MQLs are a Lagging Indicator
Stop measuring them, they don't tell you crap about intent. Measure this instead.
MQLs are a lagging indicator
I know many people think MQLs are a leading indicator and the person is interested in your product/service - but I’m sorry to inform you, it’s not. Leading indicators predict the future, lagging indicators tell you about the past. MQLs deliver a lot of past information and can answer the following questions:
Are you broadly targeting the right ICP?
How engaged are your ICP?
Which channels are your ICP most engaged on?
What did they last engage with prior to becoming an MQL?
What an MQL cannot tell you is:
Are they in market right now for your product/service, or just educating themselves with the intent to buy in the future — which could be 6-12 months from now?
Sure, you can say they have “intent” if they downloaded a “Buyer’s Guide” but what you don’t know is the timeframe of that intent. And you might say, “well I buy intent data” from 6sense, ZoomInfo, Cognism, Bombora, etc, but most intent data is bullshit or speculative at best. You can read more about why this in Dale Harrison’s post on LinkedIn.
Remember John Dawes' 𝟵𝟱:𝟱 𝗥𝘂𝗹𝗲 for B2B?
95% of potential buyers are NOT in-market during any given period and only about 5% are in-market and interested in and capable of buying
Because many demand generation (DG) practitioners are evaluated on the number of MQLs they bring in per quarter, it makes the MQL less meaningful when it is scored vs. a hand raiser because the DG can manipulate the scoring to hit their number. Then you wind up getting into a quality issue. However, even a hand raiser might only be curious to learn more in the moment, but might not be ready to buy in the immediate future (0-3 months).
So then the question raised is why don’t you just only count hand raisers? The simple answer is because it wouldn’t be enough for the Demand Gen team to hit their unrealistic goals set by finance. See below ⬇️
Why most CFOs and CEOs use MQLs to judge how marketing is doing
Most CFOs and CEOs don’t know any other way to justify all of the money they are giving marketing so they need to account for it somehow. This is where Cost Per MQL comes into play (CPMQL).
Program spend $/# MQLs = CPMQL
Note: Some CFOs count head count + program spend to come up with the full CPMQL, but I would argue to only count program spend for early stage startups because otherwise it gets complicated with roles like “graphic designers” and figuring out what % of their output goes toward each channel. For example, if they make $100,000 a year, you might allocate 10% to webinars, 30% to events, 5% to swag, 40% to content, 15% website. For early stage startups this is hardly worth the effort.
CPMQL is a $ amount the CEO & CFO can understand and wrap their head around to fully comprehend marketing’s impact.
But again, it doesn’t matter because you’ve already spent the budget during your planning process, so now the discussion in your next board/leadership meeting becomes around a lagging indicator of what you did and why your costs per MQL are so high, rather than what your future plans are to mitigate what you’ve just learned.
So what should you measure instead of MQLs?
Lead effectiveness via sales qualified leads (SQLs), specifically, qualified MQLs that became stage 2 or 3 opportunities. This says they are in your ICP and sales has met with them at least twice and has established a need, understand their use cases, and can most likely assign a rough dollar amount to this opportunity. This demonstrates the high quality of the lead and marketing’s contribution to pipeline, and possibly revenue.
You can address lead effectiveness in a number of charts:
How many MQLs overall went to Stage x (pipeline), revenue
This points to the quality of your ICP and your MQLs
How many MQLs in each segment went to Stage x (pipeline), revenue
This addresses if you are attracting the right quantity of quality MQLs in each segment you’re targeting
Top 3 channels for bringing in those MQLs that turn into pipe/revenue
This confirms at a broad level that you know what channels to invest in and you are spending the budget wisely (think attribution)
Remember you can easily create this with a custom field in your CRM called MQL Source and make it so that it fills in the last activity someone did prior to hitting the MQL threshold.
What stage are you losing deals and why (closed/lost reasons), lost revenue
This shows where things aren’t working, see image
You’ll notice all of the reports point to pipeline generation and revenue/loss of revenue. Simple, yet effective reporting that you don’t have to kill yourself over and everyone across the company and board can understand.