Product Qualified Leads: The What, The Why, The How

You’re trying to find customers for your SaaS product—and customers start as leads. You can qualify those leads with firmographics or interest (and become a slave to vanity metrics), or you can qualify them based on how much value they find in your product. Before you jump in, ask yourself: am I ready to use product-qualified leads? You’ll need to reformat your data so everything is account-based. Figure out what your “first value” actions are (and track them using Activation and Product Engagement). Decide if and when users should self-serve their way to paid instead of bringing your sales team in to convert them. Most of all, you’ll need to change your growth strategy and mindset.

Skip this one if:

You're not a SaaS business

The big value here:

Sherlock’s ebook guides you through the basics of setting up PQL strategy. A step-by-step playbook coaches you on managing your new PQLs, and details which approach to take based on product complexity and account size.

Key terms:

Activation Criteria:

Checkpoints measuring how far along a customer is in their onboarding journey. The end goal is for them to hit first value and have an aha moment (enter the PQL concept).

Engagement Scoring:

A measurement over time tracking what user actions within the product. They’ll derive more and less value from different actions, and by weighting them, you’ll be able to quantify engagement.

What are product-qualified leads?

PQLs fall along a spectrum with MQLs (marketing) and SQLs (sales). If you moved left to right from least qualified leads to most qualified, you’d get MQL → SQL → PQL. 

Product-qualified leads aren’t just people who hit your ideal customer profile or seem interested in your offerings. They have literally used your product for free (through a freemium version or trial)

And they’ve found some value in it.  The tricky part is maneuvering them to the value they’ll pay for and stay for.

How can my company use a PQL model?

A PQL isn’t just a user who signed up and logged in a couple of times. It’s an account who is highly engaged or has hit first value.

To find those PQLs, you need to harness your user data and product data. Specifically, you need to understand, track, and set benchmarks for how engaged users are.

Use automated processes to push new self-service accounts through activation. Accounts that fulfill your activation criteria get ranked by their engagement score. Then comes the fun part: manual intervention. Time to reach out.

Pro Tip: Your activation criteria should be specific and detailed.

Your PQL-Conversion Playbook

This entire playbook depends on two factors

Product Complexity:

Is your product simple, complex, or intermediate? As a SaaS business, you’ve probably already figured this out. But consider how easy or difficult it is for users to self-serve their way to first value. 

Account Size:

How badly do you want to close this deal? How much revenue will it offer? You don’t need an ebook to tell you what a huge opportunity is.

The Big Ideas on Conversion

The more complex the product, the sooner your Sales or Customer Success team should intervene. Your users will need help, and may not be hitting first value themselves. 

The bigger the deal, the less you want to leave that account hanging by playing hard to get. Reach out sooner rather than later.

When and how to manually reach out (based on your product complexity)

Simple Product (7+ out of 10 users can self-serve to first value)

Small deal

Mid-size deal

Large deal

Intermediate Product (4-7 out of 10 users can self-serve to first value)

Small deal

Mid-size deal

Large deal

Complex Product (<4 users can self-serve to first value)

Small deal

Mid-size deal

Large deal

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