Sales qualified leads (SQLs) are warm leads nurtured by your marketing team, found at the bottom of the sales funnel or the decision-making stage. SQLs have already received a sales pitch or engaged in a marketing campaign and expressed high-level interest in a product demo or a sales offer. Because of the SQL’s high likelihood for conversion, reps must fully assist SQLs in completing the sales process. Learn what sales qualified leads are and their best uses below.
Examples of Sales Qualified Leads
Sales teams manage different types of leads, including cold leads, warm leads, and hot leads. One type of warm lead is a sales qualified lead. An SQL requires a further push from the sales team, identifying buying signals by encouraging the lead to take the next steps to move further down the sales funnel.
Typical actions a prospective customer might take to be considered sales qualified leads include:
- Regularly visiting your website
- Downloading bottom-of-funnel (BOFU) content or content related to a specific action
- Frequently calling your sales representative to clarify some information
- Repeatedly asking price updates for your product or service via email or chat
- Signing up for a free trial
- Agreeing to a product demo or calling a sales rep
Let’s say you’re a software provider and have launched a newsletter blast on the best customer relationship management (CRM) software of 2024. Potential customers who open your newsletter are considered marketing qualified leads (MQLs), who are already familiar and interested in your product or service but haven’t expressed intention of buying yet. But when they become regular website visitors and repeatedly open your newsletters, you can consider them as SQLs.
Identifying Sales Qualified Leads
Sales qualified leads have the authority and budget, and have also expressed a need for your product or service. In the sales process, SQLs are in the later stages, wherein proper follow-up is essential to get their go signal to close the sale. Learn more about the SQL’s position in the sales funnel, pipeline, and sales process below.
The sales funnel visualizes the buyer’s journey through the sales process. The five sales funnel stages are as follows: creating awareness, fostering interest, pitching your offer, consideration, and decision. Sales qualified leads are already in the consideration stage, which is the next phase after pitching an offer. They’re already aware of your offerings, weighing their options, and are on the verge of making a decision—whether to accept, reject, or negotiate an offer.
SQLs want to find the best solution to their problems, so they’re past the awareness, interest, and consideration phases. A notable action of SQLs is repetition. In the process of making the final decision, they’re constantly looking for confirmation or validation through the bottom of the funnel (BOFU) content like buyer’s guides. SQLs are in constant contact with your sales reps and engaged in your website, online store, social media, and other marketing channels.
Here are the things included in the process of identifying SQLs in the sales funnel:
- Lead scoring or giving points to a defined set of actions like booking a meeting
- Assessing historical behavior like web browsing history or items on the shopping cart
- Evaluating the frequency of follow-up calls and emails, chat inquiries, and responses
- Looking for specific actions leading to a sales decision like downloading BOFU content
The sales pipeline involves internal activities like prospecting, lead qualification, lead nurturing, and product delivery, which sales teams can track using CRM software. SQLs lie in the bottom stage of the sales pipeline.
Follow-ups are the key to convert SQLs to product qualified leads (PQLs) or leads who have experienced some of your solution’s features and benefits. Every sales team has a unique selling cycle workflow but general steps like generating leads, presenting offers, and closing a sale apply to most businesses.
Most CRM software programs have premade sales pipeline stages as shown in a centralized dashboard. Sales teams can use it to monitor deals and automate outreach activities, lead scoring, and lead nurturing to generate sales qualified leads. CRM systems can also automate the lead qualification stage to ensure you don’t waste time and effort on leads that are less likely to convert.
A sales process refers to the cycle of repeatable steps to obtain potential customers and close deals. At this point, SQLs are in close encounter with salespeople, wherein sales and marketing alignment is crucial in converting SQLs to PQLs. Otherwise, misalignment due to wrong qualification criteria leads to wasted time and effort. Therefore, chasing the right prospects is integral in converting SQLs.
A crucial aspect of sales management is providing sales resources like a lead list, sales enablement, and tech tools. One of the strategies successful sales teams use to finalize SQLs is the BANT system, which is the acronym for budget, authority, need, and timeline. This method is used to rank sales opportunities based on the prospect’s budget, decision-making authority, need, and purchase timeline. Your team can utilize the BANT sales framework to determine top leads by interviewing them to understand the most important purchase decision factors better.
Because SQLs have high interest, sales reps must act with speed, accuracy, and relevancy. For instance, SQLs expect salespeople to provide more information, so you have to stay ahead of their objections, concerns, or delays. An example scenario is when they’re asking for clarification, either via phone, email, or in-person meetings. A sluggish response time often leads to a lost lead, finding a similar solution from competitors.
Thank you for downloading!
Qualifying Questions for Sales Qualified Leads
Sales reps must ask qualifying questions or questions that makes an SQL worthy to nurture or spend more time on because of a high likelihood to convert to a product qualified (PQL) lead. As much as we would love to, not all sales qualified leads move into the next stage—decision-making. Some SQLs are stuck in the nurturing stage or get lost due to misaligned priorities or budget delays. Hence, sales teams try to win them back by offering exclusive deals.
To qualify SQLs, sales reps should ask these questions to determine if they are a good fit for their offer.
1. What is your current position or role in your company?
This question can help you determine if the prospect has the authority to make a purchasing decision. Most business-to-business (B2B) companies usually have more than two decision-makers. Therefore, a lead is also a good fit for your offer if their roles or responsibilities can influence other stakeholders or decision-makers in the organization.
2. What are the problems or challenges you need help with?
Ask this question to understand the qualified sales lead’s pain points better. That way, you can personalize your sales approach and offer to resolve the lead’s problems. This question also helps sales leads discover adjacent problems, which your product or service can prevent or mitigate before they arise.
3. What made you consider our product or service?
The lead’s answer to this question determines how well they are familiar with your company—especially your products and services. The answer gives you valuable insights as to what motivated the prospect to contact you. Related questions include “How did you know about our brand?” and “Did someone refer our solution to you?”
4. Do you already have a budget allocation for this solution?
Budget constraints and an unclear budget allocation process can impede the movement of an SQL to a PQL. Asking this question can give you a clearer picture of whether the sales lead is ready to say “yes” to your offer or if there are certain financial or administrative aspects that need polishing before budget approval. If the prospect finds your starting price hard on the pocket, they may not be good SQL candidates.
5. Have you checked other providers or vendors? How do you find their offer?
Weigh your prospective customer’s expectations about your product or service by asking this question. It is a great opportunity to compare your offerings with your competitors and differentiate your offer based on the prospect’s experiences with other vendors.
6. What is your implementation timeline for this solution?
This question about the implementation timeline of acquiring a product or service that your company offers reflects how eager the lead is to close a deal. A short timeline implies the urgency to find the right solution, which sales teams can use as a perfect opportunity to win the sale.
7. What is your preferred channel of communication during the sales process?
Determining and adapting to your prospect’s preferred communication channel is essential in enhancing customer experience. This helps increase the likelihood of converting the sales lead into a paying customer.
SQLs vs Other Types of Leads
It’s important to understand that being sales qualified is just one stage in the qualification and sales process. Depending on how qualified sales leads are generated and their level of interest, prospects will have different classifications of being “qualified.” The chart below shows the key differences among the common types of leads:
Unqualified Lead | Marketing Qualified Lead | Sales Qualified Lead | Product (Service) Qualified Lead | |
|---|---|---|---|---|
Definition | A contact who is a good fit for your business but has not connected with you or expressed interest yet | A lead who has expressed a degree of interest by interacting with your marketing campaigns | A lead who has expressed a high degree of interest in your offerings by interacting with a sales rep or sales campaign | A lead who has used a product or service through a free trial or free consultation and has expressed interest in being a paying customer |
How They Are Generated | Online research, purchasing lead lists, or collecting business cards from networking events | The lead opens an email, clicks a web link, downloads a marketing asset, submits a webform, or interacts with social media content | The lead requests pricing, signs up for a free trial, agrees to a product demo, or calls a sales rep | The lead reaches out to a sales rep after using a free trial or consultation |
Salesforce Sales Cloud lets you create personalized sales emails. (Source: Salesforce)
How to Convert Sales Qualified Leads to Product Qualified Leads
The primary goal of nurturing SQLs is to convert them into product qualified leads (PQLs) and, ultimately, into paying customers. Hence, they need proper guidance every step of the way. Here are some practical tips on how you can convert SQLs to PQLs:
- Conduct regular follow-ups: Sales reps must regularly contact prospects by phone or email, or leave a voicemail to increase the likelihood of conversion. Follow-up correspondence reminds them of great opportunities like limited-time sales offers. A good number of follow-ups is five to eight so you can book a meeting or sales demo successfully.
- Set SQL-to-PQL criteria: Sales teams must set criteria that SQLs must meet to be considered as PQLs. For example, you can consider an SQL as a PQL when there’s already a prepared and approved budget allocation for the purchase. In the same way, when you’re already interacting with an SQL with authority to make the sales decision, you can tag the lead as PQL upon point of contact.
- Obtain relevant feedback: If you want to know what an SQL thinks of your sales offer, then you must gather feedback. This will also help you determine the next sales activity to convert the SQL into a PQL. You can use prebuilt email or survey templates or create customized versions and send them to your prospects via a CRM. A quick phone call is also a great way to gather real-time, direct feedback.
Frequently Asked Questions
A lead who has expressed high-level interest in what your business offers, has the authority to make a purchasing decision, and has an already allocated budget is considered sales qualified. Qualifying involves an in-depth sales-qualified lead scoring workflow, ongoing follow-up, and continuous behavior observation to maximize the likelihood of conversion.
Qualifying sales leads is important to increase the likelihood of converting them into paying customers. For instance, sales qualified leads (SQLs) are the next closest to a sale before product qualified leads (PQLs). One of the priority sales tasks is a regular follow-up to book a sales demo successfully or get them to try the free trial.
Marketing qualified leads (MQLs) and sales qualified leads (SQLs) are types of leads that sales teams handle. MQLs express low-to-medium interest in a sales offering whereas SQLs have high-level interest. SQLs have already spoken to the sales team via a sales pitch and are ready for the next steps, like a sales demo or free trial, to complete the sales process.
Bottom Line
Sales qualified leads refer to leads that demonstrate high-level interest in your offerings and are almost ready to purchase. SQLs are a critical aspect of the sales process because they dictate the projected sales of an individual rep or team. In the sales pipeline, SQLs are sales-ready, so to close the deal successfully, sales teams should respond promptly through regular follow-up.
