At what point, exactly, should your marketing team hand off a lead to the sales team?

If you don’t know, or if there’s any confusion around when the lead should be transferred, you’re likely losing out on a healthy amount of potential revenue.

The point of transfer between marketing and sales is time-sensitive, and it can have a big impact on whether a lead eventually becomes a customer. Put another way — time kills leads. 

If leads are transferred to sales too early, the sales team will waste their time with prospects who aren’t ready to buy and haven’t been fully vetted. If leads are transferred to sales too late, the odds of losing leads to more timely competitors increase dramatically.

That’s why your entire team needs to work together to decide exactly when the handoff should happen. The criteria for the point of transfer should be revisited frequently, too, because your sales funnel requirements will need to adapt to meet the changing needs of your company as you grow and expand over time.

In this article, we’ll explain exactly how to optimize the handoff from marketing to sales by:

  • Getting clear on terms and definitions in the sales funnel
  • Defining the exact requirements for the handoff to sales
  • Paying careful attention to the “handshake phase” between stages
  • Clarifying how leads enter the funnel in the first place
  • Analyzing and refining the criteria over time

First, Get Clear on Sales Funnel Terms

As we wrote in our post How to Measure the Success of RevOps at your Company, it’s important that everyone on your team is on the same page about the terms and definitions used throughout revenue-generating functions and processes. 

For example, the term “lead” generally means something different to the sales department than it does to the marketing department. That’s why many customer-facing teams, including ours at Chargify, use more specific terms to specify which type of leads we’re referencing. 

Of course, each business will have its own definitions for sales funnel stages. Your team will have to decide on the terms and criteria that make the most sense to you. 

But for many SaaS companies, “lead” stages are defined in the following ways:

  • Marketing Accepted Lead (MAL) – These leads show more promise than a generic lead. Maybe they have interacted personally with your content online and submitted an email address or phone number via your website as a result, for example. 
  • Marketing Qualified Lead (MQL) – Marketing leads tend to be considered “qualified” when they indicate that they’re especially interested in the product. Perhaps they fill out a longer form in order to download a certain lead magnet, or even make a demo request. In general, these leads are considered “ready” for sales in that they have passed a certain threshold of interest in your product and are well-educated about your offering.
  • Sales Accepted Lead (SAL) – These are the MQLs that the sales team has vetted and deemed ready for further sales attention.
  • Sales Qualified Lead (SQL) – The sales team has qualified these leads via a phone conversation or email interaction. They have determined that they are ready for direct, personal attention from an experienced member of the sales organization. These leads are ready to officially enter the sales process.

Define SQL Handoff Requirements 

Sales reps know that timing is crucial when it comes to landing new customers.

According to Salesforce’s “State of Sales” report, 76% of sales professionals surveyed considered timing to have “an extreme or substantial impact on converting a prospect to a customer.” 

MQL to SQL

(Image source)

To get that timing right, your sales and marketing teams need to identify the criteria that indicate readiness for the sales process.

Of course, these criteria will vary based on your specific business needs. However, many of the same criteria are applicable for SaaS businesses of all shapes and sizes. Here are a few that we use at Chargify to identify the leads that are ready for the sales process:

  • Ideal job titles – In some cases, only the people in certain positions will have decision-making power when it comes to making an actual purchase. For example, it’s not uncommon for employees in admin roles to do initial research. Although their role is important and you need to engage with them, some companies may decide that a lead isn’t ready to transfer until someone at the CEO or VP level is involved. (Of course, depending on your product, the admin staff might be exactly who you want to target. It all depends on your target personas.)  
  • Vertical Markets – If you’ve done a good job defining your ideal customers and markets, you’ll know exactly which verticals are the sweet spot for your product. Although there can be exceptions, it’s generally safer to transfer leads to the sales department if the prospective company operates in one of the verticals your product specifically solves for. 
  • Geographies – Some locations simply make it easier for your team to reach out to clients and work with them personally. This can be crucial if you’re offering a physical or regionally-specific product or service. 
  • Existing tech stacks – If you’re selling software, the platforms that it integrates with and works well with can be big factors for sales readiness. Ensure that integrations the prospect requires are ones that you can support. Similarly, if the prospect is using legacy technology that does not operate effectively alongside yours, you will need to clarify their willingness to migrate to a more updated solution. If there is no sense of urgency to move, it might not be the right time to move them through to the next stage.
  • Level of engagement – Stepping up engagement on a lead prematurely can do some serious damage to the relationship — not to mention waste your sales team’s time. You can determine when a prospect is “ready” for the next level of engagement from your team by monitoring their interactions with your brand — website, emails, content, etc.
  • Company revenue or employee count – Even if an MQL seems to fit all the other criteria in terms of engagement levels, vertical market and job title, they may not be quite ready for your software if their company isn’t generating enough revenue. If you know that they have a customer base, revenue number or company size that’s smaller than your ideal client, there’s no need to rush them into the sales process. 
Free download: How SaaS Companies Can Use the BANT Method to Qualify Leads

Don’t Overlook “Sales Accepted Lead” Status

Oftentimes, the Sales Accepted Lead stage is overlooked in the sales funnel.

This is the stage between MQL and SQL. It’s what we refer to as a “handshake stage.” During the SAL stage, the sales team can take a closer look at leads to assess their true quality.

There will inevitably be the occasional false positive in the sales funnel. Some leads that seem like they should be passed on to sales based on set criteria might not actually be a good fit. Other high-quality leads that haven’t qualified for SQL based on existing criteria might be held back due to internal operational challenges or data irregularities. 

Ideally, leads will only be in SAL status for a very short time. After being reviewed, likely by sales development reps (SDR), these leads will be moved along to become SQLs or reverted to MQLs.

Our process looks a lot like this: 

MQL to SQL

(Image source)

Clarify the Criteria for Qualifying Marketing Leads

So far, this post has been about the criteria for qualifying sales leads. 

But there certainly can’t be any qualified sales leads at the bottom of the funnel if there aren’t also qualified marketing leads at the top of the funnel.

That’s why the sales team needs to be involved with helping the marketing department qualify their leads, too. Sales can even work with marketing to help develop messaging that emphasizes the use cases and functionalities that they know from experience appeal to ideal prospects. (Support can help with this, too. Learn how in our recent post about why support should be involved in the sales process.)

Don’t miss: How SaaS Companies Can Use the BANT Method to Qualify Leads

We’ve talked a lot in our blog about the importance of the alignment of the sales and marketing departments (and the customer support department, too, for that matter).

This alignment is absolutely crucial in the qualification stage of the funnel. If there’s any disconnect between targeting, marketing qualification and sales qualification, the entire value chain is compromised. 

Analyze, Refine, Repeat

Of course, all of the decisions about your funnel advancement criteria should be based on a shared standard of how you’ll measure success — at each stage and overall. And although subscription numbers, customer growth metrics and conversion rates are all important, the ultimate measure of success should always come back to revenue.

The ultimate measure of success should always come back to revenue. Click To Tweet

In order to understand which factors should trigger leads to move from one stage to the next, you need to first understand which customers actually add the most value (revenue) to your business over the long-term. (Learn more here: Understanding Customer Lifetime Value and Acquisition Cost).

The characteristics of the most valuable customers will certainly evolve over time. So, the requirements for each stage of the sales funnel process also warrant regular monitoring and continuous improvement.

It helps if your marketing and sales teams have close working relationships and can iron out the nuances of these details and refine the criteria together. This happens naturally when you’ve made a conscious, concerted effort to align the work of all of your revenue-facing functions.

Stay tuned to the Chargify blog as we continue to explore what true, revenue-focused alignment means for SaaS companies.