What is SQO and SQL in Sales? Why Is It Important For Your Business?
Despite the fact that you may leverage your sales and marketing resources to generate more leads for your company, only 27% of the leads sent to sales are qualified and ready for sales.
This is where the quality of the leads comes into play. If you don’t focus on getting qualified leads, you’ll lose money and have lower conversion rates, which will hurt your bottom line. On the other hand, once you begin using the marketing and sales automation process, the sheer volume of new words like MQl, SQO, SQL, etc., can soon send your head spinning.
That’s why we decided to put in some effort to provide you with a very informative guide to crucial concepts on qualified leads, like SQO (Sales Qualified Opportunity) and SQL (Sales Qualified Lead).
Why are SQO and SQL crucial for your brand and what do they actually mean?
This article will provide you with the solutions to these questions.
The Conversion Funnel Explained
In order to better fit their product or service, the majority of sales teams establish their own lifecycle stages in the conversion funnel.
The stages of the customer lifecycle typically include the following given in the image below.
Every step is crucial, and it may be made better with a fresh marketing strategy or by speaking with prospective clients. But concentrating on the SQL and SQO stages will be most beneficial for the quality of your sales pipeline.
Why Qualifying Matters?
The reason for about 67 percent of missed sales is that salespeople don’t adequately qualify their prospects before beginning the sales process. Why would you put any sales opportunity in jeopardy, let alone a large portion of them, by improperly qualifying your leads?
The main goal of qualifying is to obtain the knowledge needed to make an informed decision.
Should you make a sale to a certain prospect? What steps should I take to finalise a deal? Does this potential customer fit your offer well? Is this a good chance to make a sale?
You can only truly determine whether it is worthwhile to commit your time and effort in trying to sell to a prospect after you have qualified them.
What is Sales Qualified Opportunity?
Opportunities are qualified leads with the potential to get converted. Irrespective of the qualifying standards set by a company, a Sales Qualified Opportunity has a higher chance of converting.
What is a Sales Qualified Lead?
A prospect who satisfies the requirements set forth by the sales process is referred to as a Sales Qualified Lead (SQL). After being initially qualified by marketing or a lead generation team, SQLs are in the midst of the sales funnel and are prepared to advance to the following stage.
Difference Between SQL and SQO
The main difference between SQL and SQO is the moment when an opportunity enters the qualifying stage. That indicates opportunity generation by SDRs (Sales Development Reps) for some organizations and opportunity acceptance by AEs (Account Executives) for other organizations. A flag is set to identify all such opportunities that meet the criteria for SQOs, and this flag is then divided by the total number of SALs to get the conversion rate from SQL to SQO.
How to Qualify an Opportunity in Sales?
Determine whether a buyer satisfies the qualification standards you’ve established for your product or business to qualify an opportunity. Prospect exploration, which involves learning more about the buying environment, can help you determine whether they fulfill your criteria.
Your qualifying standards ought to be consistent with your sales strategy and desired customer profile. One of your criteria, for instance, can be timescale – specifically, how fast the prospect wants to put a solution into practice. A buyer who wants to acquire within the next six months might be qualified for your business. Some businesses may only consider prospects who specify a duration of two months or fewer.
Everything depends on your regular sales cycle and your definition of what qualifies a buyer for your offering.
How to Qualify Leads in Sales?
Budget, Authority, Need, and Timeframe, or BANT, is arguably the most well-known certification process. This approach was first created by IBM in the 1950s, therefore it has a long history. It gets right to the point:
- Does this potential client have the funds?
- Do they possess the power to render a judgement?
- Do they require what I’m offering?
- When will the implementation take place, exactly? (Or should they first not be included in the pipeline?)
For any firm, we believe the BANT methodology is a good place to start. This common model is best suited for products at the assimilation end of the adoption curve because these products’ customers often budget and plan for the kind of purchase in question.
Yet another popular framework known as the MEDDIC technique was created in the 1990s by PTC, an enterprise software provider. It offers a multi-layered strategy for buyer qualification. In order to select the most winning accounts, MEDDIC relies on salespeople gathering comprehensive discovery information about a company’s internal needs and operations.
Drive More SQLs and SQOs For More Conversions
An efficient sales function should have a solid sales pipeline. And the first line of defense in generating revenue is sales.
By defining your overall criteria for Sales Qualified Leads you will be able to find prospects who need to be a priority, provide a more individualized user experience, and close more sales.
Aligning sales and marketing while also defining SQOs and SQLs is a wonderful place to start. Start prospecting now!
Check out some of our sales strategies if you need more assistance generating leads.