MQL-to-SQL Ratio | KPI Deep Dive
In the realm of marketing, there’s a metric known as the MQL-to-SQL Ratio, and today, we’re going to break it down into simple terms.
What is MQL-to-SQL Ratio?
The MQL-to-SQL Ratio, or Marketing Qualified Leads to Sales Qualified Leads Ratio, is a measure that tells us how many of the potential customers we’ve identified as marketing qualified actually turn into leads that the sales team thinks are ready to buy.
Where Is It Used?
This ratio is mainly used by marketing and sales teams. It’s a way for these two groups to communicate and agree on which leads are worth pursuing.
Why is MQL-to-SQL Ratio Important?
It’s important because it helps us understand how well marketing and sales are working together. If the ratio is too low, it means marketing might be sending leads to sales that aren’t quite ready, wasting their time. If it’s too high, it could mean marketing isn’t sending enough leads to sales, and they might not have enough potential customers to work with.
How Does It Relate to Other KPIs?
The MQL-to-SQL Ratio is closely connected to other KPIs, like the Lead-to-MQL Ratio and the overall Conversion Rate.
- Lead-to-MQL Ratio: This KPI tells us how many of the leads we generate become marketing qualified. If this ratio is low, it can lead to a low MQL-to-SQL Ratio because not enough leads are becoming qualified.
- Conversion Rate: The MQL-to-SQL Ratio is also part of the bigger picture of conversion. It’s a step in the process – from a lead becoming MQL to then becoming SQL.
What Metrics Do You Need to Calculate MQL-to-SQL Ratio?
To calculate the MQL-to-SQL Ratio, you’ll need two numbers:
- The number of Marketing Qualified Leads (MQLs).
- The number of Sales Qualified Leads (SQLs).
How is MQL-to-SQL Ratio Calculated?
The formula is pretty straightforward:
MQL-to-SQL Ratio = (Number of SQLs / Number of MQLs) * 100
This formula gives you a percentage, which tells you how many of the marketing qualified leads actually made it to the stage where the sales team considers them ready for a sales conversation.
Let’s Break This Down With An Example:
Let’s say your marketing team generated 500 Marketing Qualified Leads (MQLs) in a month. Out of those, the sales team determined that 100 of them were truly Sales Qualified Leads (SQLs).
Now, plug those numbers into the formula:
MQL-to-SQL Ratio = (100 SQLs / 500 MQLs) * 100 = 20%
So, your MQL-to-SQL Ratio is 20%. This means that out of all the leads your marketing team sent to the sales team, 20% of them were ready for a sales conversation.
In summary, the MQL-to-SQL Ratio is a crucial metric that helps marketing and sales teams work together efficiently. It shows how many potential customers identified by marketing actually move on to become leads that the sales team considers ready for conversion. By keeping an eye on this ratio and adjusting marketing strategies accordingly, companies can streamline their lead generation process and improve overall sales effectiveness.