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Around ten years ago, SaaS companies focused on marketing qualified leads (MQLs) to attract customers. Marketers would launch paid campaigns and nurture leads before they converted to MQL. They would then forward these leads to the sales team for further intervention.
However, only a small percentage of leads convert into customers. MQLs (marketing-qualified leads) are classified based on their purchasing intent. Factors such as email opens, e-book downloads, and website visits define these leads.
Many of the leads have never experienced the benefits of the product. Any lead forwarded to the sales team must go through several stages before becoming a purchase.
Product-driven growth tests this framework. As a result, SaaS companies deliver more revenue faster.
Instead of focusing on MQL, the product-led growth model engages PQL (product-qualified leads). Product qualified leads have a better chance of converting into end users.
Unlike MQL, product qualified leads help calculate the value of a product through a free trial or subscription model.
This guide will discuss how to create a product qualified lead strategy. It will also explain how product qualified leads can be integrated into your business.
Product qualified leads refer to a prospect who has seen the value of a product in a free trial. However, using a free trial does not mean a user is a product qualified lead.
Before they can be classified as PQLs, the user must navigate various product features and complete specific tasks. There is a vast misconception about product qualified leads. If you choose a product-led growth model, you won’t need marketing.
Marketing is an essential component of a product-led growth strategy. Particularly since users only get a sense of a product’s value when they sign up for a free trial or freemium model.
Most people give up at this point. The first step is one of the most difficult. It starts with knowing how to identify a PQL in the first place. However, defining a PQL is simple. The biggest challenge is understanding what a PQL does for your business.
For example, should a PQL be when someone activates their email or sends 1,000 messages? Should it be when someone completes a critical step in a product or adds a coworker to the platform?
There are several ways to slice and dice what a PQL is for your company. Finding behaviors that are linked to upgrading is what matters.
For some, this is a shifting goalpost as the product develops. The more products and features you have, the more difficult it is to pinpoint which behaviors cause people to upgrade. To truly understand the ideal definition of PQL, you must first know your value metrics.
Most SaaS companies need help defining PQL. This is because there are numerous approaches you can take to identify PQL for your business. As your product matures, the definition of product qualified leads changes. Your business model changes concurrently.
You must first identify your value metrics to define your PQL clearly. The value metric is essentially what and how much you charge your customers. It is observed that determining value metrics and pricing is more complicated than you think.
Every SaaS company must constantly adjust its definition of PQL. This ensures that end users understand the value of their product. As prospects use your application, they show the possibility of buying. This is based on product behaviors like:
Take the time to learn about your users and what they do on your site. Understand why they wanted to sign up and what goals they hope to achieve. This will make it effortless for you to craft the best message for them.
When it comes to personalization and segmentation, it is critical to ensure that users receive the relevant message.
Collect and learn from various customer data sources to better understand your target customers. If one of your objectives is to increase trial-to-paid conversions, this is a critical step in the process. This level of comprehension is the cornerstone of everything.
Similar to the MQL, how you define a PQL entirely depends on how your business operates. Different companies have different definitions of what makes a loyal customer. Each company needs to have an understanding of what a product qualified lead is.
The most accurate descriptions of qualified leads are based on conversion correlation data. When a PQL has a memorable experience, they become interested in learning more.
As a result, every company should constantly improve the definition of its target PQL. This ensures that it provides meaningful value to its customers.
Here are a few examples of product qualified leads established by well-known SaaS brands.
Each PQL definition above closely relates to your company’s solution for end customers. PQL helps businesses determine which customers are likely to buy.
PQLs close at a much higher rate than MQLs. This is because users recognize the worth of your product. It is common for PQLs to convert at a rate of 20—30% for a company working with B2B SaaS companies.
If your company has established PQL, the next step is implementing systems to generate qualified leads. It is essential to ensure that key metrics are tracked.
This can be done through cross-functional teams like marketing, sales, customer success, and engineering. Below are some key metrics that each team can be held accountable for.
Marketing generates leads for your product’s free trial or freemium model. However, they are more concerned about the number of leads generated rather than the quality of sign-ups.
Two metrics must be prioritized to drive quality sign-ups:
When creating metrics for teams, it is advisable to include both a quantity and a quality metric. This ensures that no team sacrifices quality to meet the quantity metric. Ensure the sign-ups generated are high quality by prioritizing the conversion rate.
Sales assist clients in selecting the right plan for their needs and provide additional assistance. B2B businesses can take it further by calculating the average lifetime value generated per account.
Sales are responsible for influencing the PQL-to-customer rate—quantity metric. Here are two options that I’ve seen work well for B2B SaaS businesses:
The product team must focus on providing end users with a superior experience. Customers will only convert into PQLs if they see the product’s value. Below are key quantity metrics for your business to increase your product output.
Customer success is the process of assisting both users and customers. The team’s key metrics help users achieve a meaningful outcome from the product. Accounts are also expanded through upsells. Some key metrics include:
Engineers are in charge of key metrics related to the product they are working on. They can think of brilliant ways to increase user adoption.
These two metrics help monitor the success of the free trial for the engineering team:
You can always start with just one engineer if your company is small. He will be in charge of influencing these metrics. As your organization grows, you will include more people.
The MVP (minimum viable product) is the most basic version of the product that a company displays to the market. It could be a car, a website, a television, or a laptop. Companies want to gauge the response of prospective consumers by introducing basic versions.
This technique helps them make the final product much better. The research or marketing team will identify the product’s shortcomings using the MVP concept. Additionally, they can identify the benefits and drawbacks. MVP has three distinct features.
The goal is to obtain consumer feedback. This will make it easier to make adjustments to the finished product. MVP runs a test on the usage scenario. As a result, this allows the company to modify the final product.
Let’s look at an example to understand the concept better.
MVP is a well-known concept online. The process involves launching a website to see how consumers react to the product. The product could be consumable, daily-use, or even a service provided by a website.
The idea is to start small and then take cues from users about what they expect. Dropbox, Groupon, Zappos, and others are well-known examples.
Determine the most effective strategy for generating product-qualified leads. Leverage your staff and data to boost growth. Different teams will be assigned to each customer stage.
A section of the group can be dedicated to marketing, sales, and customer satisfaction. The other team can handle products and everything in between.
A single team cannot handle the PQL process. PQLs are viewed as a revenue initiative that drives marketing and sales.
You will, however, need assistance from other teams. This includes engineers, so you have access to accurate product usage data. This information is necessary to start the PQL process.
Start small to build an effective cross-functional team. Come up with original ideas for projects. You’ll find it easier if you’re not taking on someone else’s project.
Start projects that no one is personally invested in. Find a way to gain more resources from other teams.
There are good and bad ways to discuss PQLs with them. You can talk about more high-quality sales leads with lead qualification and product usage data.
As a result, the marketing team can send a more targeted message instead of a generic greeting.
MQLs are generally determined by the sales and marketing teams. On the flip side, the product qualified lead necessitates collaboration from all teams.
PQLs have the advantage of aligning teams to focus on assisting the user in becoming successful with the product.
You will have more successful users and upgrades by using the PQL model.
Pay-per-click(PPC) such as Google Ads campaigns can be used to target PQLs by using keywords and other targeting options to reach users who are likely to be interested in the product or service being advertised.
Additionally, Google Ads can be used to track and measure the effectiveness of PQL campaigns by monitoring metrics such as click-through rates and conversion rates.
Overall, using PQLs and Google Ads campaigns together can be an effective way to reach and convert potential customers. But if you have multiple campaigns you are with limited resources then it will take huge time to analyze your campaigns properly.
You can think of all the aspects of campaigns and can’t decide on time which campaign is working well and which one is not. For that purpose you need to have smart and intelligent tool like PPC Signal.
Here is where PPC Signal comes in. This analysis tool assists you in managing your PPC campaign. It warns you ahead of time if there are any issues with your campaign. As a result, you can address the issues before they deplete your budget.
Assume you’re running a campaign for your online business and want to improve conversions. From the PPC Signal dashboard, choose metrics.
Click on the conversion. You will receive a notification of the status of your conversions via an automatically generated signal. To learn more, you can further evaluate the signal.
Click the Explore button. You will see graphical data about the signal. The data includes how long your conversions have been declining.
You can also see the data in tabular form. The format assists you in narrowing down the other campaign metrics influencing your campaign conversions.
These signals provide information about the performance of your conversions. They show you how your conversions are progressing. They also demonstrate how other campaign metrics influence your conversions.
This can take you a step further. You can accomplish more with less effort. As a result, you achieve better results. These insights allow you to make faster decisions and take steps to avoid blowing your campaign budget.
Product qualified leads refer to a client who has seen the value of a product in a free trial. PQL must navigate various product features and complete specific tasks.
This is the process of attracting, nurturing, and converting leads into paying clients. A company should use every marketing strategy available to improve lead generation.
They should blog regularly, be active online, and create compelling offers. The business can also network and use success stories to attract potential clients.
Leads can be generated in various ways, including paid online and offline advertisements. Among other things, you can use email outreach. The process is relatively simple if you buy leads from third-party portals and may be completed faster.
However, if you choose to use another medium, you must run the process for each method. Each will take its own time, which can be optimized in the future to reduce the lead time involved.
This term, also known as SQL, refers to a potential customer who has been thoroughly investigated. The marketing and sales team then screen the prospect. The customer is then prepared for the next step in the sales process.
The PQL model offers more possibilities than the MQL model.
Product qualified leads (PQLs) convert at a higher rate and generate more revenue. They are routed to sales for further qualification before becoming SQLs.
Creating compelling product qualified leads requires careful planning, execution, and review. It is essential to determine the ideal target customer. In addition, please select the proper channels to reach them. Most importantly, use the most effective messages to engage them.
PQLs serve as the foundation for happier customers. They also lay the base for faster time-to-value and recurring sales. Choosing PQLs over MQLs and SQLs is critical for a product-led growth strategy. Allowing the product to lead the way in customer recruiting and retention ensures long-term sustainability.
By leveraging automation and data, companies can create a strategy that drives leads and conversions. With the right system in place, companies can increase their customer base. This ensures their products are in the hands of their target customers.
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