Quick Summary

Your sales reports are only as good as the definitions behind them. Without clear, agreed-upon definitions of what constitutes a qualified lead versus an opportunity, your team can't accurately measure performance, optimize marketing channels, or forecast revenue. This article shows you how to establish foundational definitions that make your sales data meaningful and actionable.

Why Definitions Matter More Than You Think

Imagine asking your sales manager "How many leads did we get last month?" and getting the answer "247." Sounds good, right? But what if 150 of those "leads" were just company names your reps saw on LinkedIn, 50 were unqualified trade show badge scans, and only 47 were actual prospects who wanted to talk to you?

Without clear definitions, you're measuring noise, not signal.

Here's what happens when definitions are unclear:

Marketing thinks they're crushing it because they generated 500 "leads" from a trade show. Sales thinks marketing is useless because only 3 of those 500 were worth calling. Nobody's wrong—they're just using different definitions of "lead."

Your forecast is unreliable because one rep creates opportunities the moment someone shows slight interest, while another only creates them when the deal is 90% done. Your pipeline looks healthy, but half of it is fantasy.

You can't optimize because you don't know which marketing channels actually work. Did that €10K Google Ads campaign generate qualified prospects or just website visitors who downloaded a brochure?

The solution isn't complex tools or advanced analytics. It's simply agreeing on what words mean, then using them consistently in Salesforce.

Key Definitions for Sales Success

To make your sales process measurable and optimizable, you need clear definitions for two critical concepts: Marketing Qualified Lead (MQL) and Sales Qualified Lead (SQL).

Marketing Qualified Lead (MQL)

An MQL is a prospect who has expressed interest in your product or service and provided their contact information, indicating they're open to a conversation.

The Definition We Recommend:

An MQL is someone who:

  1. Provided contact details (phone number or email)
  2. Gave us their name (not just a company name)
  3. Expressed willingness to talk about our product or service

This is the threshold for entering Salesforce as a Lead. If a prospect meets these criteria, they deserve a record in your CRM and a follow-up call from sales.

What IS an MQL:

✅ Website form submission - Prospect filled out "Request a Quote" or "Contact Us" with their phone and email
✅ Inbound call to sales line - Prospect called your sales number asking about your products
✅ Partner referral - Business partner sends you contact details and says "This company is interested"
✅ Trade show conversation - Prospect stopped at your booth, had a conversation, and asked to be contacted
✅ Direct email inquiry - Prospect emailed your sales team with questions

What is NOT an MQL:

❌ Company name spotted in the wild - Sales rep sees "ABC Manufacturing" on a building and adds it to their list
❌ Purchased contact database - You bought a list of 1,000 companies from a data vendor
❌ Trade show attendee list - Badge scan of everyone who walked past your booth (without conversation)
❌ LinkedIn connection - Someone accepted your connection request but hasn't expressed interest
❌ Website visitor - Anonymous traffic to your website with no contact information provided
❌ Social media follower - Someone follows your company page but hasn't reached out

Why This Distinction Matters:

If you call the first group "leads" and the second group "leads," your conversion metrics become meaningless.

Say you have 100 website form submissions (MQLs) and 500 purchased database records (not MQLs). If you call all 600 "leads" and only 15 convert to customers, your lead-to-customer rate is 2.5%. Marketing looks bad.

But if you only count the 100 MQLs, and 15 of them convert, your MQL-to-customer rate is 15%. Now you have meaningful data: website forms are working, purchased lists might not be worth it.

The MQL Agreement: Marketing and Sales Alignment

The MQL definition should be a formal agreement between marketing and sales, documented and reviewed quarterly. This is not a marketing decision or a sales decision—it's a joint commitment.

How to Establish Your MQL Definition:

  1. Workshop with both teams - Get marketing and sales leadership in a room
  2. Review historical data - Look at the last 100 leads that converted to customers. What did they have in common at the point of first contact?
  3. Define the threshold - What's the minimum qualification that makes a prospect worth sales time?
  4. Document it - Write it down clearly, with examples of what is and isn't an MQL
  5. Enforce it in Salesforce - Create a Lead Source picklist and validation rules so only MQLs enter the system
  6. Review quarterly - As your business evolves, your MQL definition might need adjustment

Sales Qualified Lead (SQL)

While an MQL indicates interest, an SQL indicates readiness to buy. This is where sales does their job—vetting the prospect to determine if pursuing them makes business sense.

My favorite SQL Definition:

An SQL is a lead that meets all of the following criteria:

  1. Clear Intent to Purchase - Actively seeking a solution, not just browsing
  2. Confirmed Need - Has a specific problem your product solves
  3. Budget Availability - Has allocated funds or realistic ability to pay
  4. Decision Maker Involvement - You're speaking with someone who can say yes
  5. Realistic Timeline - Planning to buy within a reasonable timeframe (e.g., 1-18 months)
  6. Good Fit - The prospect matches your ideal customer profile (right size, location, industry, etc.)

Not every MQL becomes an SQL. In fact, most don't. A good sales rep's job is to quickly identify SQLs among their MQLs and focus energy there.

The Lead Qualification Process:

  1. MQL enters Salesforce as a Lead
  2. Sales rep contacts the MQL within 24-48 hours
  3. Sales rep qualifies the MQL by asking discovery questions
  4. If qualified as SQL, convert the Lead - this creates three records simultaneously:
    1. Account (the company)
    2. Contact (the person you're speaking with)
    3. Opportunity (the specific deal you're pursuing)
  5. If not qualified, mark as "Disqualified" with reason

This follows Salesforce's standard conversion model. Once a Lead becomes an SQL, it's converted and the sales rep works the Opportunity through your sales stages to close.

This process creates a funnel you can measure:

  • MQLs generated (marketing metric)
  • MQL-to-SQL conversion rate (sales effectiveness metric)
  • SQL-to-Customer conversion rate (sales closing effectiveness metric)

Why These Definitions Are Critical

With clear MQL and SQL definitions, you unlock powerful capabilities:

1. Accurate Performance Tracking

You can now answer questions like:

  • How many qualified prospects (MQLs) did we generate this quarter?
  • What percentage of MQLs become SQLs? (If it's low, sales isn't qualifying properly, or marketing is sending poor-quality leads)
  • What percentage of SQLs close? (If it's low, sales is qualifying poorly, or your solution doesn't match market needs)

2. Marketing Channel Optimization

When every lead source follows the MQL definition, you can compare apples to apples:

Now you can make data-driven decisions: "Partner referrals convert at 50% and cost us €90 per customer. Paid ads convert at 3% and cost €1,200 per customer. Let's invest more in partner relationships."

3. Better Sales Forecasting

When Opportunities only exist for SQLs (not just any interested party), your pipeline becomes reliable. You can forecast based on historical SQL-to-close rates rather than guessing.

4. Improved Marketing and Sales Collaboration

No more finger-pointing. Marketing owns MQL volume and quality. Sales owns MQL-to-SQL conversion. Both teams are accountable for their piece, and both can see the data.

Implementing This in Salesforce

Here's how to put these definitions into practice:

Step 1: Configure Lead Sources

Create a picklist on the Lead object called "Lead Source" with values that align with your MQL definition:

Valid Lead Sources (MQLs):

  • Website - Contact Form
  • Website - Quote Request
  • Inbound Phone Call
  • Partner Referral
  • Trade Show - Qualified Conversation
  • Webinar Registration
  • Event Attendance
  • Email Inquiry

Invalid for Direct Lead Creation:

  • Purchased List (these should go through a nurture campaign first)
  • Prospecting Activity (create a separate object or use a different system)
  • Social Media Follow (not enough to qualify as MQL)

Make "Lead Source" a required field. Train your team that if a prospect doesn't fit one of these categories, they shouldn't be in Salesforce yet.

Step 2: Add Lead Status Values

Update your Lead Status picklist to reflect your qualification process:

  • New - MQL just entered the system, not yet contacted
  • Contacted - Sales rep has reached out but not yet qualified
  • Qualified (SQL) - Meets SQL criteria, ready to convert to Opportunity
  • Disqualified - Does not meet SQL criteria, will not be converted
  • Nurture - Has potential but not ready yet, put in marketing automation

Step 2b: Create Disqualification Reason Field

Add a custom picklist field called "Disqualification Reason" that becomes required when Lead Status = "Disqualified":

  • No Need - Doesn't have a problem we solve
  • No Budget - Can't afford our solution
  • No Timeline - Not buying anytime soon
  • Bad Fit - Wrong industry, location, size, etc.
  • Competitor Chosen - Selected another vendor
  • No Response - Multiple contact attempts, no reply
  • Not Decision Maker - Can't reach actual decision maker
  • Duplicate - Already exists in system

This structure keeps your Lead Status clean while allowing detailed tracking of why leads don't convert. You can then report on disqualification reasons to identify patterns (e.g., "80% of paid ad leads are disqualified for 'No Budget' - maybe we need better targeting").

Step 3: Create Conversion Rules

Establish a rule: Only convert Leads with Status = "Qualified (SQL)" to Account, Contact, and Opportunity.

When you convert a Lead in Salesforce, the system:

  1. Creates an Account record (or links to existing if company already exists)
  2. Creates a Contact record with the person's details
  3. Creates an Opportunity record representing the deal
  4. Archives the original Lead record (it's no longer needed)

This standard Salesforce conversion model ensures all your qualified prospects move into your primary CRM structure where you can manage the sales process.

Step 4: Build Your Conversion Dashboard

Create a dashboard that tracks the funnel:

Key Reports:

Report 1: MQL Volume by Source

  • Shows how many MQLs each marketing channel generated this month/quarter
  • Grouped by Lead Source
  • Filter: Created Date = This Quarter

Report 2: MQL-to-SQL Conversion Rate

  • Shows what percentage of MQLs became SQLs
  • Formula: (Leads with Status = Qualified) / (Total Leads Created) * 100
  • Grouped by Lead Source to see which channels produce best-quality MQLs
  • Grouped by Lead Owner to see which reps are qualifying effectively

Report 3: SQL-to-Opportunity Conversion

  • Shows what percentage of qualified leads (SQLs) were actually converted to Opportunities
  • Formula: (Converted Leads with Status = Qualified) / (Total Leads with Status = Qualified) * 100
  • This should be close to 100% if your process is being followed correctly
  • If it's lower, it means reps are marking Leads as "Qualified" but not converting them - a process violation

Report 4: Opportunity Win Rate

  • Shows what percentage of Opportunities close successfully
  • Grouped by Lead Source to see which channels produce deals that actually close

Report 5: Full Funnel View

  • Combined report showing: MQLs → SQLs → Opportunities → Closed Won
  • Conversion rate at each stage
  • Average time at each stage% converted - good!) 

This dashboard tells a clear story: Partner referrals are your best channel (high conversion, high win rate), while paid ads need work (low conversion, low win rate). You now have data to act on.

What About Prospecting Lists?

You might be wondering: "What if my sales reps want to proactively reach out to companies they've researched? Where do those go?"

Short answer: Not into Salesforce as Leads, at least not yet.

Here's why: If your rep adds 100 company names from a prospecting list into Salesforce as "Leads," and only 5 of them respond, your metrics get polluted. It looks like you have terrible lead quality, when really you're mixing proactive prospecting (cold outreach) with inbound MQLs (warm interest).

Better approaches:

  • Use a separate object for "Prospects" or "Target Accounts"
  • Keep prospecting lists in a different tool (like a spreadsheet or prospecting app) until someone responds
  • Create a Campaign in Salesforce for outbound prospecting, and only convert responding contacts to Leads

This topic deserves its own article (coming soon), but the key principle is: keep your MQL metrics clean by not mixing cold prospecting with warm inbound leads.

How to Establish Your Definitions

Here's a practical process for getting your team aligned:

Week 1: Discovery

  • Interview 3-5 sales reps: "What makes a good lead versus a waste of time?"
  • Interview marketing team: "How do we define a qualified prospect today?"
  • Pull data: Look at the last 50 Opportunities that closed. What did they look like as Leads?

Week 2: Draft Definitions

  • Write first draft of MQL definition
  • Write first draft of SQL criteria
  • Share with stakeholders for feedback

Week 3: Workshop

  • Facilitate a 2-hour session with marketing and sales leadership
  • Present draft definitions
  • Discuss and refine based on feedback
  • Get formal agreement

Week 4: Document and Communicate

  • Create a one-page reference document with clear examples
  • Update Salesforce fields and picklists
  • Train the sales team on the new process
  • Set up dashboards and reports

Ongoing: Review and Refine

  • Monthly: Check if reps are following the process
  • Quarterly: Review conversion rates and adjust definitions if needed
  • Annually: Major review of all definitions

Common Mistakes to Avoid

Mistake 1: Definitions Too Strict If your MQL bar is too high, marketing can't hit targets and sales doesn't get enough pipeline. Balance is key.

Mistake 2: Definitions Too Loose If anything with a pulse counts as an MQL, sales wastes time on junk leads and metrics become meaningless.

Mistake 3: Sales Bypassing the Process If sales reps create Opportunities directly (without first creating and converting a qualified Lead), you lose tracking of your funnel. Every Opportunity should originate from a converted SQL Lead so you can measure the full MQL → SQL → Opportunity → Customer journey.

Mistake 4: Never Reviewing What qualified as an MQL last year might not be right for this year as your business evolves. Review quarterly.

Mistake 5: Not Enforcing Consistently If some reps follow the definitions and others don't, your data is inconsistent and your reports are unreliable.

Final Thoughts

Clear definitions are the foundation of effective sales operations. Without them, you're flying blind—making decisions based on incomplete or misleading data.

The good news? You don't need expensive software or complex analytics. You just need marketing and sales to agree on what words mean, document those definitions, and use them consistently in Salesforce.

Start with MQL and SQL. Define them based on your business reality, not generic best practices. Get both teams aligned, implement the definitions in Salesforce, and build dashboards that make the funnel visible.

Once you have clean data flowing through a well-defined funnel, everything else becomes easier: forecasting, channel optimization, team accountability, and strategic decision-making.

Your sales numbers will finally mean something. And that's when you can start improving them.