Touchpoints 08.03.2023

Defining Product-Qualified Accounts: Why You Can’t Just Stick to PQLs

Product-qualified leads are a great starting point for a PLG company. The next phase is qualifying entire accounts.

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You're likely familiar with the concept of product-led growth (PLG), a modern SaaS approach to selling that relies on your product to drive user acquisition, activation, retention, and expansion.

This method has evolved from traditional enterprise sales, where sales reps qualify and close deals with sales-qualified leads (SQLs).

The problem with SQLs is that they have a low conversion rate - just 13% according to HubSpot.

In contrast, product-led sales is all about attracting and retaining users by providing them with a great product experience, one that results in product-qualified leads (PQLs).

So, what is a PQL?

Simply put, it’s a lead that has demonstrated a high level of interest in your product by engaging with it in a way that indicates they’re likely to become a paying customer.

Unlike SQLs and marketing qualified leads (MQLs), PQLs have already shown a certain level of product engagement or usage, making them more likely to convert into paying customers.

If you’ve been tracking and engaging with these actionable leads in your sales funnel, you might enjoy a 20 - 25% conversion rate.

We're now expanding the concept of and strategy for product-qualified leads (PQLs). But we also want to familiarize you with product-qualified accounts (PQAs) and why they're crucial for the product-led sales process.

We’ll build on our PQL playbook by taking an actionable interest in PQAs.

If you want to understand what a PQA is, apply said PQL conditions across an entire company of interest.

Obviously, it’s not that simple, and we’ll get into more detail later.

We’ll discuss the differences between PQAs and PQLs and how you can bring both definitions together in your sales funnel.

Understanding the three types of customers in a PLG business

Sure, you already have your broad customer segments down, but the user classification process is a bit tighter in the PLG world.

Given the difficulty of today’s non-sequential selling, it's crucial to define your potential customers as standard customers, relevant accounts, or ideal customer profile (ICP) relevant accounts.

Now that the customer journey is roundabout, it’s essential that you identify and prioritize potential customers based on their strategic value and likelihood to monetize.

By defining these categories, you can:

  • Allocate your resources more effectively.
  • Focus your efforts on the most promising opportunities.
  • Maximize your chances of success.

Not only that, but defining these categories also helps your sales team tailor their outreach strategies and messaging to specific customer segments, increasing the likelihood of engagement and conversion.

You can drive revenue growth and achieve your goals by providing a roadmap for your sales team to navigate the complexities of modern SaaS sales. So don't overlook the importance of defining your potential customers; start identifying and prioritizing them today.

The first important distinction is between standard customers and relevant accounts.

1. Standard customers

Standard customers are your free users who may not be monetization candidates but still have strategic value.

They may be valuable because they provide feedback on your product, spread the word about the company, or serve as influencers in their industry. While they may not be generating revenue for your company directly, they’re still important to engage with and nurture.

Standard customers’ value might not be self-evident, or need a bit of time to activate. Keep tabs on these potential expansion revenue opportunities.

Focusing on PQLs also sheds a lot of dead weight for all your teams. reports that teams that dodge poor-fit accounts enjoy a 30% reduction in wasted nurturing efforts.

2. Relevant accounts

On the other hand, relevant accounts are your prime monetization candidates, either through self-serve options or sales-assisted opportunities.

These user groups have demonstrated a strong level of engagement with your product and are likely to become paying customers. They’ve found their “Aha moment” and are ready for a sales conversation.

It's important to identify and prioritize these accounts in your sales process.

3. ICP-relevant accounts

These are your most relevant leads with superb customer fit. They’re also the foundation for identifying your product-qualified accounts (PQAs).

By focusing on ICP-relevant accounts, and the key metrics you use to qualify them, your sales team can prioritize large, related groups of active users throughout your engagement strategy.

Given your star customers’ high potential buying intent, they’re most likely to be successful in the long run and maximize your company's revenue potential.

We’re talking about a 30% boost in the value of your current accounts.

Just don’t get too confident in your currently defined product behaviors. The product events that translate into real buying intent can change over time, a process your customer success teams will happily tell you all about.

Breyta can help you set PQA thresholds and monitor the continuous evolution of your PQA model and product-led growth strategy in general.

You can maximize your success in the product-led sales process by staying on top of these signals and using them to guide your sales outreach.

Remember, the key to success is the continuous evolution and refinement of your approach, so always look for ways to improve and optimize your sales process.

What are product-qualified accounts?

So, we know that PQAs are among your most successful customers.

According to a survey by SalesHacker, 61% of companies that use PQLs reported that they have seen an increase in revenue as a result.

But what does that mean in terms of sales qualification? How do you pick these wonders out of your actual users?

The place of PQAs in your business model is similar to that of PQLs, only on a larger scale. You’re qualifying entire accounts based on their product engagement.

This means that the account, rather than just the individual user, is qualified for product-led revenue.

They redirect your sales and CS teams to focus on accounts that are more likely to become high-value customers.

Your product is the PQA engine’s fuel

Since your product drives user acquisition and retention, identifying and qualifying leads based on their product engagement allows your sales and marketing teams to focus their efforts on leads that are more likely to convert.

This saves time and resources and results in higher conversion rates in your freemium model and better customer retention.

Slack, a great example of PQAs in action, reported that 40% of its revenue came from high-value accounts in 2021.

This success is a testament to the effectiveness of the PQAs strategy. By qualifying entire accounts for product-led revenue, Slack increased its revenue per user and expanded its customer base.

Slack's progress has inspired other SaaS companies to follow suit and qualify entire accounts for product-led revenue.

The evolution of the product-qualified model

Like anything in your product-led system, your PQA definition and its place in your annual revenue keep changing.

PQAs are continuous scores based on product signals, not just a gate to pass through.

Your product teams must constantly stay on top of the user experience.

Breyta Configure Customer Fit Score dashboard

And don’t forget about the product usage data they analyze to determine which accounts display the most telling product actions - those most likely to become paying customers.

Monitoring the development of the PQA model provides an almost prophetic power to your sales organization. This foresight is essential for maintaining proactivity in the SaaS sales process.

Continually update your qualification process

As for your revenue teams, they must rotate the PQA model periodically to ensure that it is still effective and accurate.

You can do this through qualitative and quantitative analysis of the PQA data.

For example, your revenue team could analyze the characteristics of high-value accounts to determine what makes them more likely to convert.

You can track this series of actions using Breyta’s customer journey and recent activity. Now you’re identifying the key components of success during product adoption, to be added to your essential metric list.

This information can then be used to adjust your PQA model and ensure that it is still effective in identifying high-value accounts.

The importance of the PQA model cannot be overstated

It helps your sales teams predict the propensity of an account to become a sales opportunity, which in turn allows them to prioritize their outreach efforts.

When an account scores above the PQA threshold, your sales should reach out quickly with a relevant opening line. This helps you establish a connection with the potential customer and begin the sales process on the right foot.

How to capture and convert product-qualified accounts

Let’s expand on what we mean by a PQA threshold. To achieve this benchmark, your company needs to set the scoring parameters that turn an account into a prime sales target once reached.

This threshold is determined by analyzing your various product signals.

To help with this process, you can use Breyta to consolidate the identification and scoring of potential customers.

Launch your flagship PQA sales process

With Breyta, you can set a PQA threshold based on your company's specific criteria, which can help you prioritize sales efforts and maximize conversion rates.

Breyta dashboard showing different companies and their customer fit and user engagement scores

As a sales leader in the SaaS industry, you know that identifying the right product-qualified accounts is crucial for success. And that's where Breyta comes in.

We've optimized our platform to be a PQL and PQA relationship manager, focused on the three key metrics that comprise this special user base:

  • First, we analyze customer fit to identify accounts that match your ICP. Breyta uses firmographic metrics to help you quickly evaluate whether an account has the right characteristics to fit your product well.
  • Next, we track user engagement to understand the success of your product. Our platform allows you to monitor the number of active users, signups, and activity levels. The more engaged your users are, the more likely your product will succeed.
  • Finally, we measure purchase intent to identify accounts interested in purchasing. Breyta helps you track buying readiness, such as when someone visits your pricing page or actively reaches out to sales.

Once you've identified your star accounts, you can create your PQA list in Breyta.

Keep tabs on your tailored VIP list

Our dashboard makes it easy to see who the most active and engaged users are in each account. This way, you can segment and activate your leads based on their qualifications and outcomes needed from your various teams.

It's important to note that PQAs are not static but continuous scores that need monitoring.

Your sales teams should keep an eye on the PQA score and reach out to potential customers when the score exceeds the threshold.

When reaching out, the reasons for the PQA score should be used as the primary opening line to make the conversation relevant.

Even if your sales teams don't close a deal at first, they should continue to monitor the PQA score and reach out again when it exceeds the threshold again.

This approach ensures that your sales teams are focusing their efforts on potential customers who are most likely to convert into paying customers and helps to streamline the sales process.

Start qualifying your accounts properly

You might have noticed “the product-led growth approach” has become a buzzword in recent years.

But beyond the hype is a highly rewarding system that uses your product to drive user acquisition, activation, retention, and expansion.

PQAs play a crucial role in the product-led sales process, and you need to set a PQA threshold to identify prime sales targets. Using Breyta, you can continuously monitor and update the PQA score of your accounts to identify and reach out to accounts that score above the threshold quickly.

Breyta account metrics with customer health score and custome fit

Remember that PQAs aren’t static, and your PQA model should evolve continuously for maximum predictability and sales success.

Your revenue teams must occasionally rotate the PQA model and use qualitative and quantitative analysis to identify your optimal PQA threshold and product signals.

By doing this, you can focus your efforts on accounts that are more likely to convert, save time and resources, and ultimately increase conversion rates and enjoy better customer retention.

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