What does EQL stand for?
EQL stands for Expansion Qualified Lead. Like its cousin the Product Qualified Lead (PQL), the EQL is a way to qualify a prospect based on both behavioral data from your marketing and product as well firmographic data. The difference between EQL and a PQL is that the former is focused on expansion stages and, as a result, will generally include very different criteria.
What does XQL stand for?
An EQL and an XQL are the same things. As they say, some say to-may-toe and some say to-mah-toe.
Where does an EQL fit into my sales/customer journey stages?
At Variance, we like to think about “Minimum Viable Milestones,” or the most basic data-driven sales stages to support a team. More mature companies and products will likely have more stages with different names, but this is a good starting point:
- Signed Up
- Product Qualified
- Expansion Qualified
The beauty of those five is that they form a straightforward product funnel that should be an excellent place to start for any GTM team.
As you can see, EQL is the final stage in the funnel. While we suggest starting with a single EQL stage, the reality is that EQL is actually a whole journey unto itself and should eventually be treated as such. As opposed to the other Milestones, your EQL should probably account for the Transacted Milestones being complete so that you know an account is actually qualified for expansion and not just showing early traction signs. Once they’ve transacted, you’re generally looking for:
- Team growth
- Usage growth
- New feature/module adoption
Any or all of these can be Milestones along the expansion journey.
What is an example of an EQL/EQL?
On the Variance homepage, we show all our real Milestones, including our EQL. Here’s how we define it:
What does that mean?
- Employee Count: many expansion stages are based on the company’s firmographic data, not just their behavioral data. For us, the size of the expansion opportunity is ultimately a function of the size of the company.
- Milestone Created: defining Milestones like EQL and PQL are central to how Variance works. Therefore, to be qualified for expansion you must have created at least four in the system.
- Invited User: this one is pretty simple. We want to see that you’ve started to bring team members on board.
If you’ve completed these three criteria, an alert goes out to the owner of the account to let them know it’s qualified for expansion and worth spending time with.
Isn’t an EQL just a customer health score?
No. One thing that we feel very strongly about at Variance is that customer health should be kept separate from Milestones. That’s not to say health isn’t something that should be closely monitored, but just that it is something different. Milestones like EQL should be either on or off and shouldn’t really switch back and forth. A company is either qualified to expand or they’re not and health should help guide you on the best moment to start that conversation and how to best attack it.
Customer health and customer milestones are partners in crime. It's not one or the other. How I see it is that customer health tells me that an action needs to be taken, it doesn't tell me what that action can be unless I look at which part of the journey the customer is on. Say, for example, if the customer has not reached their "Aha moment" in the assessment phase and their health is red, I am not going to go in there and say, "hey can you tell me about the past 10 months" and instead I'm going to go in there and I'm going to try to understand where they're getting stuck. Is there a particular page or setting that they're tinkering with for the last three days? Maybe it's an integration that they're trying to figure out. So that's how I see customer health and customer milestones: One tells me they're taking action, the other one is my call to action.
Milestones are letting you know the actions someone has taken and health is going to be more about how active they are in taking them. Like Jean says, one is the actions they’re taking (milestone) and the other is the call to action (health).
Moving to Data-Driven Sales
If all of this sounds good so far, the remaining question is how to start to make the shift to an EQL approach specifically and a more data-driven sales approach more generally. There are three big trends that are sweeping B2B Sales and they will define future leaders of revenue. They could be ignored in boom times, but if they are ignored now, the Senna’s in your category are gonna smoke you.
The three trends:
Let’s take them one at a time.
Using Your Customer Data
You must harness the customer data you have. The plumbing has been laid inside your organization by other departments. You have a data warehouse, a customer data platform, or product analytics tooling that you can get your hands on. If you aren’t selling with customer data you won’t make it.
Question to ask:
- Where is my customer data and how can my team have access to it? How technical is my revenue operations team to start to use this data in the qualification process and expansion motions we are developing?
- How can I get this data in to my Sales/Marketing/Success CRMs and get my sellers trained on how to shape and use this data in their motions?
Expansion is your biggest opportunity you are most likely underinvesting in
If Customer Success owns expansion, it has to roll up to you.
Questions to ask:
- Do my CS reps get comped the same way as my sales team?
- Do the CS reps roll up to me?
- What percentage of my revenue is coming from expansion? What should it be?
- Is my Salesforce instance setup to understand that Closed Won is the start, not the end of the selling process?
Your qualification model must become data driven
Most advanced B2B companies use a version of MEDDIC, a qualification model built in the 90s. A lot has changed and a lot of data can be used to complement the intuition that MEDDIC helps structure.
Questions to ask:
- What is our Product Qualified Lead for our freemium, trial, or enterprise proof of value motion?
- What is our Expansion Qualified Lead so we can drive momentum and upsell with customers?
- Am I ready to cede some control to the prospect if needed in a Proof of Concept (POC) as a way to gather more customer data in a qualifying motion?