Is the MQL Dead? How Marketers Can Find the Channels that Drive Real Revenue

Is the MQL dead? Some say the marketing qualified leads are dead or at least dying. We’re going to dig into that in this episode of Closing Time. Hi, everyone. My name is Chip House. I’m the CMO at Insightly. And today I’m joined by John Short. So John is the CEO of Compound. Growth Marketing. He’s a long time marketing leader and he’s an expert in this space. And I’m super excited to have this discussion with him. Welcome, John. Thank you.. Thanks for having me on. It’s always fun. It’s always fun to talk to you, Chip. Yeah, absolutely. We had a conversation on your podcast a few weeks ago, so but I’m excited to dig into this topic. So MQLs, marketing qualified leads, you know, you’re hearing about more and more marketers saying, hey, you know, we’re going to move beyond MQLs and just not focus on them heavily anymore. Why do you think that is? Yeah, so I think a lot of this is driven by the SiriusDecisions’ definition of the marketing qualified lead. To me, it doesn’t really matter what you call it, it’s the second stage in the marketing and sales funnel. To me, it’s a signal of a lead that you think is qualified to talk to a salesperson. I’ve heard people call it marketing qualified accounts, which I think is accurate, product qualified leads, qualified leads, whatever. But I think that the definition of that marketing qualified lead, I think really what we’re seeing there is a rebellion against driving leads into eBooks looking to qualify them based on ICP, passing them to a team of SDRs which can be a really inefficient sales motion. I think that’s the crux of it, right? Is, it’s tied into the efficiency of this model and the fact that all MQLs aren’t created the same. So if you think back to like Glengarry. Glen Ross. Yeah, the Glengarry leads, which the good leads, you know, only for the great salespeople. And then you have the other leads, which was basically the phone book that the salespeople would have to call on. And so it’s just the modern equivalent version of that, isn’t it? Yeah. Yeah, I think so. And I think, I mean I, I think a lot of this is kind of a follow on to what we’ve seen in the product led world for years, where when I was at LogMeIn in 2009, 2010, none of their leads were going to ebooks. They weren’t doing any, what people are calling like lead generation today. They were focused on driving down funnel leads into the product. So there was a lot of education that needed to happen beforehand. We didn’t have a giant army of SDRs going after these leads, and that is really, even with companies that don’t have a free trial or that prefer users to come in and talk to their salespeople. That’s really the motion that we’re seeing more and more these days where you want to educate the customer more of the education is happening through your website, through G2 Crowd through other sources before they come to your site. And then by the time they get there, they’re ready to talk to your sales team. The benefit is twofold. One, I think that the process of talking with SDRs is a broken sales process, right? I had a company that I spoke to a couple of years ago, Inside View. I don’t know if they even exist still, but I needed to make a purchase and I filled out a lead form on the site. I got a call from an SDR. They spent 15 minutes qualifying me. I got nothing from it. And then they scheduled a meeting a week out and. I just needed to move quicker than that. So that’s one area where. I think we can improve, where we’re seeing improvement for the customer. And then from the sales and marketing efficiency perspective, it’s really tough to have BDRs banging on the phones when somebody has not shown very much intent to purchasing your product or not showing a lot of care. They downloaded an e-book about something that is maybe tangentially related to your product and they may not even remember your brand and that you’re going to get a lot of complaints from your sales team these days if you’re passing them those types of leads for them to follow up with so to me, the marketing qualified lead sits on two axis. You have the intent of the lead. So that can be the very lowest form of intent is like an ebook. Somebody who’s signing up for your newsletter and the highest form of intent is somebody who’s requesting pricing information or they’re asking to talk to sales, they’re starting a trial. Then you have on the on the y axis, you have the the match to ICP and that is job title. The other software that like Technographic information, firmographic information, demographic information, other kind of characteristics that might tell you that you’re talking to somebody in your ICP and, and we look to find people who are high intent and have a high match to ICP that we want to pass to the sales team. Everything else to kind of bubble that person up and get them to raise their hand is done through the marketing funnel by through advertising, content, social, all the different channels that we can use to educate and build that kind of demand for customers. I love that visual and intent on one axis and ICP fit on the other makes a ton of sense to me and I think that one of the problems with MQLs is that creates issues, especially in this age where sales and marketing alignment is so important. You know, since the dawn of days, marketers have been figuring out how to kind of track their worth. So to speak. Right. Whereas it’s easy in sales, you keep score, number of deals, sales dollars brought in you know, you live and die by the revenue. And in marketing it comes down to hey, is it followers, is it opens, is it clicks, you know, and MQLs is a great way to track your impact. But we’ve moved beyond the age where marketing needs to give the contact information to sales for them to reach out. There’s plenty of sources, right? You know, to go get the contact information. But one concerning piece about it and I’d love you, you talked about this, just all MQLs aren’t created the same. And so some will drive revenue, some sources won’t depending on their levels of intent. And so that leads to dysfunction in a lot of sales and marketing teams because the marketers are taking a lap, high fiving as they made their MQL goal. And the sales team all miss the goal. Right. And that’s a huge issue. So drill into that a little bit. I mean, what sources, you talked about eBooks, you know, I know there’s content syndication, which is another way to get your content out there. Talk to me again about some more sources you think are maybe not as high on the intent level and how to move people or find MQLs and create demand that’s higher on the intent axis. Yeah. So one of the ways that we do this is really we’re looking to figure out what people need to know in order to ultimately drive them to come in, raise their hand and say they’re ready to talk to a sales person. So an exercise that I really recommend. Something that we do is the buyer intent journey and we look at the journey that a user takes from being in our ICP and generally aware of our product existing to the pain points that somebody is having to when they’re in market searching for, you know, CRM software, your competitors, they’re searching for your brand or maybe even features within your product.. Pain would be people who maybe don’t know they need a CRM yet. They’re looking for a way to manage their leads. They’re looking for a way to forecast revenue. They’re looking for a way to connect data they’re getting from marketing with what’s going on with the customer success team. Right?. Those are all things that Insightly CRMs are able to help companies with. But understanding those pains is really critical and then figuring out the ways to start to build trust through the awareness. And I think about building content at each of the stages of these journeys so we can have something for those users to build trust early on and then finally get them to close and start to raise their hand when they’re further down in the funnel with us. So we think about that and then we think about inflection points. So for a company like Insightly,. I think about inflection points like if a company just raised funding, they may be scaling up their sales team and they’re likely going to need to move off of like an entry level CRM on to a CRM that has the capabilities that something like Insightly has. Right? So I think that can be really important for the companies or a really important inflection point. I think you can also find that when a new CRO joins a company and they’re trying to figure out how to improve the efficiency, they may come into market for looking for a new CRM. So those are the types of inflection points that we look for as signals. And that’s what I love about 6sense, you were talking about that earlier. They pay attention to the events, ZoomInfo pays attention to external events. That may be a really strong signal that somebody is going to come in market. Makes sense. So first of all, I guess, John, are you advocating for moving away from them? And then also, I guess secondly, what should marketers focus on for metrics, if not the MQL? Yeah. So I think that marketers should start to look down funnel and pay more attention to the pipeline generated and the opportunities they create. I think marketing and sales have the healthiest relationship when there’s a little bit of friction between the two teams. So marketing needs to drive leads, but when they’re paying attention to whether or not pipeline is created from the leads that they drove, they don’t have complete control over that. They’re not on the phone, they’re not making sure they’re following up with those leads. They aren’t able to, you know, create the opportunity by setting up the perfect sales call, that’s on the sales team. But I still like when marketing is gold on that metric, because what I’ve found is marketers start to pay attention down funnel. They start to look at the lead sources that drive in traffic that ultimately become opportunities because there is a different in terms of the customer economics of what the conversion rate is from lead to opportunity, based on the channel, based on the content, based on the things that marketing is impacting. I don’t think marketers should get rid of the MQ. I think it can be a really valuable metric, but I think it’s been abused. I don’t care what you call it, it’s the second stage in the marketing and sales process. So you’re going to have a set of leads that come in. Some of them you’re not going to want to have them talk to the sales team. Everything that’s qualified to the sales team, based on the chart that I talked about, intent and matched to ICP, those are the leads that I want to pass to the sales team and there should be with your MQL metric, it should be predictable how much pipeline you’re going to create from that MQL and how much revenue you could potentially create from that MQL. So I think that MQL is actually an incredibly valuable metric, whatever you want to call it. But that second stage in the sales and marketing cycle is really good feedback for marketing that, hey, these campaigns are working, you can pass that data into Google ads, you can pass that data into Facebook to help optimize cost per lead bidding and then it’s also a really good kind of way to qualify leads that should be talking to your sales team. So I think, you know, maybe the SiriusDecisions definition of marketing qualified lead or I’ve seen people call it high intent leads or I’ve seen them call them high intent qualified leads or whatever. I think it’s relevant and a really important metric. Yeah. I think that you highlighted where the problem might exist is when when marketers try to game it maybe a little bit because, you know, it’s tempting. You can certainly bring in a lot of leads by creating awareness for the organization, but they may be very early in their journey. They could be considering all of your competitors. Right, right. And that’s where lead scoring came from in the first place, which was really a way to, you know, somehow track how far through the buying journey a buyer is and how engaged they truly are. Right. Right. Yeah, yeah. And I think where we went wrong with lead scoring is every time somebody had a page view, we gave them a point. And every time they downloaded a new piece of content, we gave them a point. And I think that ultimately, what we’ve found, what marketers are finding, is the leads that are coming in and converting on low intent funnels are the ones who are going to be most likely to have great conversations with the sales team. Yeah,. I mean, so somebody raising their hand you know, because they’ve done their journey either on your site via your email nurture or on other sites or talking to former customers, whatever the journey is. Right. The hand raise is an important piece of at least indicating who might be some of the best people to talk to. Absolutely. An exercise that I really enjoy to kind of build a predictive model to understand how to start to drive awareness and drive intent into the product is using we use Google Analytics, and if you go into Google Analytics, you can use a feature in there called segments. And in segments there’s two segments out of the box that Google Analytics gives to everybody. One is converters, the other is non converters. And so when you go into Google Analytics and you look at converters versus non converters and you look at the characteristics of those users, what you’re likely going to find is converters spend two x more time on your site than non converters do two to four X, more time on site and then they are visiting four to five times as many pages. You can start to see the characteristics of users who are likely to convert. What are users who are converting doing? What content on your site are they more likely to look at? They’re more likely to look at product pages. They’re more likely to spend more time on site. So this can all be feedback for your higher funnel like LinkedIn marketing campaigns, Facebook marketing campaigns, SEO, social content that you’re creating. Understanding what drives interest and what users who are actually interested in your product are doing can start to help you build out like a non fancy, you don’t need to be a data scientist, but predictive model to understand what the characteristics are of users who are likely to come in and ultimately drive demos. And for marketers, that can be a really useful tool when you’re like, OK, we took out gated content. Now there’s this giant space between, you know, us building awareness with the customer and us driving a demo and what can we do to add some non fluffy metrics in there to kind of understand and make sure that we’re setting ourselves up to drive demos in the future. How are we building that pipeline of anonymous users who are eventually going to come in and raise their hands with us? So that’s one of the exercises we focus on, too. Well, Jon, great discussion. Thanks so much. Awesome. Thanks. Yeah, absolutely. And to all of you, thanks for joining us today on this episode of Closing Time. Please hit subscribe, tick the bell and we’ll see you next time.