What is an SQO?
A Sales Qualified Opportunity (SQO) is an active sales opportunity that has been qualified and entered into your sales pipeline with a realistic chance of closing. It's a confirmed deal worth pursuing.
Unlike a lead (a person or company), an opportunity represents a specific potential deal with defined value, timeline, and path to purchase. The SQO designation means this opportunity has passed qualification and deserves active selling effort.
SQO is a pipeline stage and a critical metric for sales forecasting and resource allocation.
Why SQO Matters
Pipeline Management:
- SQOs are the "real deals" in your pipeline
- They form the basis for accurate forecasting
- They deserve rep focus and attention
- Helps prioritize sales efforts
- Ensures time spent on winnable deals
- Guides capacity planning
- Shows true sales effectiveness
- Measures conversion from qualified opportunities
- Indicates rep and team productivity
- Predictable revenue from active opportunities
- Visibility into near-term revenue
- Indicator of sales team quality
SQO vs SQL vs Lead
Understanding the progression:
Lead: A person or company that might buy
- Has contact information
- Fits some basic criteria
- Not yet qualified
- Confirmed fit and need
- Qualified by sales
- Not yet a specific opportunity
- Specific opportunity with value
- Clear path identified
- Active selling in progress
SQO Qualification Criteria
Clear Opportunity:
- Specific problem identified
- Solution fit confirmed
- Value proposition understood
- Competitive position known
- Deal size estimated
- Budget range identified
- Pricing parameters clear
- Procurement process known
- Economic buyer identified
- Key stakeholders known
- Access or path to access confirmed
- Champion identified (if complex)
- Buying timeline established
- Decision process understood
- Key milestones identified
- Next steps defined
- Prospect is responsive
- Meetings happening
- Information flowing
- Mutual commitment to process
Benchmarks
SQL to SQO Conversion:
- Average: 30-50%
- Top performers: 60-70%
- Indicates qualification and discovery quality
- Overall: 15-40%
- Depends heavily on deal size and complexity
- SMB: 30-50%
- Enterprise: 10-25%
- SMB: 14-30 days
- Mid-market: 30-60 days
- Enterprise: 60-180+ days
- Should equal 1.5-2x your quota for healthy coverage
- More SQOs + higher close rate = revenue growth
Best Practices
1. Strict SQO Criteria
- Don't promote weak opportunities
- Clear stage definitions required
- Reps must justify SQO status
2. Regular Pipeline Review
- Review SQOs weekly as team
- Assess progress and health
- Remove stagnant opportunities
3. Forecast Accuracy
- Weight SQOs by close probability
- Update based on actual history
- Learn from forecast variance
4. Focus on Win Rate
- Track SQO-to-win conversion
- Analyze lost SQOs for patterns
- Improve qualification to improve win rate
5. Coach to Opportunity
- Strategy sessions on key SQOs
- Observe reps in live opportunities
- Share best practices across team
Common Mistakes
- Premature SQO - Promoting leads before real qualification
- Pipeline bloating - Too many low-quality SQOs clogging pipeline
- Neglected SQOs - Having opportunities but no activity
- Stale SQOs - Keeping old deals that won't close
- No next steps - SQOs without clear path forward
Key Takeaways
- An SQO is a qualified, active opportunity in your pipeline
- Requires clear opportunity, economics, access, timeline, and engagement
- SQL to SQO conversion: 30-50% typical
- Maintain strict SQO criteria to keep pipeline clean
- Review SQOs weekly and coach to specific opportunities
- Focus on SQO-to-win rate as a key performance metric
- Clean pipeline = accurate forecasting = better execution
Related Terms
SAL (Sales Accepted Lead)
Lead accepted by sales for qualification. Bridge between MQL and SQL.
Sales Cadence
Structured sequence of touchpoints over time.
Sales Champion
Internal advocate promoting your solution. Key to enterprise deals.
Sales Cycle
Time from first contact to closed deal. Varies by deal size.
