Product-led growth has made it clear that not all leads are created equal.
In a sea of potential customers, it's essential to differentiate between those who are genuinely interested in your product and simply browsing.
That's where product-qualified leads (PQLs) come in.
PQLs are potential buyers who have shown a strong interest in your product and have already engaged with it meaningfully. These leads have provided you and your sales rep with valuable information and are more likely to close a deal than other leads.
These prospects have demonstrated a high level of interest in your product, based on specific criteria such as product usage, engagement, and behaviors.
By focusing your attention on PQLs, you can increase the efficiency and effectiveness of your sales process, and drive more revenue for your business.
Your PQLs are at the core of your product-led sales model, and your entire selling strategy should revolve around converting them.
New to PLG? Catch up on the basics of product-qualified leads before you take a deep dive into how to make the most out of your leads.
Now, we want to provide you with a practical and effective strategy for making the most out of PQLs.
You want everyone to be happy with your PQLs, including your revenue teams. We’ll provide you with strategies and tips to convert as many PQLs as possible into paying customers.
Before you get set up with a PQL playbook, let’s recap what they are.
What is a PQL?
The rise of product-led growth has created a specific type of lead, with each user experiencing a unique customer journey.
You might be using your Ideal Customer Profile (ICP) as a filter, but what about user intent, conversion rates, and product usage insights?
A PQL is like a VIP ticket to your company's success.
Many think of PQLs as being pre-screened and ready to rock. Sure, many are already sold on your product and just need a gentle nudge to close.
Sadly, converting your best-fit customer isn’t always as simple unless your product is supremely popular. Customer acquisition always takes a lot of work, and you need to get your hands dirty.
Regardless, focusing on PQLs lets you prioritize your sales efforts and increase your chances of making a sale.
PQL vs. PQA: what is the difference?
PQLs (Product Qualified Leads) focus on individual leads that exhibit specific behaviors and engagement indicating their potential as customers.
On the other hand, PQAs (Product Qualified Accounts) provide a broader perspective by evaluating overall fit, product usage signals, and engagement of an entire account.
While PQLs are a starting point in product-led growth (PLG) companies, PQAs are a level-up.
It's worth noting that PQA product usage signals are dynamic and require periodic rotation to ensure their relevance and accuracy. This is important to maintain the effectiveness of PQA models.
The role of product usage in determining PQLs
Out of all your key metrics, product usage data is the most critical factor in determining PQLs. By tracking how leads interact with your product, you can identify those most likely to convert.
We spoke to Ryan Nutley, the Director of Sales Engineering at Datadog, who shared his three key values of a PQL.
Firstly, we look at things like daily active logins. Is the person treating your product in a sticky way? Are they using it regularly? That increases the likelihood that they're getting value from us. You may have different features or functionality that the customer is using. That's always a very good indicator that they're well spread across the platform. The third indicator I look at is the consumption of those features.
Ryan Nutley, Director of Sales Engineering at Datadog.
Once you’re invested in your user behavior, you and your product team can start picking out conversion points.
Conversion points in your SaaS product's usage refer to specific actions or milestones your user reaches, indicating a higher likelihood of converting into a paying customer.
These exciting insights on product usage show that your user is engaged with your product, understands its value, and is likelier to purchase.
Examples of conversion points in a SaaS product's usage include:
- Free-to-paid: When a free user decides they want to pay for your full product.
- Onboarding completion: Your user completes the initial setup process and regularly works with your product.
- Feature adoption: Your user has found particularly high value in one of your features.
- Usage frequency: The number of times your user accesses or interacts with the product over a given period.
- Integration with other tools: Your user integrates your product with other tools in their tech stack.
- Updating account information: Your user updates their account information, such as billing or contact details.
There are also CS-related conversion points, such as expansions and land and expand opportunities.
How to identify conversion points
In our conversation with Ryan Nutley, we also asked him how to figure out your conversion points.
Ryan’s a fan of using a tool like Intercom to get a bird’s eye view of your product usage and map out your hotspots. But he recommends supplementing product analytics with more traditional methods.
You can't really beat the customer interview. If you ever have a chance to listen to a customer directly, or even just cold outreach with a random set of people, you’ll understand why they dropped off something or why they continue to use it. I think human interviews give you a much better idea of where people realize value.
Ryan Nutley, Director of Sales Engineering at Datadog.
It’s that combination of analytics and human interest that gives sales leaders like Ryan a complete view of the customer journey.
A progression that Ryan advises needs to be watched carefully. The customer journey isn’t static, regardless of how well you capture it. It can change on a dime, so be ready to adjust your strategies accordingly.
On the topic of agility, segmenting your conversion process makes a world of difference to your sales efficiency.
One-on-one attention per conversion point
It’s all quite a lot to track, even for just an individual user, we know. But one of the worst things you can do in the sales cycle is cast your sales net across as many conversion points as possible.
Remember that each conversion point needs its own strategy, which sometimes doesn’t translate well to another event.
The best kind of sales leadership is systematic, measured, and patient.
We all want sky-high success metrics and a glowing company profile, but “success” can easily become a vanity metric.
Leading product specialists know that starting small and nailing each conversion point is the key to success in PQL workflows.
The best product-led GTM teams and their sales playbooks start with one conversion event and work their way up. They build on each successful step creating a winning product experience.
If you're just starting with product-led sales (PLS), chances are you have a pool of potential leads waiting to be tapped. Start with the low-hanging fruit and focus on the "free-to-paid" conversion event.
And, once you've got that figured out, you can move on to the next conversion point, like the "free trial to paid customer" event.
Expansion opportunities are like puzzle pieces. When you slot them all together in your business model, they create a beautiful picture of a successful PQL strategy.
How to build strong relationships with PQLs
Regarding PQLs, what you put in is what you get out.
PQLs aren’t your standard sales-qualified leads (SQLs) They’ve shown a high commitment and enthusiasm for your product and deserve equal care.
Sales-qualified leads are scored with generic markers and dealt with using boilerplate strategies. This all worked back in the day, but the customer has become far more unique
So, forget about generic sales emails - you won’t get much out of that VIP’s email address with a clearly automated outbound motion.
Let’s build long-lasting friendships with your PQLs and start earning product-led revenue.
Personalize your sales outreach
Personalization is key in forming relationships with PQLs. There are plenty of non-obvious signals and softer metrics you might have overlooked when you segment PQLs.
Gone are the days of generic sales pitches and one-size-fits-all approaches. Today's PQLs are savvy and want to feel like they're being heard.
Tailoring your sales approach to each individual lead is crucial. Take the time to learn about their specific needs and concerns, and adjust your pitch accordingly.
Show PQLs that you care about their business and are genuinely interested in helping them succeed.
When Drift was just starting out, their sales team would extensively research each lead before reaching out.
This strategy is perfectly appropriate when you consider the kind of value Drift provides its customers.
They’d take the time to learn about the lead’s business, pain points, and goals, and then craft a personalized sales email that addressed these specific concerns.
This genuine expression of care builds trust sky-high, fostering the critical confidence you need for conversion.
Listen to the customer's needs
Just as important as personalizing your sales approach is appreciating the customer's needs.
Building a strong relationship with PQLs means understanding their business objectives, pain points, and buying criteria.
Take the time to ask questions and actively listen to the answers.
Beyond your human and professional empathy, you should also have a sales meeting recording software highlighting pain points, opportunities, and other actionable insights.
Doing so will provide a more targeted solution and increase the chances of converting your product-qualified lead into a paying customer.
Let’s take Intercom’s early days, for example.
The business messaging powerhouse’s sales team spent hours on the phone with each lead digesting their needs.
This investment not only helped Intercom better understand the lead's business. It helped Intercom reps build trust and rapport with the lead. By the end of the call, the lead felt like Intercom truly cared about their business and was there to help.
Today, Intercom enjoys an annual growth of about 30%, hitting the $100M ARR benchmark quicker than most SaaS companies.
How to manage your PQLs
You know what you’re looking for in PQLs
And even if you haven’t got a proper lead scoring system, you have a rough idea of who falls into the PQL ballpark.
What now? Do you simply send your product-qualified user base over to your customer success team?
Or, should your marketing teams send automated email sequences and let your rate of customer acquisition cook for a bit?
Maybe you just want to pull the sales trigger and close as much additional revenue as possible, quickly.
We’ll get you started with your PQL playbook builder in a minute, but first, you’ll need a PQL HQ.
The PQL launch pad for all your active teams
We’ve optimized Breyta to become a PQL relationship manager, focusing on the three key metrics that make up this special base of users:
- Customer Fit: When it comes to leads, it's important to find those that are relevant to your Ideal Customer Profile (ICP). Firmographic metrics can help you identify if a lead has the right characteristics to be a good fit for your product.
- User Engagement: Gauge the success of your product by tracking the number of active users, signups, and activity levels. The more engaged your users are, the more successful your product is likely to be.
- Purchase Intent: When a lead demonstrates buying readiness, it's a good sign that they're interested in making a purchase.
You can appreciate this last behavior when people visit your pricing page or actively reach out to sales. Measuring purchase intent is a key indicator of a lead's level of interest in your product.
Once you’ve put your Triforce together, you’re ready to create your first PQL list.
Your entire company gets access to pivotal insights like who is the most active and engaged users are in each account.
And that’s when you decide who needs to work on what.
How to organize and activate your leads
Segmenting leads lets you order your workflows and strategies.
While you must identify your PQLs - those that are generally a great customer fit and display high buying intent, don’t forget about the leads that might become PQLs one day with the right nurturing.
To that extent, we recommend creating four signal lists within Breyta, each with its own qualifications and required outcomes from your various teams.
You’ll know which PQLs could use some warming up with marketing deliverables, who’s ready for a sales call, and quickly welcome the glowing enterprise customer that’s virtually asking for CS.
But first, ensure your customer fit is watertight for the most accurate ICP-driven qualifications possible.
Let’s define them.
Marketing for potential PQLs
Don’t send leads over to your salespeople if they aren’t a good ICP fit and haven’t engaged with your product properly. Rather, these leads should be marketing’s targets.
This is your chance to nurture said leads with all your existing marketing resources, hoping they’ll come to and display the right commitments and fit.
Keep the emails flowing and play the long game.
You can simply let them go if they don’t turn out to be diamonds in the rough.
Marketing or SDRs for high product usage, poor fit leads
Ever had a highly committed user to your product who’s unfortunately not part of your ICP?
For example, you reviewed their greater business and found their firmographic details wanting. They’re just too tiny to warrant a full-scale sales venture.
Don’t ignore them. This account could eventually grow to your ideal PQL or product-qualified account (PQA).
Remember that accounts are often directly connected to others. Ones that might be more in line with your business needs; something SDRs or BDRs excel at establishing.
If you don’t find associated opportunities but feel this quickly growing account will bloom into your desired clientele, then let marketing build and maintain a relationship with them until they’re sales-ready.
You can also use Breyta to occasionally refresh your enrichment data, say once a quarter. Enroll this account on a nurturing campaign, and if you see they’ve met your standards in the near future, it’s time for a sales call.
Sales-assist for good fit, low product usage leads
Here’s another common situation in the SaaS sales world you might be familiar with.
You’ve found a glowing ICP candidate, but they haven’t checked the product usage box.
How do you motivate them to get stuck into your product?
Enter sales-assist, one of our favorite new types of salespeople that we discussed in our previous inbound sales piece.
There might be several blockers in your onboarding process that are stopping this otherwise perfect potential customer. That’s where sales-assist reps come in. They’ll work closely with a lead to open up the customer journey and become proper PQLs.
If you don’t specifically have a sales-assist rep, then your growth teams will do just fine.
AEs for fully-fledged PQLs
These are your top-tier PQLs that are the closest to converting. The kind of lead that lights fires in your AEs’ hearts.
But don’t get too excited. You’ll still need to do some homework to close these quintessential PQLs.
Let’s go.
The definitive PQL playbook
As a sales leader in the SaaS industry, you know how important it is to convert your most committed users into paying customers.
You know PQLs are likely to make a purchase, but they’re not going to close on their own.
Converting PQLs into customers isn’t as straightforward as some believe. It requires a well-thought-out and personalized approach that considers each individual's needs and goals.
This PQL playbook will guide you through a step-by-step process for converting your PQLs into paying customers.
Step 1: Identify your PQLs
We’ve already covered this part, but you need to know who your product-qualified leads are. These individuals who have engaged with your product, showed interest in your solution, and are likely to make a purchase.
You can identify these leads by analyzing how they use your product and tracking their behavior through your marketing and sales funnel.
Once you have a clear picture of who your PQLs are, you can engage them more effectively.
Step 2: Build strong relationships with PQLs
The next step is to build a strong relationship with your PQLs. This can be achieved by consistently providing them with valuable content, offering them personalized support, and reaching out to them regularly.
Keep in mind that the goal is to develop a relationship of trust, not just to close a sale.
Focusing on potential customers’ needs and goals can create a win-win situation where they feel confident in purchasing from your company.
Ensure your customer service team isn’t relying on email templates and monitor your user activity.
Step 3: Use data to personalize engagement
In today's data-driven world, personalization is key to success. You can use data to understand what resonates with each individual PQL and tailor your engagement accordingly.
For example, you can analyze which pieces of content they are most interested in, what stages of the funnel they tend to drop off, and how they respond to different types of messaging.
Step 4: Provide customized demos and trials
A customized demo or trial can be a powerful tool in converting a PQL into a paying customer.
Offering a tailored experience showcases the specific features and benefits relevant to your users’ needs, increasing the chances of closing the sale.
Ensure that your customer experience team is equipped to provide a personalized demo or trial and that they have the necessary information about the PQL to make it effective.
Step 5: Offer additional resources and support
As you move closer to closing the sale, it's important to continue to provide value to your PQLs.
Offer additional resources, such as e-books, webinars, and case studies, to help them make a more informed decision.
People can only do so much in an automated way. With any product that anybody uses, they’ll be limited by what they see and what they know. When you start building the relationship with them from a sales point of view, you're in an educating mode. You're showing them things to help them. That’s a huge part of the business relationship.
Ryan Nutley, Director of Sales Engineering at Datadog.
Additionally, make sure that you have a robust support system in place, so that PQLs feel confident that they will receive the help they need after they make a purchase.
Step 6: Close the sale with confidence
By the time you reach this step, your PQLs should clearly understand the value your product can bring to their business.
Be confident in your value proposition and communicate it clearly and effectively.
Show the PQLs how your product will help them achieve their goals and make their lives easier.
Use social proof, such as customer testimonials, to reinforce your product's value and build trust.
Remember to focus on building relationships, personalizing engagement, and providing value at every stage of the sales process. Good luck!
Quire frequently after demos people are interested in trying out Breyta or even just the idea of PLS but they don’t know where to start. They know how to connect product data but don’t know what do next.
They offer this framework and you can divide prospects into several categories and explain what to do.
Serve your PQLs the secret sales sauce
It’s no secret that the key to a product-led growth strategy is converting product-qualified leads into paying customers.
But what’s a bit more mysterious is which levers you need to pull to make this complex machine work.
It's all about tracking and analyzing your product usage data to find those PQLs and pinpoint the key conversion points in your SaaS journey.
Remember to use a combination of analytics tools and customer interviews to map it all out.
Don't forget to give each step of the conversion process some TLC with personalized attention.
Breyta is the linchpin that organizes all these processes and resources. We want you to streamline all of your efforts and strategies, nailing every product-qualified opportunity.