MQLs vs HQLs – Valuing, Pricing, and Deciding Which One to Buy?

Marketing qualified lead (MQL) refers to prospects who engage with the content of a brand’s marketing department. The MQL’s behavior (such as giving their contact details in exchange for a whitepaper download) indicates that they are a qualified lead and ready to speak to sales.

An example of low-quality leads would be thousands of contacts that show no interest in hearing from your company. Sales teams may also judge leads to be of low quality if they lack any of the characteristics commonly found in SQLs.

However, not all poor-quality leads are useless. In time, with the right care, these leads can blossom into solid prospects.

Since most businesses in the business-to-business sector do not have unlimited marketing budgets, it is crucial to focus on leads that will generate a positive return on investment. However, many marketers make the mistake of blindly supporting all leads for which they generate resources.

How much of your marketing budget should go toward various lead types is the subject of this article.

What is the difference between MQL and HQL?

Leads of high quality indicate an interest in making a purchase. They’re keen to get in touch with the sales staff and close the deal.

As a general rule, HQL refers to those with ultimate authority. They’ve thought long and hard about their issues, and they’ve concluded that your product (or service) is the best answer.

These leads are aware that, shortly, failure to resolve the issue will be a detriment. To put it another way, they have the cash on hand to pay for the goods and services. In addition, they are prepared to talk to the B2B sales force.

Even if HQLs consider you a credible merchant, that doesn’t mean they’ll purchase from you. To truly “wow” each lead, you’ll need to put in some effort. They differ from everyone else, however, in that they are much closer to making a final purchasing decision.

It is important to note that Marketing Qualified Leads are ranked lower than Sales Qualified Leads because it is not guaranteed that they will need to take your relationship further after demonstrating interest to purchase through activities such as downloading, adding items to the cart, clicking an ad, or requesting more data. You should assist them through advertising strategies such as content partnerships until they are ready to hear more. They can stay hot in this state until they become HQLs.

The goal of any B2B marketer is to maximize the return on investment for any lead generation efforts their company undertakes. Finding the return on investment for digital marketing campaigns is difficult for most businesses.

Eighty percent of marketers have trouble providing evidence of the success of their strategies, according to surveys. To overcome this obstacle, sales and marketing groups must define measurable ROI and establish a system for doing so.

Here are three easy ways for B2B marketers to determine the value of their lead generation efforts:

1. Define Customer Lifetime Value

CLV measures the average profit made by a customer throughout their relationship with your company. In this case, the CLV per customer is $12,000 ($200 * 60 months) based on a 5-year customer life cycle.

B2B marketers can find a variety of useful online resources for determining CLV. One of them is Kissmetrics, whose logo you can see down below. This software provides B2B marketers with a comprehensive revenue report that includes information such as estimated CLV, total revenues generated over specified periods, and daily churn rate.

2. Measure Cost of Customer Acquisition (CoCA)

What a business must spend to gain a new client is what is meant by “Cost of Customer Acquisition.” When calculating the return on investment for lead generation, this metric is crucial because it tells marketers how effective their marketing and conversion strategy is.

A common benchmark for allocating resources toward customer acquisition in most businesses is 10% of the customer’s total lifetime value. With this in mind, the acquisition price in the preceding example would be $1,200 (10% * $12,000). It’s recommended that startups allocate a larger portion of their budgets to this purpose.

3. Determine How Many Customers You’ll Need to Break Even

It is recommended that at least 10% of a company’s marketing budget be devoted to generating leads. All content creation and distribution channels, as well as other lead generation activities, are typically included in the budget.

If your annual marketing budget is $500,000, then $50,000 would be allocated toward lead generation. To calculate return on investment, divide the total amount allocated to lead generation by the customer acquisition cost calculated in Step 2. At that rate, you’d have to divide $50,000 by $1,200, or 25. This implies that acquiring at least 25 new customers is necessary to achieve a positive return on investment.

The Return on Investment (ROI) of your marketing efforts to generate leads is an important metric to track. The term “marketing leads” refers to the potential customers that the marketing department can attract through its online activities. Calculating the ROI of marketing leads requires knowing the closing rate.

MQLs versus HQLs: Which Should You Purchase?

It’s up to B2B marketers to come up with creative ways to bring in potential customers. Utilizing either first- or third-party intent data is one option. First-party intent data refers to the information that a business obtains from its website visitors, social media followers, and email recipients.

Intent data from third parties, such as publishing platforms, media trading platforms, and consumer review sites, are examples of third-party data. However, B2B marketers have to wait for third-party data, which is collected by aggregators from various online sources but is not directly accessible to them.

Several important factors influence the kind of leads a company decides to buy, and thus how much of their B2B marketing budget is allocated to lead generation:

  1. New Product Launches: There needs to be a lot of buzz around new products before they can sell well. A company can have a large database of potential customers to nurture when they buy MQLs in advance of a new product launch.
  2. Product Promotions: Companies can shorten the lead nurturing process by offering discounts or free bonuses with every purchase. To capitalize on rising interest, B2B companies running product promotions have the option of purchasing a combination of MQLs and HQLs and increasing spending during promotions.
  3. Changes in Key Personnel: To avoid missing out on business opportunities due to a change in leadership, B2B companies can purchase data for HQLs.
  4. Internal Budget Changes: Due to rising levels of competition, businesses need to reduce their operational expenses. It can be expensive in these situations to invest in a marketing team equipped to pursue high-quality leads. Purchasing leads and delegating the work of closing them to salespeople can reduce costs.
  5. Business Seasons: Some months are better than others for businesses, and this variation is typical. For instance, the holiday season may be a busy time for some companies. When demand is high, B2B marketers should make HQLs a top priority in their spending. They can shift their attention to MQLs during the off-season.
  6. Competition: B2B marketers who don’t monitor their competitors risk missing out on key strategic developments. If your rivals start actively targeting your customer base, you may find yourself losing out on a lot of business. The purchase of MQLs and HQLs protects you from losing market share to rivals.
  7. Economic, Political, and Natural Factors: The phenomenon is an unavoidable variable. The good news is that businesses can adapt to the unexpected challenges they bring by thinking ahead. Due to the unpredictability of the economy, it may be necessary to purchase both MQLs and HQLs to maintain your company’s profitability.

The process of separating MQLs from HQLs isn’t always as straightforward as it might seem. Mandit Solutions is a great option if you’re having trouble keeping leads engaged throughout the entire sales process. We’d be happy to assist you in resolving any issues you’re having with your lead nurturing process, as inbound marketing and sales are our areas of expertise.

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