MQLs are insufficient for the modern marketer’s needs. To drive revenue, you must begin with the end in mind.

Few CMOs would disagree that revenue is the true measure of marketing’s success. And yet your marketing team is likely hard at work generating MQLs — marketing qualified leads. In fact, according to a recent Fortella survey, 70% of marketers believe that MQLs are either an ‘extremely important’ or ‘very important’ metric for measuring their performance. So why do most marketing teams continue to be overly driven by producing sufficient MQLs, rather than revenue contribution? 

For far too long, marketers have been trained to play the ‘batting average game’ — focus on producing more leads and improving conversion rates so enough of them convert to sales opportunities (i.e. pipeline). MQL methodology is what they’re familiar with and even if they wanted to try something different, virtually every marketing application is designed around delivery of sufficient leads and not pipeline. 

Apart from being suboptimal from an efficiency standpoint, the MQL approach puts marketing and sales teams at odds with each other. Sales teams are measured on bookings target or quota attainment, not lead conversion. So when sales can’t meet its quota, they often complain that “marketing isn’t generating quality leads.” And marketing responds that “sales isn’t following up on their leads”. Research shows the average sales team ignores 50% of marketing leads and only 7% believe that leads received from marketing are of high enough quality. 

So is this a sales and marketing alignment issue? Well, yes, but that’s just an unfortunate symptom of the real problem. The underlying issue is that marketers don’t track the most critical metric. In their pursuit of MQLs, marketers are ignoring delivery of pipeline – in fact “qualified pipeline” to be more precise. 

True north for marketing is ‘qualified pipeline’

Sales operates on the basis of near term pipeline coverage — do we have enough real pipeline (e.g. 3x) for this quarter and the next to meet our quota? However marketing needs to have a forward-looking pipeline plan, i.e. ensure that they are producing enough ‘real pipeline’ so sales can achieve their quota in future quarters?  

And while we’re on the subject, what is ‘real pipeline’ anyway? Is it when the MQL is converted to an opportunity or when sales has qualified that opportunity with a real value and close-date that everyone trusts to be true? 

In order for sales and marketing to have genuine alignment, marketers must plan and track qualified pipeline as their core metric for success, and they must do it in a forward-looking manner. Their qualified pipeline plan needs to take into account actual sales cycles, deal sizes and conversion rates so that no-one is left scrambling.They need to do all of this for every go-to-market segment and sales territory. It’s a completely new way of thinking about marketing’s role in generating revenue, and it works.

All of which leads to the inevitable question of: How do you do it? How do you overhaul your marketing protocols when none of your current systems are designed to work any other way?  Read our next blog to learn more.