting your product’s features against that of your competitors. ⚖️
- If they want to see exactly how your product works, send them footage from past webinars.
- If they want to take your product for a ride, let them sit in the driver’s seat with a free trial and/or demo. 🚗
This way, the team can provide leads in your sales cycle with the right content and personalized responses to help them cross the finish line. 🏃
3. Evaluate Your Product Offerings
A great marketing strategy can help you lure the right customer from different marketing channels.
But only an intuitive, user-friendly product can lead to a purchase.
Woo your marketing qualified leads by sharing the latest product updates and releasing beta features.
But don’t shoo them away with a complicated onboarding process or tough-to-follow tutorials.
Launching beta features and how well users respond to them can help you gauge whether the feature is useful and in demand. You can understand whether customers really want that specific feature before you develop it further.
To evaluate what’s working or not working, you can also monitor product usage data. It’ll help you understand which features your leads find most useful in a way that they’re prompted to make a purchase.
And get this — Toplyne is a headless AI tool that integrates with product analytics tools like Amplitude and Mixpanel so that you can craft a more data-driven marketing strategy.
4. Equip Your Sales Team with Success Stories
Does your sales development rep launch off on a monologue about the product at every opportunity?
Ask them to ditch the ‘show up and throw up’ strategy.
Let your case studies do the talking. 📢
From start to finish, an effective case study depicts your product’s capability of solving a buyer’s problems.
Besides your marketing efforts, these success stories could be the last thing a lead needs before hitting the ‘buy’ button.
Case studies also help you with demand generation — driving awareness for your product in the B2B circle.
5. Refine Your Lead Scoring System
Is your lead scoring system outdated?
Lead scoring is the method of assigning specific points to your leads based on their interest and buying intent. The lead’s interest level can be determined by different actions like:
- Viewing your product’s pricing page
- Requesting product demos
- Engaging with your inbound marketing material
Learn all about what lead scoring is and how you can leverage its power in this detailed blog.
But you can’t have a “set it and forget it” attitude to your lead scoring system. It needs to keep pace with the trends in users’ response to your marketing efforts and product.
Fine-tune your lead scoring system based on recent customer data, identify the most important opportunities faster, and close more deals.
If you get lots of leads but very few conversions, perhaps the lead scoring threshold (the point value where a prospect is considered sales-ready) is too low.
Or, if you get more sales from a specific type of prospect (with a certain job title or from a specific industry), assign them higher points.
To update the lead scoring system and improve the lead qualification strategy, revisit these questions every quarter:
- Which pages can be called high-value (e.g. pricing page, contact sales page, etc.) and should be scored higher?
- Which job title should be scored higher than others?
- Which actions should be given negative points? (e.g. visiting careers page, giving invalid numbers, etc.)
Only an updated lead scoring system can help your team identify which leads are ready to buy (and which aren't), saving you loads of time in the process.
With all of that said, the fact remains that having an SQL is no guarantee of conversion.
Marketing qualified leads and sales qualified leads are like a compass — excellent to point you in the direction of promising leads. But you’ll still have to do the ‘pitch or ditch’ due diligence to uncover the lead’s true intentions.
So chuck the compass.
Enter the 21st century with the GPS-like accuracy of —
PQLs: The Future of Product Marketing!
Meet the coolest kids on the block — product qualified leads (PQLs). 😎
A product qualified lead is someone who’s already used your product (via free trial or a demo version) and indicated a strong desire to continue using it.
How can you tell?
By tracking their product usage data, of course!
Backed by hard product analytics data, the sales team can forecast the exact likelihood of the lead’s conversion — down to the decimal.
Product usage data reveals which features a lead found most valuable.
It also highlights:
- Which users invited other team members to the app.
- Which users are returning most frequently.
- Which demographics have the best conversion rates.
- Which users have spent significant time on the pricing page.
Over time, it can help you identify which actions are highly correlated with conversion to paid accounts. Consequently, you can use that to surface the product qualified leads who are most likely to buy your product.
The day you start aiming for more PQLs, you'll have more paid users and more upgrades as a result.
And that’s where Toplyne comes in.
Build the Ultimate PQL Pipeline with Toplyne
Toplyne is a one-of-a-kind behavioral lead scoring tool that improves your sales process by taking the guesswork out of the game.
What do we mean?
The tool’s AI identifies behavioral patterns of any lead via in-product activity. Your team gets access to the product usage data and reaches out only to the leads who are most likely to convert in your sales pipeline.
And a pipeline saturated with the best PQLs will (automatically) boost your sales conversion rate!
It gets better:
You can get the most out of your potential customers by spotting cross-selling and up-selling opportunities to improve your net revenue retention!
Here’s how companies like Canva and Vercel generate sales pipeline from their self-serve funnel using Toplyne:
- Step 1/7: Create monetization playbooks to surface conversion and expansion opportunities (leads most likely to convert to paying customers, and teams most likely to grow into larger teams)
- Step 2/7: Choose the right leads to target – users (individual users) or accounts (a group of users with an organization).
- Step 3/7: Select the frequency at which you would want leads synced in your GTM apps.
- Step 4/7: Define how many leads you want by either the number of leads or your expected win rate, depending on your sales capacity and GTM strategy.
- Step 5/7: Build custom segments - Build custom segments based on And/Or logic at the deepest level of sub-properties within your product analytics.
- Step 6/7: Validate your GTM strategy - Hold back some users as a control group to test your GTM strategy.
- Step 7/7: Sync your product qualified pipeline into your GTM destinations - CRMs, sales & marketing execution tools, and customer engagement platforms.
Stay on Top of Your Game with Toplyne
Your MQL to SQL conversion rate is a key metric that determines if you can hit your sales target and ramp up revenue.
But for B2B SaaS, you need more.
Product companies need additional qualifying criteria to sort their leads and improve sales conversion rate.
That’s where PQLs come in.
PQLs that have shown tangible interest in the core offering and have a strong reason to convert. Unfortunately, legacy CRMs are woefully inadequate in spotting these, let alone pushing them to the finish line!
Thankfully, Toplyne can help you with that and more!
Besides letting you build a smooth product-qualified pipeline, it lets you boost engagement and reach out to leads — right within your app.
Target casual users with new feature use cases and push active free trial users to the brink of conversion with in-app nudges.
So what’s holding you back?
Sign up for Toplyne for free today to gift your sales team the best leads!