Real SaaS Metrics: The Changing Role of MQLs and SQLs in RevOps

July 19, 2019 Kristi Park

We’re about to say some bold things in this post; things that challenge some pretty long-held beliefs about which metrics are truly important when you’re measuring the success of your teams and working to grow your revenue. As we all know, there are a set of tacitly agreed-upon ways to gauge the merit of any go-to-market initiative.

Vanity metrics, such as open and click-through rates or pipeline created, are the ones that work to validate the existence of and roles within those teams. Yes, they show a type of progress or momentum, but when your ultimate goal is revenue, these metrics all fall short. In other words, they may assure stakeholders that you’re on your way to creating the desired impact, but they don’t quite paint a full picture. 

 
MQLs and SQLs are a great example of this. They are important, of course, as far as what they represent; however, companies often make the mistake of seeing MQLs and SQLs as definitive indicators of progress. Using them as a way to judge whether or not your sales and marketing teams are doing their jobs effectively is a good recipe for unnecessary friction between the two. There is no magic number of MQLs that will ensure the best leads, and no number of SQLs that will guarantee a closed sale. So, until you reach that finish line, butting heads over the details in between seems counterproductive. 
 
Recently, our CEO, Jason, was a guest on the SaaStr Podcast with Harry Stebbings. They briefly touched on the subject of vanity metrics, and the redundancy presented by MQLs and SQLs, particularly when it comes to efforts such as ABM. This is because, in a perfect world, your sales and marketing teams should be collaborating on things like account selection and lead scoring, which means that any leads moving into the sales funnel would be qualified by definition. 
 
When it comes to vanity metrics in general, our advice is to push them to the side. Because they are realistically no more than vehicles for validation, these types of metrics are better replaced with indicators of real revenue impact, such as conversion rates, funnel acceleration, and increased LTV. However, if your organization has just made this transition to RevOps and being aligned around revenue, know that measuring success this way won’t happen overnight. For this reason, it can be helpful to keep your secondary KPIs on the back burner, to make sure you’re moving in the right direction. 
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