Why is it So Hard to Generate Sales-Qualified Leads?

Generating marketing qualified leads (MQLs) is relatively simple. But why is it so hard to generate sales-qualified leads (SQLs) close to converting?

That’s what we’ll unpack in this post. We’ll also discuss the most common mistakes that make it so difficult to generate sales-qualified leads so you’ll know what to avoid. 

The Difference Between MQLs and SQLs

You’re likely somewhat familiar with these terms, but let’s briefly explain the core differences, so we’re crystal clear. While the exact definition will vary from organization to organization, an MQL is a lead that’s higher up in the funnel, whereas an SQL is a lead that’s toward the bottom of the funnel. 

An MQL has taken a specific action to express an interest in learning your solutions, such as subscribing to your email list or downloading an eBook. An SQL, on the other hand, has expressed an interest in buying a solution, such as requesting a demo or downloading a trial version.

This graphic illustrates it well.

The bottom line is that an MQL is a reasonably qualified lead that fits your ideal customer profile but isn’t at the point where they’re ready to buy. And an SQL is a highly qualified lead that has shown intent to buy and is, subsequently, someone your sales team wants to pursue actively. 

Why It’s Harder to Generate Sales-Qualified Leads

Let me start by saying that some leads will enter the sales funnel closer to the top, while others will enter closer to the bottom. So having a mix of MQLs and SQLs is healthy. A good inbound strategy should generate MQLs at an even flow and within a short time for most industries (within the first 90 days). 

But the fact is that many companies find it far more challenging to generate SQLs than MQLs. Why is that?

For starters, by default, most campaigns have a skew where more leads simply have an interest in learning about a solution than leads that are interested in straight-up buying. There are no hard numbers on the average ratio of MQLs to SQLs, but it’s reasonable to apply the 80/20 principle here, where a much higher number of leads will be at the awareness or consideration stages of the sales funnel while a much smaller number will be at the decision or purchase stages. 

After all, it’s much easier to get a lead to subscribe to your email list or download an eBook than request a demo or download a trial version of your solution. The inherent level of commitment (especially when talking about a high-priced solution) that comes with being an SQL naturally creates a disparity where more leads will lean toward being an MQL. 

So that’s one of the biggest reasons. But it goes deeper than that. 

A good SQL strategy is unique because it requires sales and marketing to work in tandem. It requires you to have a clearly defined approach to MQLs in place and continuously review and improve them. It often requires an inbound and outbound component and should always work directly with SEO, as inbound marketing was designed via platforms like HubSpot. In addition, a lead generation component such as ABM or PPC also plays a role. 

There’s also the issue of a prospect’s perception of your business vs. competitors. At the end of the day, you’re competing against others within your industry for a finite number of highly-qualified leads. If competitors can beat you in areas like follow-up speed, price, and visual presentation, it will be more difficult to generate sales-qualified leads. 

If you’re wondering, studies have found that the average MQL to SQL conversion rate across all industries is 13%. 

The bottom line is that generating SQLs is more involved and requires the coordination and alignment of different moving parts to execute successfully. Therefore, it’s substantially more complex than generating MQLs. Without a proper strategy in place, it’s easy for companies to haphazardly approach the process and get mediocre results because of it. This brings me to my next point. 

Common Mistakes When Going After SQLs

Every situation is different, but I find there are six principal reasons companies fall short.

Not Understanding the Core Audience

If you haven’t properly identified the specific audience you’re targeting with your marketing — especially leads toward the bottom of the funnel — you’re obviously going to struggle to generate sales-qualified leads. After all, your core audience will dictate the type of content you create, the topics you address, the keywords you target, and more. 

That’s why a critical precursor is taking the time to fully understand who you want to reach, which you can do by creating an ideal candidate profile or user model.

HubSpot has a great article on this. 

Not Researching the Market Comprehensively Enough

Going a step further, many companies fail to perform an adequate amount of market research. From comparing your UVP against close competitors to researching similar products and inbound strategies to identifying consumer psychology, attitudes, and pain points, market research is critical to developing a strong sales funnel.

Falling Behind Competitive Trends

As previously mentioned, getting beaten out by competitors is a big reason companies struggle to generate sales-qualified leads. A critical component of that is lagging behind on competitive trends, including web design, UX, and content channels. With many industries becoming increasingly saturated, it’s essential to keep your finger on the pulse to know what your audience is receptive to at all times. 

Not Ensuring Your Process Meets Professional Norms

Say company A has an airtight inbound marketing strategy and lead generation process at all stages of their sales funnel. And let’s say company B halfheartedly slaps everything together and flies by the seat of their pants. Which company is more likely to succeed with its lead generation efforts?

Obviously, company A will have a tremendous advantage here. That’s why it’s so important to ensure your process meets professional norms so that it has a realistic chance to succeed. 

Underutilizing Case Studies 

Case studies highlighting a customer or client’s real-life results after using your solution are one of the most effective forms of content. It’s also ideal for appealing to leads toward the bottom of the sales funnel who are ready to decide on a purchase. 

It’s a strategy we implement at 3.7 Designs, and it has given us excellent results. From our observation, however, case studies are still highly underutilized, which is why it’s a form of content that we strongly suggest for most companies. 

For ideas, you can check out examples of our case studies here. 

Failing to Rely on the Trusted Expertise of a Dedicated Agency

If your company is active in inbound transformational change or undergoing the development and improvement of a qualified lead strategy, finding an agency with experience in driving leads at all points in the sales funnel is preferable. While many companies can generate solid MQLs on their own, it’s not always the case with SQLs, as the process is significantly more complex. And those that try to go it alone often struggle.

Partnering with 3.7 Designs

If you’re interested in getting the expertise of a dedicated agency, 3.7 Designs will be happy to help. We’ve assisted companies across several industries build high-performing campaigns that identify and connect with their core audience and convert them into qualified leads at all sales funnel stages. You can reach out to us through our online form to learn more and discuss your project.