The MQL is dead, long live the PQL!

The interface between Marketing and Sales in the B2B SaaS space is one of the fascinating battlefields in each company. It considered a Battlefield because each team presents the other side of the same coin. Marketing is fighting to bring more leads, while Sales is struggling to close more deals. It considered fascinating because they do eat from the same plate and do need to work with each other, and if they manage to build a synergistic relationship, then the 1+1=200. But how to do that magic to happen?

Usually, the main pain point is identifying by both Sales and Marketing what is the ideal lead, i.e., the ultimate prospects that Marketing should bring to the beginning of the sales funnel. To do so, you need to set the qualifications criteria of these leads, i.e., Marketing Qualification Lead (MQL), before passing the prospect to the Salespeople. You do have plenty of excellent lead scoring tools such as Infer, Velocify, VanillaSoft, Leadspace, 6sense, DataFox, EverString, Lattice Engines, Maroon, among many others.

This MQL definition usually based on demographic criteria, such as company size, location, role, and budget. Here, you also have many tools such as DiscoverOrg, ZoomInfo, ClearBit, FullConect, Leadfeeder, People Data Labs, RocketReach, and more. They all would tell you great things about your prospects, essential things you should know as well as things you're not necessarily need. If a lead comes from the right size/location/role, the sales organization (SDR, Inside Sales Reps, Pre-Sales Engineers, Enterprise Sales Executives) will look at it differently than if the prospects do not meet the criteria, or partially meet the criteria. Once you well defined what the right MQL is, you can now manage it much more efficiently, and build a good relationship between Marketing and Sales, as you can easily measure the numbers. How many MQL Marketing managed to bring vs. how many deals Sales managed to close following that MQLs. Easy, right?

The more advanced companies add another qualification layer, and it is the Communication or Engagement layer. For example, did the prospect communicate with us? Did the lead request a demo? Did the lead show up the demo? There are very advanced sales engagement tools such as Outreach.io, Yesware, SalesLoft, Freshsales, Reply.io, and more. You can find now great technologies that are using Artificial Intelligence (AI), companies like Chorus.ai, Gong.io, and Refract.ai to analyze what happened in each communication, web conferencing, call, chat, or email, result in better understanding of the business potential with each prospect and how qualified the prospect is to help the sales team to close more deals.

So, what is the problem? The problem is that it simply does not work.

It does not work mainly for B2B SaaS companies because there is very little correlation between the MQL definition and the deal closing, which means if the lead converted to a paying customer. When I am talking about MQL concept that does not work, In many cases, it doesn't really matter what company size is, who you are, and where you come from, it is also less important what you said and what you did not say in the meeting, or via email. These parameters have value, they are important, but it is just a small piece of the sales puzzle. Furthermore, you can be an ideal prospect, meeting all marketing demographic parameters (you are in the right size, the right location, and proper role), and it could be that you have a fantastic demo, and there was much sincere enthusiasm all over the place. Green! Green! The systems shout it is for sure an Enterprise deal opportunity. But it is Red. The prospect did not buy or made a purchase but a tiny package. 

Why does it happen? Why it is not working and what truly matters?

It does not work because these companies may use excellent tools, but they are tackling it with an old paradigm that was more relevant in the pre-SaaS period. In the past (it was not too many years ago), when these software companies sold their software products, you had to come physically to your customer on-premise, install your product, set up everything ensuring it is working on their hardware (remember the days when you had to wait for the IT guy until the hardware was ready for you?! Guess what, it was never ready). Then, training the staff, and start the full implementation onsite. That took not weeks, but many months, if not years. Hence, in the old days you had to base your business cycle on two main factors:

• Relationship - The cycle involved a lot of in-person meetings, and generally speaking, it is a very long process. The product was not the primary trigger to move forward, but the personal relationships you built with the prospect, and also the historical relationship you may have with the decision-makers.
• Demographics - Since it is a long and complicated process that costs the vendor a lot of money, the seller will aim for the large size companies and the ones that close to your location. Who you are, played a significant role in measuring the potential of the deal.

And then, boom. Once you moved to SaaS, this old world mostly disappeared. Now, you can sell anyone, anywhere, at any time, almost with no barriers to starting using your SaaS product. You don't need many people on your end to run the sales cycle operations, and also the prospect can easily access your platform remotely and start using it right away. Prospects don't need too many approvals to test your SaaS product. One of the great things about SaaS is that you don't need a long cycle to start using the product and see how it works.

And this is what matters, the SaaS product itself, rather than all demographics and communication parameters. You can have an excellent Marketing team that brings you endless demographics & communication-based MQLs, and you can have great smart Salespeople that will try to convert these prospects to large deals. However, if the prospect does not use the product and see the real values, they won't buy it. If these fantastic Marketing and Salespeople manage to close with these prospects, they are likely to churn, and that's even more painful than not closing the deal in the first place. It might kill your business.

So what to do?

If you are a B2B SaaS company, you must ensure you build a product that can be as much as self-service as possible. Make lower barriers to starting using your solution, and gaining fast success, as early as possible. Keep tracking the demographic and communication MQL criteria; well, the old MQL concept is not fully dead… But be aware of the new kid in the block, the Product Qualified Lead (PQL) i.e., the new Prince, if not the King itself, and he is here to stay for many years. The PQL is measuring how the leads, actually better to be called "users" that are using your SaaS products, how often and for how long, do the usage increase over time, do more people from the same company start using the product, what they like in the product and what functions they are not using. You need to ensure you manage to track and analyze the users' usage activity. At the end of the day, it will tell you not only the nature of the possible deal and chances to close deals with these prospects, but it will make the transactions much more healthy with a great room for expansion. This Land and Expand process has been explained in my other article, How To Build The Optimal SaaS 'Land and Expand' Sales Machine.

Once both Marketing and Sales understand the rise of the product-centric business approach, a product-led sales cycle, I believe both parties, Marketing and Sales, can be much more efficient and contribute to each other. Marketing should bring more prospects that will sign up for the SaaS product and will use the product. Sales need to understand the user's usage patterns to address their needs better and close the right deals with them.

Happy Sales!