MQLs Matter, but Pipeline Matters More
Why overemphasizing 'MQL Volume' can detract from other strategic revenue generation metrics and initiatives.
Many marketers would agree that an important measure of success for their demand gen efforts is the number of Marketing Qualified Leads (MQLs) that have been generated across a wide range of activities, which might include content syndication, email and newsletter promotions, and even display ads. Various MQL criteria - which define how engaged or ‘purchase-ready’ a lead is - can help the sales team prioritize their outreach efforts.
However, while MQLs are certainly an important “leading indicator” of commercial growth, focusing purely on MQL volume can sometimes result in short-sighted marketing investments, enable “bad behaviors”, and minimize marketing’s contribution to overall revenue, argues Gartner Analyst Rick LaFond, in his recent blog post “Beware of the MQL Trap.”
MQL-generation can become a bit of a self-fulling prophecy as marketing activities become squarely focused on bringing in more MQLs while potentially overlooking the longer term impact of brand and content marketing initiatives.
“By merely communicating how many times you provided your sales team with a lead for reps to convert, you risk positioning marketing as the sales team’s trusty sidekick—not as a strategic commercial growth leader,” writes LaFond.
ABM, The Buyer’s Journey, and Focusing on Pipeline
Anadelia Fadeev, Senior Director of Demand Generation at Teleport, agrees that while it’s important for marketers to track funnel metrics - like MQLs - at the end of the day, pipeline is what should matter most to both the sales and marketing teams.
“Are the activities that you're doing across sales and marketing producing the pipeline that you need for your business? If the answer is no, then you need to start digging into each funnel stage to understand where the issues might be, and try to resolve that,” says Fadeev. “Emphasizing MQLs doesn't really show the full picture.”
According to Fadeev, one of the primary reasons that account-based marketing (ABM) has become so popular is that organizations have realized that the buyer’s journey for enterprise software is not linear. There is no one metric - like MQLs - that can capture an organization’s product needs or buying intent.
“When you're selling enterprise software, chances are that you have more than one person influencing the deal. You might have someone doing the research, somebody that influences the deal, and an economic buyer,” says Fadeev. “You have multiple touch points across several people in the company and MQLs simply don't show the full picture of that buyer's journey.”
“MQLs really are a way to prioritize leads for sales and potentially gauge the quality of those leads - the reality is that it's not a perfect system,” says Fadeev.
LaFond concludes by suggesting that marketers should continue to track MQLs and MQL volume but “prioritize other metrics that are more closely connected to revenue outcomes,” such as marketing contribution to revenue, MQL conversion rates, and cost per acquisition.