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What Do PQL, XQL, MQL, and SQL Mean?

The lead qualification process has eliminated a significant amount of work for sales, operations and marketing teams. In earlier years, members of marketing and sales teams would spend countless hours attempting to convert leads that may not have necessarily fit the criteria of a qualified buyer. Then it would be up to the operations team to figure out where the leads even came from.

A verifiable and often more manageable way of qualifying leads is by leveraging segments that can be stratified based on buyer demographics such as industry, geography, demographic composition (age/income), and other metrics. By adopting these criteria, sales and marketing teams can more efficiently navigate a direct path to converting a customer who is more likely to buy.

Marketing and sales teams can break down leads further by comparing MQL, SQL, PQL, and XQL while drilling deeper into the algorithm. In this article, we’ll break down the differences between a Marketing Qualified Lead (MQL), Sales Qualified Leads (SQL), Product Qualified Leads (PQL), and Expansion Qualified Lead (XQL) and the process of tracking each type of lead and how they continue through different parts of the funnel.

What Is a PQL?

A PQL (Product Qualified Lead) is a prospect that has direct interaction with a product via a free trial or a “freemium” version of a service. However, it’s worth noting that product leads don’t receive this qualification simply for signing up for the above mentioned services during the sales process.

The ideal customer must complete actions that satisfy your lead scoring system that qualify them as a PQL by the sales team. PQLs can be especially important in marketing to B2B audiences. As with MQL to SQL process, the metrics that define a product qualified to lead change from company to company. These metrics may include several app downloads, reading and understanding pricing breakdowns, selecting an upgrade, and other actions.

As a business if you want to get into the PQL game it’s important to do your research and develop the strategy that fits you best.

Find what your sticky metrics are – these are the actions that customers take that lead to them being the most likely to “stick” with your product. As an example, Facebook found that once someone had added 10 friends that they were much more likely to stay engaged with the product and add more people. They focused a big portion of their onboarding to getting people to 10 friends.
What is your feature of all features – generally this is part of your freemium offering. It could be a number of seats or just a taste of the basic features. Once you know your stars you can rummage through your customers using the free service and find the ones who are ripe to upgrade and notify them in product or with an email about your upgraded features.
Know your customers – You probably don’t have much opportunity with a PQL that is only potential for 1 Pro license, but if you know your customers you can identify the ones that have potential to be leads at large teams or organizations, then the land and expand fun begins. You can ask questions up front with onboarding or use software to help identify your customers.

PQLs are a growing trend among B2B SaaS companies who are focused on product led growth. It’s important for any rev ops team to look for ways to incorporate the PQL playbook to get the ball rolling and start converting free trials to paying customers.

What is an XQL?

The cousin of the PQL, also devoted to land and expand opportunities with a product led growth company. An XQL, or Expansion Qualified Lead, looks for ways to expand already paying customers into even expanded features or benefits.

XQL can come in a couple of different flavors. For instance, an account that is already using your product may be ready to use more of it. This is an opportunity for your sales team to upsell that account on the same product. For example, if you see that a large organization is regularly hitting 80-90% of their licensed capacity of your product, it may be an opportunity to create an XQL for your sales org.

Another flavor of an XQL is when a customer’s usage behavior indicates that they are ready to buy an adjacent product from you. For example, if a customer is regularly exporting data from your product to another product, it may be an opportunity to cross-sell a connector to automate the integration between the two products.

Often, upsell and cross-sell opportunities arise when a customer is required to purchase features that a lot of enterprise software businesses use – for example like ‘SOC 2 compliance’ or ‘role based access control’ for enterprise level security.

XQL and PQLs work hand in hand to create leads from your existing customer base who already love and use one of the tiers of your product.

What Is An MQL?

An MQL (Marketing Qualified Lead) describes potential buyers familiar with a brand’s marketing content that have considered making a purchase. Leads are considered marketing qualified when they include one or more of the following characteristics:

PR (Paid media) – The ability to identify that a person has access, either through friends and family recommendations or paid search advertising.
ISV (Integrated Source Verification) – The type of lead that came from an integrated source such as email marketing campaign sign-up module usage on partner site, consumer interaction with ads online during purchase decision stages.

Other factors include product familiarity in an extension of brand perception. Incorporating these factors is a process known as lead scoring. Programs use lead intelligence algorithms to assist marketing and sales in designating MQLs and SQLs.

Traditionally, marketing qualified leads define “good potential” for your marketing team. They are not concerned with how much the customer spends on the product; instead, they seek to understand how well-known their total and individual products are for any purchase decision cycle.

What Is An SQL In Marketing?

A SQL (Sales Qualified Lead) is a prospect who has experienced a brand’s marketing message through various channels and is ready to receive a pitch from your sales team to be converted into a buyer. They’ve seen, heard, and thought about the brand and most likely understand how a particular product or service is beneficial to them.

They have an existing relationship with the company and have moved from the MQL designation through a specific lead score based on several attributes. After participating in a product demo, one company may qualify a prospect as a sales qualified lead. Other companies may require a prospect to participate in webinars or other video content for the sales team.

Again, proper usage of a lead scoring system will designate whether they’re ready for the next step of the sales process. Regardless of the qualifications, once these actions are complete, the marketing team will tag them as sales-ready and pass them to the sales team.

The metrics above may change as the product progresses into different phases. These changes in metrics aren’t as typical when it comes to MQL vs. SQL. The following section outlines additional differences between PQL, MQL, SQL, and XQL

PQL vs. XQL vs. MQL vs. SQL: Key Differences

Each type of lead possesses specific characteristics and actions that separate one from the others. There’s also a particular journey each potential customer takes, sending them from the tag of MQL vs. SQL. For example, a client wouldn’t receive the designation of a PQL or XQL for simplicity sake before completing the actions involved with an MQL and SQL.

Here are some of the key characteristics of the different lead types as they apply (or don’t apply) to each:

	PQL	XQL	MQL	SQL
Interaction with marketing	No	No	Yes	Yes
Interaction with product	Yes	Yes	No	No
Existing customer base	Yes	Yes	No	No
Considering additional product after a previous purchase	No	Yes	No	No

What Comes First, MQL or SQL?

There’s a difference between the two types of marketing. In recent instances, many clients in industries like B2B lead generation have implemented MQL and SQL marketing (along with other elements). However, this distinction is essential for marketers who are not focused exclusively on either one.

With a gap between these two methods of researching prospects and generating leads, marketers need to understand when each should come into play and how best to implement each strategy. Typically, MQL almost always comes before SQL.

When Should an MQL Become an SQL?

A potential client receives the MQL tag once they’ve consumed a specific segment of content that triggers their consideration of any particular product or service. For example, once a client downloads an organization’s brochure, white paper, or eBook, they’re generally tagged with the SQL designation.

Other actions include form submission for a mailing list or newsletter and even liking or retweeting a company’s social media content. This is why an organization needs to optimize its content strategy, ensuring brand uniformity.

What are some different strategies to increase conversions from MQLs, SQLs, and PQLs?

Increasing Conversions from MQLs, SQLs, and PQLs

First, the definition of each type of lead must be clear from one department to another. Once synergy is achieved between the sales, product, ops, and marketing departments and the lead scoring process becomes more efficient, departments can work together to drive growth.

Internal communication is the first step in optimizing the conversion process. The value of your product must be demonstrated during the lifecycle of the buying process.

Your operations team should set up a clear way to track PQLs and other leads to make sure you have an understanding of where they are coming from and how they end up. This will help you to create better conversion paths.

The Marketing Team

The marketing team’s job is to ensure new customers are constantly encouraged to submit contact information using automation on your website. The right marketing strategy must deploy seamlessly across all channels. Repurposing and recycling content can be a great way to get maximum value from your content team’s hard work.

The Sales Team

On the other side, the sales team should constantly communicate with the marketing team regarding what content is working best to convert from MQL to SQL. The sales team must obtain pertinent information from the marketing department regarding a prospect’s needs and wants to demonstrate the value of a product or service correctly.

The Product Team

From this point, it becomes the job of the product team to work with the right software companies to deploy the freemium model most efficiently. It becomes critical that organizations use a good data source to include processes that solve potential clients’ problems when they adopt demo software.

When moving a prospect to a product-qualified lead, it’s also essential to decide whether credit card information is required for free trials. More companies are adopting the strategy of not requiring payment information at the bottom of the sales funnel for ease of use. If prospects can step right into using a free trial without entering credit card information, it often becomes easier to convert them to paying customers.

The Customer Experience Team

Once a lead has moved from a PQL to an XQL, the customer experience team is responsible for retaining the customer as well as guiding them into their additional purchase. The customer experience team must consider the XQL’s needs—whether they need an additional product that you offer or more of a particular product, etc.—and market your services to that lead.

An XQL already has a history of providing business to your company, so the customer service team simply needs to maintain that relationship while demonstrating what you have to offer. A balance of marketing with follow-up and integrity will likely foster a healthy relationship and encourage the XQL to further engage with your business.

Increase Conversion Count

Use the following tips to manifest the most efficient lead qualification process and sales strategy between departments:

Communicate between your marketing and sales departments regarding the needs and wants of potential clients.
Identify what content works best (social media marketing, blogs, infographics, etc.) when moving a client from one tag to the next. For example, a sales rep must be notified of pain points when your marketers pass leads based on MQL and SQL definitions.
Decide on meaningful customer data that qualify a prospect to receive the MQL, SQL, or PQL lead qualification criteria. What makes them sales qualified as opposed to other leads?
After deciding on these metrics, develop a scoring system that allows you to gauge where a prospect exists on the funnel. Understanding lead behavior will help discern between MQLs and SQLs.
Sales reps should be acutely familiar with the buying cycle to understand when to take actions like suggesting a sales call.
Develop a uniform strategy that allows for a seamless transfer from one department to the next during the buyer’s journey. The handoff process is one of the most critical factors for a prospective customer.
Develop buyer personas by using data from the sales cycle that allow you to prospect for quality leads in the right places from the beginning. This will enable you to identify MQLs and SQLs faster and optimize your best-performing channels.

Strategic Approaches by Lead Type Lead to More Sales

Understanding lead type allows you to optimize your business’ relationship with its customers. When you understand a customer’s journey and their current needs, your teams can appropriately communicate with them and market your services.

In summary:

PQLs have had a free interaction with your product.
XQLs have had a paid interaction with your product and are ready to consider further engagement with your services.
MQLs have interacted with your marketing and are considering making a purchase.
SQLs have interacted with your marketing, understand your product, and are ready to receive a sales pitch.

Your sales and marketing alignment is critical for more productive lead generation and mapping the buyer’s journey. With constant internal dialogue, teams can work interdepartmental strategies out among one another to automate and enrich your organization’s lead qualification process.

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