What Are Sales Qualified Leads & How to Recognize Them?

Ania Rubkiewicz and Kasia Kowalska
9 min read
Dec 19, 2023
  • Post on Twitter
  • Share on Facebook
  • Post on LinkedIn
  • Post on Reddit
  • Copy link to clipboard
    Link copied to clipboard

If you’re as much of a The Office fan as I am, then you’ll likely remember a couple of episodes, where the sales staff anxiously awaited the arrival of so-called “sales-qualified leads” (or, more accurately, competed against one another for them). And there was a good reason for it, as they’re an essential source of clients! 

What is a sales-qualified lead?

A sales-qualified lead (or SQL, in short) is a prospect whom you consider ready to interact with your sales team. As a rule of thumb, these individuals have shown enough interest in your offer for you to assume that they’re ready to “talk business”. Of course, SQLs rarely appear out of thin air!

Before you get your hands on any of these “hot” leads, each prospective customer is verified by your marketing department. They’re the ones who “catch” the exact moment when a lead becomes sales-ready to help you boost the likelihood of closing deals. 

In fact, LinkedIn research has found that treating sales as a team sport pays off. Companies, where marketing and sales teams cooperate closely, are 67% more likely to convert leads into customers, 58% “more effective at retaining clients” and see a 208% higher revenue generated by marketing.

So, what criteria should you use to deem a lead an SQL? I’ll discuss some examples of actions and behavior later in this piece.

Connect with customers

LiveChat is a complete customer service platform that delights your customers and fuels your sales.

Trusted by 36,000+ companies

Free 14-day trial

What’s not a sales-qualified lead?

Now that you know what a sales-qualified lead is, it’s worth understanding what isn’t an SQL.

Leads are not created equal. Just because someone visited your page a couple of times doesn’t mean they should be qualified as “sales-ready”. Usually, before a lead becomes an SQL, they’re categorized as an MQL, which you must nurture to become a sales-qualified lead. 

An SQL is not a lead who just educates themselves on a topic by downloading an ebook or browsing your site. It’s important to note that not all MQLs will be qualified as SQLs since not all of them will be a good fit for your company. 

Leads of low quality aren’t SQLs and will probably never be qualified as such. These include those that:

How to identify sales-qualified leads

If you notice that a lead becomes aware of their problem, and starts to actively search for a solution, for example, by registering for a demo, then high chances are they can be categorized as an SQL. I said “high chances” on purpose, as there will be situations where signing up for a demo won't deem the lead ready for a sale. 

The truth is that in order to correctly qualify leads, it’s important that sales and marketing teams work closely together to:

With the above in mind, here are a few characteristics of sales-qualified leads:

With the above in mind, the best way to identify SQLs is through lead scoring, which we will discuss next.

How does lead scoring work?

To understand where sales qualified leads come from, it’s important to know how website visitors are turned from “just” visitors into leads, and what steps they go through to become SQLs eventually.

As you might already know, inbound sales can be divided into a three-step funnel of awareness, consideration, and decision stages. 

In the awareness stage, the individual comes across your website (or information on an external site) and becomes aware of your offer. HubSpot aptly refers to these people as “strangers” as you don’t know whether they’ll be interested or indifferent to your offer. 

If it’s the former, and they do something that points to their interest (say, they read a blog post and decide to sign up for your newsletter), then they can be considered leads. Ideally, as they go down your sales funnel, they’ll enter the “consideration” stage and become marketing qualified leads. So, what does it take to turn MQLs into SQLs? Here’s where lead scoring comes into play.

Lead scoring usually entails observing your leads’ behavior and ranking them based on their actions and how well they fit your sales persona. While each company has its own criteria of when an MQL can be confidently passed on to the sales team, some of the factors could be:

That being said, based on my professional experiences, some companies will qualify a lead as sales-ready after they’ve signed up for a free account. And they’re in the right, as free plan users haven’t actually gone through the whole funnel, and your business isn’t earning from them (at least not yet). 

Rather, they’ll see them as the hottest leads in the funnel, and the sales team will work towards convincing them to upgrade to a paid plan.

If you’re interested in learning more about lead scoring criteria, be sure to give our marketing qualified leads article a read, where we discuss the intricacies in more detail.

Examples of actions a sales-qualified lead will take on your website

Among others, a sales qualified lead is likely to:

Look at your pricing page 

This makes perfect sense since you ask yourself “how much would it cost me?” when you first learn about what a company offers. If you’re a SaaS company, then bonus points if you notice that your lead has not only visited your pricing, but also clicked at the various plans. 

Sign up for a demo

Signing up and participating in a demo proves actual interest. After all, it requires your lead to schedule the time in their calendar and show up to the meeting. That’s where your sales team should truly shine and seek to address any questions standing in the way of the purchase.

Create a free account

If you offer a virtual product that has a free plan, then chances are, your SQLs will take it for a swing. The same goes for physical items – if you offer cosmetics, then your SQLs could reach out to your team and ask you to send over some free samples. If they like what they see, then you should strike the iron while it’s hot.

Send you an email or a chat message to ask about pricing

Not all businesses publish their pricing online, some prefer to share it individually with prospects. If someone asks you how much your solution costs, then it’s a clear indication that they’re evaluating their options. After all, they made the effort to contact you; it's a great time for the sales team to get additional information about the lead's problems and expectations. 

Look at your competition comparison pages (if you have any)

It hardly ever happens that a lead from the beginning is set on one solution only. They usually evaluate multiple options before making the final decision. If you notice that they visited a few of your competition comparison pages, then it’s worth giving them a few extra points in your CRM! They wouldn’t be looking at alternative solutions out of boredom, well, at least most leads wouldn’t. So, don’t miss out on the opportunity to engage with them. 

Got the desired number of points from lead scoring

It’s for your sales and marketing teams to decide how many points a lead has to get to become ready for a sale, and how many points should be assigned to each action. Just make sure to pass on the “hot” leads to sales at the right time, if you wait too long then they might go somewhere else. 

Connect with customers

LiveChat is a complete customer service platform that delights your customers and fuels your sales.

Trusted by 36,000+ companies

Free 14-day trial

It’s OK for most leads to never become SQLs

Sales-qualified leads should be about quality, never about quantity. 

If you get your qualification criteria right by closely cooperating with sales then you’ll boost your chances of turning your SQLs into paying customers. It’s perfectly normal for most leads to never progress into sales-qualified leads. 

The good news is if you focus on the right ones, then you will increase their customer lifetime value, reduce churn and lower your customer acquisition cost.  All that’s left to say is good luck with your lead hunt!