MQL quantity vs. quality: How should marketers test the balance?

Marketers: Have you achieved the perfect lead score threshold for marketing qualified leads (MQLs)? Or is it so high that you’re leaving Sales “hung out to dry?”

Here’s how to lower your lead score without burying your business, as observed within Insight Partners portfolio companies by my colleagues Jeremey Donovan and Alison Kuo Sullivan.

Marketers must always test and optimize lead scores, and they should do so in partnership with Sales, CustomerSuccess, and Product. Together, you’re a “Lead Scoring Council.” Like The Fed, your “dual mandate” is to maximize win rates and lifetime value.

Though your Council should meet at least once per quarter, there are many instances in which y’all should get together to evaluate lowering your lead score threshold:

  • You’ve hired several new account executives (AEs) or sales development representatives (SDRs) who need leads
  • Your firm is launching new products or markets and don’t yet have predictable lead flow
  • Your sales pipeline is critically weak

To analyze how lowering your lead score threshold might impact your sales funnel, conduct an A/B test: Lower the threshold in Territory A while keeping it constant in B. Throughout the test period, measure funnel conversion rates, sales cycle length, and ultimately deal win rate (and average contract value [ACV] of said deals).

When you lower your lead score, you’ll likely see a decline in conversion and win rates. But if you make up those declines in deal volume and value, your lower lead score works.

However, watch out for The Capacity-Energy Death Spiral.

Your Sales partners are limited in both their capacity and their energy to work leads; go beyond this limit and your higher volume of MQLs might actually result in *fewer* deals. Capacity describes the number of simultaneous leads/opportunities (opps) a salesperson can handle. And since salespeople must invest more energy into poorer leads, their capacity for better leads/opps might decrease alongside their win rate.

More leads = fewer top-quality Opps worked + lower overall win rate = death spiral. The upshot: Only give reps more and lower-quality leads to the extent that they can “afford the hit” to their capacity and energy for working top-quality leads.

There are other important considerations and some helpful math equations to go along with them. Check out Jeremy and Alison’s post on the Insight Partners blog.

Jared Brickman

Jared Brickman is Senior Director of the Marketing Center of Excellence at leading software investor Insight Partners, where he advises CMOs of the firm’s 500+ portfolio companies on how to go-to-market. Learn More →

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