MSM FULL-FUNNEL CONVERSION GLOSSARY
What is a Qualified Lead?
A qualified lead is someone who has the problem you solve, the budget to fix it, the authority to decide, and a reason to act now rather than later.
THE SHORT ANSWER
The Definition
A qualified lead is someone who has the problem you solve, the budget to fix it, the authority to decide, and a reason to act now rather than later.
Why It Matters Commercially
Sales time is your most expensive resource. Every hour spent on someone who was never going to buy is an hour not spent on someone who would. Getting the definition right also tells marketing what to aim at, so you stop generating volume that looks good in a report and does nothing for revenue.
How It's Measured
Lead to qualified lead rate = (Qualified leads ÷ Total leads) × 100. If it's below 20%, either your marketing is attracting the wrong people or your criteria are too tight.
Who Owns It
Shared, and it has to be agreed jointly. Marketing owns generating them. Sales owns working them. The definition itself needs signing off by both, in writing, or you'll keep having the same argument about lead quality every month.
HOW IT WORKS
A qualified lead is somebody your sales team should spend time on. That's the whole definition. Everything else is working out what should be true before you say yes.
Most B2B businesses qualify on four things:
- Need. Do they have the problem you solve, badly enough to act?
- Budget. Can they afford the solution, and is money already allocated?
- Authority. Are you talking to someone who can decide, or someone who can only recommend?
- Timing. Are they buying this quarter or thinking about next year?
The trouble starts when marketing and sales use different answers. Marketing counts anyone who downloads something. Sales counts anyone who takes a call. Both report a number and neither number means the same thing.
MQL versus SQL
This is where most of the argument between departments lives, so it's worth being precise.
A marketing qualified lead has shown enough interest to be worth a conversation. They've downloaded something substantial, booked a demo, returned to your pricing page three times. Marketing owns the criteria and marketing owns the number.
A sales qualified lead has been spoken to and confirmed as worth pursuing. Someone has checked the need, the budget, the authority and the timing, and decided this is a real opportunity. Sales owns that judgement.
The gap between the two is the handover, and it's where leads go cold. A lead can be perfectly marketing qualified and completely sales unqualified, and that isn't a failure by either team. It's the system working. The failure is when nobody has agreed what should be true before a lead moves from one column to the other, so every handover becomes a negotiation.
Fix it by writing the criteria down and agreeing them in a room together. Our sales management work starts here more often than anywhere else.
Qualified lead versus a good fit
A prospect can be an ideal customer and still not be a qualified lead, because qualification includes timing. Someone who has the problem, the budget and the authority but isn't buying for nine months belongs in nurture, not in your pipeline. Putting them in the pipeline is how forecasts become fiction.
If lead volume is the problem rather than lead quality, we've written about increasing B2B lead generation without increasing ad spend and getting leads through your website.
WHAT THIS LOOKS LIKE IN PRACTICE
A software business generates 120 leads a month and sales complain constantly about quality. When we looked, marketing counted every ebook download as a lead. Sales only counted people who'd booked a demo.
Same pipeline, two different numbers, and a running argument between departments. They agreed a definition, split it into marketing qualified and sales qualified, and set what had to be true to move between them. Lead volume dropped by half. Conversion to proposal more than doubled, because sales stopped spending their week on people who were never going to buy.
IS THIS COSTING YOU REVENUE RIGHT NOW?
Ask around your business:
- If you asked marketing and sales to define a qualified lead separately, would the answers match?
- Does sales regularly complain about lead quality?
- Is qualification written down, or does each salesperson do it their own way?
- Do you know your conversion rate from lead to qualified lead?
- Does anything happen to leads that don't qualify, or do they just disappear?
- Can marketing see which leads turned into revenue?
Two or more problems here and you're either wasting sales time or throwing away leads that would have bought.
SEE WHAT YOUR COMPETITORS ARE DOING THAT YOU AREN'T
We'll analyse two of your competitors against your own site and show you where they're winning conversions you should be getting.
WHAT WE SEE IN THE FIELD
When sales say the leads are rubbish and marketing say sales aren't working them, both are usually right, because they're describing different things. Marketing is measuring volume against a loose definition. Sales is measuring effort against a tight one.
The fix is unglamorous. Get both in a room, write down what qualified means, agree it, and hold each other to it. It takes an afternoon and it settles an argument most businesses have been having for years.
Reviewed by Ian Wilson, MSM.
Frequently Asked
What is the difference between a lead and a qualified lead?
A lead is anyone who has given you their details. A qualified lead is someone your sales team should spend time on, because they have the problem you solve, the budget to fix it, the authority to decide and a reason to act now. Most businesses count the first and report it as though it were the second.
What is the difference between an MQL and an SQL?
A marketing qualified lead has shown enough interest to be worth a conversation, such as booking a demo or returning to your pricing page. A sales qualified lead has been spoken to and confirmed as worth pursuing. Marketing owns the first judgement, sales owns the second, and the handover between them is where most leads go cold.
How do you qualify a lead?
Establish four things: whether they have the problem badly enough to act, whether the budget exists, whether you're speaking to someone who can decide, and whether they're buying this quarter or thinking about next year. Write the criteria down and get marketing and sales to agree them, or you'll keep reporting different numbers from the same pipeline.
Why does sales say the leads are poor quality?
Usually because marketing and sales are using different definitions. Marketing counts anyone who downloads something. Sales counts anyone worth a meeting. Both are reporting honestly against their own criteria, and the argument continues until somebody writes down what qualified means and both sides sign it off.
What should happen to leads that don't qualify?
They go into nurture, not the bin. Someone with the problem and the budget but no timing isn't a bad lead, they're an early one. Putting them in your pipeline makes your forecast fiction. Dropping them entirely wastes the money you spent generating them.
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