9 min read  | Customer acquisition

Kill the MQL: The shortcomings of the lead generation waterfall

The lead generation waterfall model was promised to be a formula for growth that leverages gated content, lead nurturing and lead scoring to predictably convert visitors into leads, and leads into sales-qualified leads and customers.

In reality, this is an old-school mentality that drives poor performance, wastes a big portion of the marketing budget, creates many inefficiencies for your sales team, and results in a poor user experience for buyers.

You have probably seen some variations of the illustration below. Since the mid-2000s, companies have been using the lead generation waterfall where the goal is to attract qualified traffic with content, convert those visitors into contacts with a gated content offer, then nurture those leads into becoming customers.



The big problem with the lead generation waterfall model is the marketing qualified lead (MQL).

Most companies invest a lot of time and money into generating MQLs that never is followed up with sales because MQLs more than often lack buying intent, authority, and budget. 

While the calculations look great on paper, most companies will likely see much worse results and waste a lot of budget on low-quality MQLs:


Ask yourself:

Do you want 1000 marketing qualified leads (MQLs) who downloaded an ebook from your website, or do you rather want to optimize your sales and marketing to generate 250 sales accepted opportunities that have shown real intent to buy?

My suggestion is to throw away the conventional approach to lead generation. In this article, you will learn about the major shortcomings of the lead generation waterfall.

Then I am going to suggest a better way to acquire more customers for companies like yours who have long sales cycles, complex products and services, and a sales process where multiple decision-makers are involved in a purchase decision.

You will learn about:


There is never a single person buying in B2B

A major shortcoming of the lead generation waterfall model is that it does not take into account that there is never one single person who is buying in a B2B buying process. While the lead generation waterfall and the sales process is a nice straight line, the buying process is non-linear and messy.


One of the main reasons for the low conversion rate from MQL to Customer is also that an MQL will often be an influencer who does not have any decision-making power.

Most likely there is a committee of buyers consisting of influencers, decision-makers, budget holders, blockers, or champions who are involved whom all do their independent research. To make things even more complicated is that this research is not necessarily done on your website.

In other words, you are selling to buying committees within accounts, not individuals. Most CRM systems do not measure the relationship between individuals and accounts, and will consequently show you conversion rates for individual contacts.

Unfortunately, this does not give you an accurate view of the progression of how effective your marketing is or how your pipeline is doing.

One of the big promises of marketing automation platforms is that you will be able to track and measure everything. However, measuring MQLs will result in having an inaccurate view of the sale, and cause misalignment between sales and marketing.

If you optimize your marketing for people who neither have the intent or authority to buy from you, you end up with a long list of useless leads in your CRM.

While you can definitely see what touchpoints one contact in a company has had with your articles, landing pages, or forms, you usually cannot measure how other decision-makers in the same company are behaving and engaging in their own research.

When multiple decision-makers are involved in researching and considering your product, you risk investing too much time and money into generating contacts who do not have the power to make a buying decision.

While one contact might fill out a form or visit your pricing page, you need to realize that this is only one of many touchpoints in the buying process.

When selling complex products and services to other businesses, you need a more targeted approach to get a more accurate picture of the effectiveness of your marketing strategy.

Instead of focusing on just individuals doing their research on their website, you need to influence multiple people in the buying committee, see who has had any touchpoints with your business, and which buying roles and decision-makers are missing.

By removing the MQL as a goal, marketing can become better aligned with sales by focusing on goals that are closer to the sale such as sales qualified opportunities, revenue generated from inbound channels, account coverage, and sales cycle length.


MQLs creates inefficiencies when growing

When using the MQL as a KPI, you risk creating many inefficiencies for your sales and marketing teams. Especially companies who are growing quickly and following the lead generation waterfall model will experience that when the revenue goal is doubled, the quality of MQLs will go down, resulting in a decrease in MQL to Customer conversion rate.


There are a finite number of companies buying a solution like yours at any given time. If you need to “feed the machine” with more MQLs to grow, you will generally need to go broader in your targeting, make your lead scoring less strict, and target companies who have not shown any intent to buy in the foreseeable future.

At some point, you will see diminishing returns and lower conversion rates from MQL to Opportunity and Customer. This means that your first 1000 MQLs will convert the best. The next 1000 MQLs will then convert at a lower rate, and the next 1000 even lower.

This results in many inefficiencies, as salespeople who are told to follow up with MQLs spend a lot of their time with contacts that are not ready to buy. There is no magic sequence of emails that will fix this problem and suddenly make your contacts more qualified.

Salespeople hate following up MQLs because they generally convert poorly into meetings and customers. With the focus on MQLs, sales do a lot of activities that make them look very productive, but in reality, they are just busy with work that does not lead to more revenue.

Instead, simplify your strategy by splitting your audience into two segments:

  • Those who are ready to buy and who have for example requested a demo
  • Those who are not ready to buy, and who needs more educational content


Instead of focusing on getting more downloads for an ebook, marketers should be optimizing for more sales opportunities and revenue.

The remaining budget should be spent on building brand awareness and educational content. People at this stage should not be followed up by a salesperson until they have shown any buying intent.

This approach is better aligned with the sales department and the overall goal of the business where the main focus is on generating more revenue.

By optimizing your marketing efforts around revenue, you might start paying more per lead and receive fewer inbound leads than before, but the overall lead quality will be much higher, and the total marketing spend will be lower and less wasteful.


People do not want to be treated as an MQL

Not only does the MQL drive poor results for your company, but it will also give potential customers a bad experience and can lead to a negative perception of your company. Just think about some of the negative touchpoints a potential customer goes through with this model:

  • Seeing a “cold” ad from a company that is promoting content on Facebook or LinkedIn, then get sent to a poorly optimized landing page with a long-form and horrible user experience (especially on mobile devices).
  • After filling out the form, you’re sent to a thank you page with a link to a PDF with generic and disappointing content that gives you a poor experience both on mobile and desktop.
  • Receiving a lead nurturing email over several weeks or more while being called by a salesperson within 1 hour even if you just wanted the information in the offer.


While you might be successful with generating a lot of contacts for your contact database (not actual leads with an intent to buy), it is likely not leading to increased revenue.

If you observe how you buy products or services, both privately and professionally, you probably do not buy as a result of the process described above. Buyers hate this process, and as a result, the lead generation waterfall has become less effective for companies who are trying to grow.


Unclear definitions of what an MQL is

Another major shortcoming of the lead generation waterfall model is that most companies have a very broad definition of what an MQL is. This can lead to poor prioritization of leads, inconsistent follow-up, and a lacking hand-off process from marketing to sales.

What is truly an MQL? Is it someone who downloaded an ebook? Is it someone who registered for an event? Is it someone that opened up three emails and then was scored high enough to be converted into an MQL by a marketing automation platform?

It is simpler to define a sales-qualified opportunity (SQO). By defining your ideal client profile (ICP) by using demographic and firmographic data, then decide on what actions you want them to take on your website (such as “Request a demo” or “Request pricing”), it is very clear who has an intent to buy.


There is a better way

You do not need to overcomplicate your marketing.

Marketers and technology vendors love to make things harder than necessary. In reality, you can get great results by following some simple principles:

1. Get very clear on your ideal client profile (ICP). What criteria for revenue, location, industry etc. define the companies you want to have as customers? Who is the buying committee in these companies?

2. Drop the MQL as a KPI. Have both sales and marketing focus on KPIs close to revenue such as a number of inbound opportunities, revenue from inbound channels, sales cycle length, and account coverage. Also, use some simple engagement metrics to track if your ICP is consuming your content.

3. Have a simple website that is optimized for those who are ready to buy, and which makes it easy for them to request a demo of your product.

4. Map out a plan for the content you think your ICP will find interesting. Do not waste too much time creating personas. By creating a steady stream of text, video, and audio content, you will find out more quickly what content people within your ICP care about.

5. Un-gate existing gated content to reduce friction in the buying process, then optimize your existing content for consumption and awareness building. Repurpose white papers and ebooks into pillar pages, blog posts, or social media content.

6. Distribute content with targeted advertising on Facebook and other advertising channels. A steady stream of content will build brand awareness and educate your target market, and it can be very cheap to reach a bigger audience quickly.

7. Make sure that you are capturing the demand for people who are searching for your brand. Build out simple PPC campaigns for Google Ads and Bing to bring searchers to your "bottom of the funnel" pages such as your product page when they are ready to learn more about your company and product.

You can summarise this approach in one sentence: Be ready when they are ready. The lead generation waterfall is overcomplicated and inefficient.

Focus on building value and trust without expecting to get anything back from your marketing. By committing to this approach, you might see the number of inbound leads goes down and the cost per lead go up, but your total marketing spend will go down and the number of sales-qualified leads will increase.