What Are Product Qualified Leads (PQLs)?
Product activity as a compass to identify high intent leads
Marketing teams have been using arbitrary metrics like email opens, ebook downloads, blog subscriptions, and so on to gauge purchase intent for a couple of decades now. The B2B SaaS industry has gone through significant changes during this period.
- The product-led growth movement in B2B SaaS lowered the product entry barriers for users. The chances of a prospect using your product before spending time on your website are high. Traditional MQLs do not take product experience into consideration for qualifying a lead.
- The cost of acquisition (CAC) of a customer skyrocketed in the past few years. Chasing quantitative metrics like the number of ad clicks, website visits, etc., costs a lot more than it did in the past because of increased competition in the SaaS space.
In short, we need a better way of identifying purchase intent.
Product qualified leads (PQLs) are the customers and users that show higher intent of buying after experiencing value from your product.
The concept of PQL is still in its nascent stages and marketing teams across industries are adopting slightly different versions of the definition. But, the core concept remains the same — using product activity signals to qualify a lead.
This does not mean ditching marketing qualified leads (MQLs) completely. Many marketing teams in product-led growth companies use the MQL model for quantitative goals (number of website visits to sign-ups) and PQLs to identify qualitative goals (average LTV per user). The challenge is in identifying the PQLs.
Product qualified leads are subjective to your product and business. Consider these guidelines to figure out your PQLs:
- One thing that you can re-use from the MQL model is the Ideal Customer Profile (ICP). Your most valuable leads still fit into your well-researched ICP.
- Work with Product, Sales, and Customer Success teams to understand and identify the events that can be your product users’ aha! moments or steps that are valuable to a user.
- Follow the user journey till conversion and identify how many value metrics they hit along the journey. For example, logging into the product more than 5 times a week, inviting at least 2 teammates to use the product, or creating 5 new projects in a month.
As your product matures and the user database expands, check your product analytics data periodically to understand changes in the usage patterns and refine your PQLs.
Identifying the right product qualified leads is crucial for your growth and can also give you a huge competitive advantage. Once you identify the right triggers in the conversion path, all you have to do is nudge them with the relevant message.
Running marketing campaigns at scale to PQLs and alerting your internal teams about a hand-raiser user is super-simplified with Inflection. Request a demo to find out how.