Insights
April 26, 2022

How Sales Qualified Leads (SQLs) Differ From Sales Qualified Opportunities (SQOs)

For companies selling B2B software, keeping a steady flow of leads between lifecycle stages is critical. An interruption at any point will likely result in not enough work for your sales team down the road. 

To make sure there are always enough people converting from one stage to another, marketing teams need to receive constant feedback from the sales department. Any decrease in flow calls for changes to the marketing strategy — either better lead targeting or simply increasing the amount of people at the TOFU (top-of-the-funnel). 

Why would the flow of people decrease when it reaches the sales team? Most likely it’s due to the changes in sales qualification. 

Sales qualification is a process of evaluating leads based on how likely they are to buy your solution. This process can be manual and complex, with assigned scores based on a matrix of assessments. Alternatively, it can be as simple as marking an incoming MQL (marketing qualified lead) as SQL (sales qualified lead), SQO (sales qualified opportunity), or disqualified (e.g. for not providing an email address in a form for a demo or further engagement). 

A rough difference between SQLs and SQOs is that the former look promising, but the latter are actually the ones most likely to buy.

To understand what happens before and after SQLs and SQOs, we need to look at a complete buying cycle. 

The Buying Cycle: Marketing Qualified Leads (MQLs) in the Sales Process

Most sales teams define their own lifecycle stages in the conversion funnel, adjusting them to fit their product or service better. 

Usually, the customer lifecycle stages would include: 

  • Visitors. Any real user (bots should be filtered out) who lands on your website is considered a visitor. This is an important marketing metric that has a direct impact on the rest of the funnel. 
  • Leads / contacts. When visitors exhibit interest in your company by providing some of their information (e.g. phone number or email address), they become leads. Some marketing teams refer to them as contacts, since this provides an opportunity for engagement. 
  • Marketing qualified leads (MQLs). Leads become MQLs when they are deemed to be close to your ICP (ideal customer profile) and continue to show interest in your solution. 
  • Sales qualified leads (SQLs). A critical jump in the funnel is realizing when an MQL is ready for a discovery call or other sales contact. Then they become an SQL and are handled by the sales team. 
  • Sales qualified opportunities (SQOs). SQLs migrate to SQOs when a macro-level fit has been established and now it’s all about working out the details. 
  • Customers / buyers. SQOs turn into customers when they sign the deal. 

Every stage is important and can be improved with a new marketing strategy or through conversation with potential customers. But when it comes to the quality of your sales process, focusing on SQL and SQO stages will yield the most benefits.

How Actions Turn SQLs into Potential Customers 

Your sales process officially starts when MQLs pass onto the SQL stage, the fourth of six in the funnel. So what is an SQL exactly? 

In most cases, for a lead to turn from marketing to sales, it needs to request an interaction that’s handled by the sales team, such as a live product demo or a discovery call. The meeting would confirm the lead’s interest in the solution and answer some high-level questions. 

It could be that leads blow right past the SQL stage, dive deep into details right away and buy shortly after. In other cases, SQLs might think about it, shop around, compare solutions, etc. 

That’s why it’s important for sales teams to learn to assess the fit of every SQL coming in. There are lots of metrics that can be used, from the number of employees to geographical locations, to revenue, to industry, and more. Buyer personas and ICPs help automate this qualification process somewhat. 

It’s definitely worth spending time on leads that are high-fit and high-interest and avoid low-fit and low-interest ones. 

You should also realize when a company is high-fit but has low-interest — those leads might even go back to the MQL stage for extra nurturing. 

At the same time low-fit, high-interest leads can become customers, but your sales teams should minimize interaction with them, using predetermined contracts and standardized agreements when possible. 

So companies should spend more time with high-fit, high-interest SQLs. But how do you effectively find them?

Why Time Spent as SQLs Matters for Buyers?

Knowing who your SQLs are is crucial. To separate them, you should have clear boundaries between different lifecycle stages, especially at the MQL, SQL, and SQO levels. 

Setting arbitrary boundaries can easily backfire as well. If you consider everyone who books a meeting an SQL, then lots of low-fit but high-interest MQLs would overwhelm your BDRs. 

That’s why it’s important to track average stage-to-stage conversions throughout the funnel. If you get a jump in unqualified leads, you’d be able to see where it started, and which stages need to be tightened up. 

The SQL stage is especially important because it guards the opportunity stage that follows, which requires a lot of time and attention, and where only select leads should end up. 

In some ways, letting leads spend more time as SQLs can speed up the following SQO process and turn them into buyers faster. For example, you can work on your marketing website and documentation in a way that explains lots of SQO-type questions clearly, along with case studies and free trials. 

What Are SQOs: Lead vs Opportunity Decisions? 

As mentioned above, SQLs should be considered SQOs when they are ready to buy your solution, but just have some micro-level doubts or questions left to resolve.

SQOs might’ve already tried your product (as a trial) and have some specific concerns or customization suggestions. Pricing and volume discounts are also a big point of discussion at the SQO stage.

It’s clear that properly screened SQOs are what your sales team should spend as much of their time on as possible. This means that qualification in the rest of your funnel should be quick, accurate, and automatic. How do you achieve that? The answer is artificial intelligence. 

Lift AI is a buyer intent solution that leverages a vast machine-learning model for instant website visitor scoring. This app can predict the likelihood of every visitor converting to a customer as they engage with your website, even if they are completely anonymous (and up to 98% of them could be). 

The uniqueness of Lift AI comes from billions of data points that the model has been trained on as well as over 14 million live sales conversations. At the same time, Lift AI integrates your own first-party data (e.g. time on page) to determine buyer intent of your visitors. 

When a high-fit, high-interest visitor comes to your website, Lift AI can initiate a playbook in your live chat platform to connect them directly to your BDRs. Visitors that have low scores are delegated to a nurturing bot or a self-help guide instead.

This maximizes the productivity of your BDR team, as they are spending time chatting with the right leads, while chatbots are being used efficiently for the remaining visitors (instead of engaging high-intent visitors, which may sabotage the lead). 

The impact of of Lift AI can be seen in a case study done from 21 Drift customers who saw an average of 9x increase in conversations to pipeline.

Additionally, PointClickCare grew conversions by 400% and Formstack tracked an 88% increase in its chat pipeline.

Want to see results like this on your website? Try Lift AI for yourself — for free. You get a 30-day trial when you sign up, and you only need to paste a small JavaScript snippet to start. 

There’s never been a more perfect and easy fix for your conversion funnel. Feed the best leads to your team directly and only talk to others when you have time. It’s not really that surprising that using Lift AI spikes conversions so quickly, after all. 

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