Glossary:

Lead Management & Qualification

Master the essential revenue and financial metrics that drive B2B SaaS success. From ARR and MRR to retention metrics and customer economics, these terms are critical for understanding pipeline health, forecasting growth, and making data-driven decisions.

Sales Qualified Lead (SQL)

Short Definition

A lead who has progressed through initial marketing qualification and confirmed sales readiness through live discovery conversations.

Definition

A Sales Qualified Lead (SQL) represents a prospect who has been vetted by both marketing (MQL status via lead scoring) and sales (live discovery confirming buyer intent). SQLs exhibit clear purchase intent, have identified budget, decision-making authority or influence, and a defined timeline. SQL status makes leads worthy of full sales cycle investment through proposal, negotiation, and close.

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SQLs mark the critical transition from marketing handoff to sales pipeline, where subjective sales judgment validates automated marketing signals. The SQL handoff completes the lead-to-opportunity conversion, with AEs taking ownership of progression through forecast categories.

Why SQLs Matter

SQLs represent validated pipeline demand that drives revenue forecasts and sales capacity planning:

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  • Pipeline Quality: Only 40-60% of MQLs become SQLs, filtering out non-buyers before sales investment.
  • Forecast Confidence: SQL volume and quality provide the most reliable short-term revenue signal.
  • Sales Productivity: SDRs convert MQLs to SQLs so AEs focus on closing vs. qualification.
  • GTM Alignment: SQL conversion rate holds marketing accountable for lead quality.
  • Capacity Planning: SQL volume determines AE hiring needs and territory design.

How to Qualify SQLs

  1. Receive MQL: SDR receives routed MQL within SLA (<5 min high-intent).
  2. Conduct Discovery: 15-30min call confirming Metrics, Economic Buyer, Decision Criteria, Decision Process, Paper Process, Identify Pain, Champion, Competition.
  3. Validate Criteria:
    • Budget identified or confirmed
    • Authority (decision-maker or strong champion)
    • Timeline (target close date)
    • Fit (technical, strategic alignment)
  4. Create Opportunity: SQL converts to pipeline stage 1 if all criteria met.
  5. Document Handoff: SDR passes intel (pain, timeline, champion) to AE.

Example MEDDPICC Qualification

Criterion Confirmed Signal SQL Status
Metrics "Save $200K/year" ✓
Economic Buyer CFO engaged ✓
Decision Criteria ROI >3x ✓
Decision Process 3-signer approval ✓
Paper Process PO by EOM ✓
Identify Pain Churn costing 15% ARR ✓
Champion VP Sales advocating ✓
Competition "Salesforce too expensive" ✓
Result All criteria met SQL

SQL Progression Lifecycle

Stage Owner Exit Criteria Target Conversion
MQL Marketing Score threshold 100% routed
SQL SDR Live qualification 40-60% of MQLs
Opportunity Stage 1 AE Proposal scoped 80-90% of SQLs
Forecast Category AE Commit/Best Case 25-40% of SQLs

Industry Benchmarks

Metric Median Top Quartile Target Conversion
MQL → SQL 25% 45% 100% routed
SQL → Closed Won 20% 35% 40-60% of MQLs
SQL Creation Velocity 3 days 1 day 80-90% of SQLs
SDR SQLs/Week 8-12 15+ 25-40% of SQLs

Common Mistakes

  • Premature SQL Creation: No confirmed budget/timeline, creating junk pipeline.
  • Over-Qualification: SDRs rejecting viable MQLs, starving AE pipeline.
  • Poor Handoff: Minimal intel passed to AE (just "SQL created").
  • No Feedback Loop: Marketing unaware which MQL signals predict SQL success.
  • Definition Drift: Sales lowering criteria during pipeline shortages.
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The Fix: Strict MEDDPICC/BANT enforcement, standardized discovery templates, joint MQL/SQL definition, weekly conversion reviews, automated progression rules.

Frequently Asked Questions

What is the difference between SQL and opportunity?

SQL status confirms buyer intent and readiness. Opportunity status usually requires scoped solution, pricing, and champion alignment. An opportunity is typically created 1-3 days after SQL confirmation.

Who owns SQL creation, the SDR or the AE?

SDRs own initial discovery and SQL creation. AEs may create SQLs directly from high-value inbound or executive referrals.

What SQL-to-close rate is realistic?

Median: 20-25% 

Best-in-Class: 30-40% 

Lower rates indicate qualification gaps or competitive pressure.

Should PLG companies define SQLs?

Yes, but product usage replaces live discovery. For example, active trial users with power feature adoption and seat growth could qualify as SQLs.

How do you handle SQLs that don't progress?

Implement stage aging rules (14 days Stage 1 → re-qualify or nurture) and SDR/AE deal inspection to surface stalled progression.

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Lead Management & Qualification

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