Klipfolio's Jon Taylor: Is the MQL right for my business?
Published 2022-04-01, updated 2022-04-01
Summary - MQL: a punchy acronym that almost any marketer can define in 10 seconds or less. It may feel like 3 letters put together, but it carries a lot of weight for marketing and sales teams because ultimately, MQL = revenue.
MQL: a punchy acronym that almost any marketer can define in 10 seconds or less. It may feel like 3 letters put together, but it carries a lot of weight for marketing and sales teams because ultimately, MQL = revenue.
Jon Taylor is Klipfolio’s director of marketing and “does things on the internet for a living.” I work alongside Jon every day and the internet is a pretty big part of our roles here at Klipfolio. The internet has equipped Jon with a breadth of expertise in technical marketing, SEO and marketing operations. All this to say, he’s the perfect guest to talk about MQLs on the Metric Stack podcast.
In this episode of the Metric Stack podcast, Allan and Lauren sat down with Jon to chat about marketing qualified leads: Is the MQL dead? How do you define MQL? What are the nuances with MQLs?
If you’re short on time, here are a few key takeaways:
- Marketing’s purpose is to drive revenue, and depending on your business, your strategy and tactics to drive revenue will differ but marketing needs a metric like MQLs to predict revenue and generate leads
- Don’t focus on how you’re defining MQL, focus on how you’re going to gauge lead quality in a way that makes sense for your business
- The MQL is a signal, so even in a product-led organization, you need some kind of signal to kick-off an onboarding flow, an in-app tour, or queue up a support or success call—ultimately, the succession of actions is about moving people further down the funnel
- Don’t be afraid to ask yourself: is the MQL model the right model for my business?
Listen to the full episode on Apple Podcasts, Spotify, or YouTube. If you enjoyed this episode, check out all the episodes of the Metric Stack podcast.
Allan: I'm joined by Jon Taylor and Jon says he does things on the internet for a living. Jon is actually one of our colleagues here at Klipfolio. He's the director of marketing, and does SEO and marketing operations as a consulting gig as well.
Jon's also the co-host of the Humans of MarTech podcast. And perhaps most importantly, the dad to four kids. Welcome Jon, great to have you here. And of course I'm joined by my co-host Lauren Thibodeau.
Jon: Thanks. The kids are definitely off the internet as much as possible though. That's tough these days.
Lauren: No kidding. Great to have you and be chatting with you. So we're going to talk about MQLs today or marketing qualified leads. But before we dive into those details, could you just set the stage? What context should we have in mind as we're having this conversation today?
Jon: In terms of setting the stage for marketing qualified leads, it comes back down to the most basic element of marketing. What's the purpose of marketing? It's to drive revenue. And depending on the business, the strategy and tactics of driving revenue will look a little bit different. I think we'll talk a little bit about product led versus like your traditional B2B sales approach.
However, no matter how marketing works or whatever strategy and tactics you do, you need a measurement, a metric in place to gauge lead quality, and you need a metric in place, a kind of a pre-revenue metric that marketing can go towards, have quotas, have targets, and then be able to optimize towards. So lots of people are calling it different names these days: MQL, PQL, whatever you want to call it.
Marketing at the base level needs some way to predict revenue and to be able to generate qualified leads.
Allan: Jon, why don't we actually just start for our audience? Why don't we just paint a quick picture. A lead, an anonymous user hits the website, let's start there. What are the big marketing steps and the names of each of those steps?
Jon: Absolutely. When we're talking about marketing qualified leads, we're really talking about one stage in the overall customer life cycle. In a lot of marketing operations environments, like HubSpot or Marketo, when you're talking about the life cycle, what you're really talking about is the lifecycle of a known contact.
“When we’re talking about marketing qualified leads, we’re really talking about one stage in the overall customer lifecycle. You’ll use reporting to understanding your top of funnel traffic, but at the end of the day, the MQL exists in the universe of known contacts.”
So you will use reporting to understand your sessions and your top of funnel traffic, but at the end of the day, the MQL exists in the known universe of known contacts. So what we'll see, let’s use HubSpot as an example. I like HubSpot's model. Their lifecycle model is very simple. and out of the box, they kind of define what they want you to follow. So you'd have subscriber, somebody who signs up for a newsletter, you have a lead who's done something with some sort of intent: fill out a form or respond to a marketing campaign, and a marketing qualified lead, which would be somebody who's reached a threshold that marketing deems a worthy of additional follow-up or believes has a high likelihood to close.
And you have your sales qualified lead. That's the initial step where sales takes, it takes over like one-to-one communications, your opportunity stage when we can predict revenue and then you'll have your customer and evangelists stage, which, you know, obviously paying customers and then evangelists, something like NPS. So high NPS score referrals or something like that.
Allan: Do you find that most companies are actually using this kind of a funnel as they think about the contacts that they are capturing through some sort of a lead form?
Jon: Whether they call it a marketing qualified lead or not? Yes. I find most certainly in my marketing operations consulting experience, almost everybody uses something like this.
It may not be called an MQL. But if you have a marketing automation platform or a CRM, you need some way to organize your leads. And if you don't have that, it becomes a huge pain to be able to pass people over to sales and issues can happen.
That's great, Jon, and you mentioned off the top, just in your context, some people call this different things. PQL, MQL. Can you give us some of the nuances in this metric?
Jon: If you come using HubSpot, you might be used to their default fields, in Marketo for instance, you have the revenue cycle modeler, which is basically a blank canvas, and then you could name anything you want.
You don't have to call it marketing qualified leads, you call it marketing engaged or marketing interested or something like that. So the nuance is thinking less about: How do we set up and define MQL and more thinking of that base element of how am I going to gauge lead quality in a way that makes sense for my business?
“Call it marketing engaged or marketing interested. It’s less thinking about defining “MQL” and more thinking about the element of: How am I going to gauge lead quality in a way that makes sense for my business?”
If I have something, a proxy for MQL, maybe I'm a product led organization. We only have a very small sales team. They're only focused on expansion revenue or something like that. I still need a way as a marketer to be able to determine what are the activities that are generating revenue and how can I create and find more of those people.
I think it's the concept behind being a qualified lead, which is so important to really understand when we're talking about this.
Allan: This funnel is really interesting because quality is really the name of the game here. So it's marketing quality. And then it goes to sales quality.
Do you find that there is a huge drop-off? Leads come in and obviously marketers want to get the best fit leads in the door, that's hard. So the criteria that you're setting, is it stringent? Is it not as stringent? And then of course, you've got to think downstream as well, too.
Then the next drop-off, which is to go over to sales qualified and ideally it would be a one-to-one, you get an awesome contact who turns into a marketing qualified, who turns into sales qualified, but that's probably not the way it goes.
Jon: Yeah it doesn't, but it should be, and that's what we're aiming for when we set up an MQL model.
It's interesting, you mentioned the sales handoff point, conceptually the way that at least in an organization with a strong sales. Conceptually, the way the MQL process usually works is that you generate an MQL that marketing qualifies. It signals it to sales. Sales makes an immediate kind of eyeball determination.
Do I follow up with them? Yes, no, they do follow up and move to that first sales stage. That conversion point from marketing qualified to sales qualified is super important. We call that the MQL acceptance rate. And I know we often want to talk about benchmarks, but the MQL definition will vary so much between organization to organization.
However, you definitely want to benchmark it. And understand, what is my level? And I would say, if you don't know what your benchmark should be for this based on your process, aim for 80%, right. 80 and keep pushing that up higher and higher and that acceptance rate really tells you to sales to work with these folks are not, which helps provide that feedback mechanism into the MQL model itself. The other component of this is just defining MQL is: how do we define an MQL? And that is really interesting to me.
Allan: Jon, I'm going to play devil's advocate on that a bit. And you knew I was going to right?
Jon: Looking forward to it Allan.
Allan: You said that every flow is going to be different from company to company and you threw that benchmark out there, but I actually think that benchmark might be completely irrelevant for certain companies. Like what happens if you've qualified a hundred leads, a hundred contacts as marketing qualified and you happen to have then a split and you can say, well, we will treat certain ones as self-serve and certain ones, as you know, sales, handheld, how does that get into the thinking?
Jon: That's exactly a great segue into like product led marketing, right? So many organizations now almost lean exclusively in the early stages of the buying process for that product engagement.
In that case, if you're using a hybrid model, which that's what we're using here at Klipfolio, but a combination of product led engagement and sales signals that we can use on the MQL itself to push it over. You have a different game. I think that's something that's really interesting because if you're looking at MQL you need a signal, a process that says do this next in a product led organization.
You might be just kicking off a series of onboarding flows. You may be kicking off in-app tours. Not actually ever go over to a salesperson or you may queue up a support call or a success calls. What really matters here is that your succession of actions leads to moving people further down the funnel.
I think that's a really important point. Right? The bucket of MQL might then say a certain flow will go down sort of a self-serve automated path and a different flow based on different criteria. It might then become sales qualified. So I think benchmarking internally is probably the right advice here.
“What really matters here is that your succession of actions leads to moving people further down the funnel. Benchmarking internally is the right advice. ”
Make sure that you're always increasing the quality of that handoff, but you can definitely have more than one step in that funnel.
Lauren: What have you seen? Jon, you've seen a number of different companies in your consulting work. What are some of the pitfalls, where do people fall down on this metric? And what can they do to really be successful?
Jon: The first and most common problem is not having anything in place for this piece of process. It just becomes signup on a form in the product. And then the automation system fills up with leads, sales doesn't know. Marketing can't really be held accountable to what they're driving.
And so it's missing all together. The next issue is that we swing completely the other way. We get extremely academic and existential: What is an MQL? And it becomes almost counterproductive because we're obsessing about getting the best fit. Anybody who gets rejected from the system, we have to pour over it.
The MQL is a very fluid thing. If you had an MQL list in your automation system, it should be constantly seeing new names, but it should be about the same size. Some days it goes down as sales take more people, some days it's up because sales are on vacation. So I think people overcomplicate this too much or completely ignore having this tracking in their place.
“We get academic and existential: What is an MQL? It becomes counterproductive because we’re obsessing about getting the best fit. The MQL is a very fluid thing.”
And when I was in operations consulting, that was one of the biggest programs that we did pre-standard work that we would go in, help people either fine tune their model or implement a model with their team and have a strong process.
Lauren: That's great. I want to pick up on that for one second. Is there anyone who shouldn't track this metric?
Jon: That's a great question. So there will be a whole class of people in the SaaS industry who will find this extremely irrelevant. The idea of having an MQL in place, I think a lot of the strength of the MQL model comes from the handoff point to sales. So if you're looking internally, you don't have a sales team who's converting new customers, and are maybe focused only on expansion, this may not be the best model for you. However you do need, in my opinion, some kind of proxy metric in place that is an intermediary or between, you know, a new lead and a highly likely new customer.
So something there that marketing can make. You can do without it, but you do need to have some kind of quality measure in place.
Allan: What do you typically use as that quality measure? Is it very specific to the company, are there certain things that always should be part of an MQL quality threshold?
Jon: That's a really good question. So an MQL model itself could be, at its most basic, just take a look at the definition marketing qualified lead, I've worked with bootstrap, small startups that are actually like marketing, just hand bombs over one or two contacts to sales every day.
And that's the quality measure, did it pass the marketing sniff test. Not very scalable, but actually pretty effective and usually has a high conversion rate. The other measures of quality then becomes like when we're using an automation system, like HubSpot Marquetto part OD, whatever, we then have additional data that we can put into our input.
So in terms of developing your marketing qualified definition, that's where I would route the answer to the question here. You need to understand the best fit profile of your customer: what are the job titles, what are the roles, what are the countries, what's the revenue or industry that may be part of it.
And also typically accounting for some of the engagement that happens there. And that's where you'll often hear lead scoring models are completely tied in with the MQL model, because it's a really clean way to do things, right? You have people who come in, they match these attributes, you assign a score based on each of these attributes.
They do these things, assign a score for that. And once they hit a certain score threshold, boom, we move them over to sales and call it a quality measure. It's a nice system for a lot of folks and automation systems, like HubSpot and Marketo make it super easy to set these up.
So yeah, it was kind of a more of a universal approach to qualify.
Allan: So you're saying just to make it real, you're saying that we're going to watch this contact, they've now looked at the pricing page three times, so they get a check mark for that, they've downloaded a certain white paper, maybe they're from a certain geo that we know is a best fit geo.
Maybe their company name triggers that this is a company that we want to do business with. So a combination of firmographic, demographic and behavioral things, right. That makes this into a marketing qualified. I think you're right, it's going to be different for every company.
Jon: Yeah, and that mix is completely different. If you're product-led you would say, I don't do MQL if I do PQL, you just veer everything towards the engagements. And I think what I see happen most often as a combination, a nice mix of the two things, your attributes to verify if they fit that profile.
And then the engagement, both, if you're in software and with your product and your marketing activities to determine, “is this person actually interested in what we're going to do?”
Lauren: Can you think or share with us an example of something that you've seen a company, change, pivot on.
Based on either some MQL data or their MQL acceptance rate. What are some things, some tactical actions that companies can take if they notice there's an issue or something's dropping.
Jon: Yeah. So definitely there's some metrics that you want it to keep a track of. You'd mentioned the MQL acceptance rate.
I would also look at your MQL to opportunity rate.You want a high acceptance rate for sales to work those contacts, but you also need to keep paying attention to further down the funnel. I know in my operations role, we would often go into places that didn't have any of this tracking.
And we started uncovering insights. So the first thing that you want to do with these types of insights, assuming you have the data behind the scenes, is cohort analysis. Who makes it to the opportunity stage when I send them from an MQL? And then sometimes we'd be able to pick out common threads or common programs like your demo requests, which seems obvious to us, but your demo request program has a high probability of having an opportunity associated with it.
The MQL is a metric, but it's as much a process as well. And I think that's when. I dunno, no sound tacky, but you embrace the process of an MQL, but when you really have a good handoff point between sales and marketing, like sales and marketing are the different sides of the same coin and really need to work together.
“The MQL is a metric, but it’s as much a process as well.”
What I've seen work the best is when sales and marketing agree on a definition and act on that definition.
Allan: But it seems like this is a law. As with any metric, this is a learning metric that you're monitoring. You're looking at it. You're segmenting. And you're feeding that back into your definition of the best fit customer.
I suspect you're using this then to tweak the website, the flow of the website, the positioning and messaging of your product and your benefits. Like I imagine this is just a cyclical story that should get better and better all the time.
Jon: Exactly. And we talked about hang ups with this.
The biggest hangup is not having something in place now. This is a process, it's a metric, but it's also like a focal point of optimization efforts. My lead to MQL rate is garbage. I need to understand what programs I have out in the market that are converting from a demand generation perspective.
I need to know how my ad campaign is not turning into an MQL. Super useful to have this as a target. I know in other instances like the sales team will say, give me X number every month. And as a marketer, I actually really liked that because it gives us a clear objective that we can go towards between the two.
Lauren: In the context of a really high growth company, marketers have their hands full. They're really busy. They're wearing many hats. Do you have any comments? And it might be in a couple of different types of business, any comment on how often marketers should be looking at this metric and looking to adopt change, tweak.
Jon: Yeah, in terms of timeframe, there's a couple stages. So the first stage is when you deploy this metric, I would be looking, I know when I've done it in my past, I look at the lead list every day, even just passing through it to make sure it's a good list. Good profiles are coming through.
But beyond that, once you get that initial setup, I'd say you're looking at it weekly. If you're able to, watch it on a dashboard, alongside other metrics, look at your targets and make sure that you're within your normal levels, But more importantly, I find the companies that do MQL models very well will often have either a monthly or biweekly sync with the sales team, like talking with the sales lead or somebody else on the team, making sure the MQL is a process working.
Are you guys following up fast enough? And MQLs that come in through a demo request sit there in some queue for 72 hours. It's as good as useless. So there's a lot behind the process that's used to monitor this metric and to reinforce it.
Allan: Jon, you mentioned a few other metrics that you liked keeping an eye on.
And I mean, one of them that you mentioned just a second ago was the MQL to win rate or MQL to opportunity. Are there other metrics that you should be paying attention to, or that can sort of give us early signs of something broken or validate something?
Jon: Yeah. Your lead to MQL rate is a really strong metric to see. Are you able to progressingly move people through your database for instance, through the customer profile and then the MQL to SQL?
That's great for your acceptance rate to sales, like what they're seeing and if you have the opportunity. Is sales actually converting these people and moving, advancing them through the funnel. Those are the big ones and a few other customer. Of course you are going to measure that as well. But depending on your sales cycle might be a longer term.
So the MQL acceptance rate is really nice because usually you're talking less than 24 hours to be able to get an indicator of what's happening.
Lauren: Fantastic. And a really wide ranging conversation, Jon. Love your insights. As we're about to wrap up, do you have any kind of final words of advice for folks?
Jon: Well, we tease this out throughout the interview, but the idea: Is the MQL model, right? For me it is an important question. You can go on the internet now, as you will, with any marketing term, find that the MQL is actually dead, according to some marketers, but we maybe we're reviving it. But it's nevertheless a super important process to think about if PQL is product qualified leads or some other version of product led marketing. Everything we've talked about is still relevant. You're still going to have these inflection points where you're going to move a contact from one stage to the next, where are you going to change the messaging from one stage to the next?
So I would make sure to study the MQL model, particularly if you're newer to marketing or demand generation to understand how to use future models.
Allan: The MQL is dead, long live the MQL. Jon, thank you so much for joining us. Jon Taylor is director of marketing at Klipfolio. Thanks for all your wisdom today.
Jon: Thanks for having me on.
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