Accelerate your thought leadership by contributing to our blog. Join our community of experts now!
Instead of MQLs and SQLs, we need to start talking about PQLs or product qualified leads.
Why? Because most companies use only MQLs and SQLs to generate new customers, and according to sales benchmark research conducted by Salesforce, without a proper strategy in place, only 13% of marketing qualified leads become sales qualified, while just 6% of those sales-ready prospects convert to paying customers.
Meanwhile, with PQLs, you can generate not only active and engaged leads that require less effort to close, but also better long-term customers.
Wondering how? Start by taking a deep dive into our guide on PQLs with a focus on implementing PQL benchmarks to improve your sales and marketing efforts.
One of the best ways to learn about product qualified leads (PQLs) is by using examples.
Let’s say there are two customers – Natalie and James – on your website.
Natalie goes to your website, reads a blog post, and downloads an ebook to learn more about the topic.
James signs up for a free trial, watches your onboarding video, and immediately starts picturing how this product can make his business run smoother.
Which person is more likely to turn into a happy, paying customer? It doesn’t take a rocket scientist to guess that James is more likely to turn into a paying customer. After all, he has demonstrated clear interest and intent, and is an example of a product-qualified lead (PQL). On the other hand, Natalie is an example of a marketing qualified lead (MQL).
Product qualified leads are most common in SaaS companies with a freemium plan or a free trial. It is a way to qualify the intent and likelihood of a user turning into a paying customer based on their interactions with your product.
This is different from marketing qualified leads (MQLs) and sales qualified leads (SQLs).
Marketing qualified leads focus on the mainly surface-level interactions that a lead has with your site. For example, this could be reading a blog post, downloading an ebook, signing up for your newsletter, etc.
A sales qualified lead has expressed some additional interest and intent – oftentimes in the form of requesting a demo. And, the sales team has qualified they are likely to fit the ideal customer profile.
Similar to MQLs and SQLs, the most common way to find PQLs is through lead scoring.
However, while all three use lead-scoring, the similarities end there. PQLs are all about understanding not only the type of lead but also identifying the behaviors and interactions they have with the freemium or free trial version of your product.
This is important because not prospects who use free trials are ideal customers. In fact, many are not.
Alex Birkett of Omniscient Digital explains this for us, “The critical piece to figuring out your PQL strategy is mapping out where exactly in your product you identify someone as a “product qualified lead.” To find this moment is a bit of an art and a bit of a science.
Ideally, by this point, you want your user to have experienced value from the product already. Additionally, you want to do some analysis to correlate given behaviors with upgrades or conversions.
This varies widely depending on the product. Facebook, for example, identifying this “aha moment” as the point when a user has added 7 friends. For a CRM, it could be something like the moment you add 10 deals, or when you try to add a teammate to your account. It’s going to depend a lot on the context, but finding where this moment occurs in the product is the most critical task.”
The better you can get at identifying the types of people who will get the most from your product, the more success you’ll have closing deals.
For example, at Databox, the most important PQL metrics are if a freemium user connects three data sources, time spent in the product, how frequently they are using the product, and if they have invited 1-2 more users.
Not sure how important is to prioritize product qualified leads? If you are running a SaaS business, PQLs should be the first on your priority list.
Now when you know all about their importance and how to identify product qualified leads, let’s check out how to turn more of these leads into paying customers.
While PQLs have demonstrated more intent than an MQL, closing the sale still requires work. Here are 9 tips for how you can turn more PQLs into paying and satisfied customers.
If you’re a digital marketer, you know the drill.
If you’re like most marketing teams, you’re doing this multiple times on multiple pages and offers. So how can you assess your landing page engagement as a whole? By looking at Google Analytics 4 metrics and answering questions like:
You could certainly do this by digging through a variety of Google Analytics reports and dashboards, but wouldn’t it be nice to consolidate that information in one dashboard?
Now you can benefit from the experience of our Google Analytics 4 experts, who have put together a great Databox template showing all the most important KPIs for your landing page(s) performance.
It’s simple to implement and start using as a standalone dashboard or in marketing reports, and best of all, it’s free!
You can easily set it up in just a few clicks – no coding required.
To set up this dashboard, follow these 3 simple steps:
Step 1: Get the template
Step 2: Connect your Google Analytics 4 account with Databox.
Step 3: Watch your dashboard populate in seconds.
“The most effective way to generate product qualified leads is through product-specific lead scoring,” says Mike Tatum of SurveyMonkey. “You need to use both data leads along with behavioral data on what content they are interacting with to determine how good of a fit they are for each product.”
“My biggest tip for generating product qualified leads is to give the leads the full picture of your company,” says Irene Dimakides of Megaventory. “Free trials are great, but if a lead gets their hands on your product without any information or guidance, a trial is less likely to lead to purchase. What you do want is for them to experience your company in full, not just the product.
For example, if your company offers great customer support, you want your leads to experience that. If you don’t get to show this to the leads that are testing your free trial, they won’t see the full potential of your product. So, here’s the key: show them how great it would be to work with you. When a lead gets to test the product with the understanding of how your company works, you have a lot more possibility in seeing them turn into a happy, paying client.
At the end of this process, you have the most qualified PQLs you can have. They have not only experienced the product but also the DNA of your company.”
Stuti Dutt of Hootsuite adds, “Free Trials are a great way for the customer to see value in your product. It is really important to optimize this process. The process should be accessible and seamless. Some ways to ensure that are in-product tutorials, knowledge base, and a CX member of your team to make the trial into a successful conversion.” Use this help documentation dashboard to learn about the needs and expectations of your customers and how to adequately cater to them.
Paige Arnof-Fenn of Mavens & Moguls starts off with, “For my business, it is by generating content/speaking/thought leadership. A PQL is not only someone who has used marketing successfully, they also match the characteristics of our target audience/ideal client profile, have experienced the value of marketing, and have expressed the need/buying intent.”
Jonathan Aufray of Growth Hackers Services adds, “To generate product qualified leads, it’s important to bring people into your funnel (from brand awareness to purchase). First, you want to share with people educational, insightful content such as a blog post, an e-book, or a video. See those who interact with your content using a lead generation dashboard. Then, you can retarget the people who engaged with your content by sharing with them your product benefits, testimonials, reviews, and product demos. Now, they will become product qualified leads.”
And here’s a great retargeting tip you can use as shared by Tom Dunlap of Conversion Rate Store, “To generate more PQLs, target a series of 3-7 education videos on YouTube or Facebook and then run a conversion-focused remarketing or lookalike campaigns on users who watched more than 50% of at least one video.
Here are some of the video formats Dunlop suggests testing:
Test a mix of optimization goals that works best for you, but typically this educational video series should be optimized based on actual conversions. Look for CPM cost or number of engaged views.
Users who watched more than 50% of your videos should be added to a separate remarketing list and you can think of them (kind of) the same as an email list. That’s an asset!”
Andrzej Bieda of Landingi opines, “In my opinion, there is no clear-cut recipe for generating the perfect PQL, as customers in each company have different predispositions to buy.
I’d suggest developing the product-oriented strategy where you may think about the following offering:
Product Qualified Leads use the product as a finished element of the sales funnel, as potential customers show great interest in the product.
They just want to test it to make sure the solution is good for them. That “final straw” it is.”
“The most effective method we have used in 2020 to generate product-qualified leads is via a self-liquidating funnel model,” says Jo McKee of McKee Creative.
“Rather than the initial step being a free product, we now set up a low-cost product as the first step within the campaign. It helps people to value the initial offering and also because they have trusted the brand enough to pay once, it makes it easier for them to pay more down the line.
This model of a self-liquidating funnel has definite perks:
Using the product-qualified lead model in 2020, we have seen one campaign’s $27 offer turn into almost $700,000 in sales within four months.
The most successful campaigns we have helped create have high-quality organic engagement in place before they launch a campaign to capitalize on product-qualified leads. This serves to lower cost per acquisition throughout the funnel.”
Wojciech Szywalski of PressPad Apps shares how their company managed to produce more PQLs, “In our SaaS subscription business, it turned out that turning off the visibility of the prices value generated a lot of new leads because people are reaching out to ask about the price of the specified plan. This way, we know what they want, and who they are, so we can provide a more tailored offer.
It really works because the value of the product is perceived through its price. For most of the people who are checking prices online, prices are too high or too low, and they are bouncing out. With the hidden prices, visitors look through the features and those features create the value of the product to them. That perception is not aberrated by its price.
Stefania Borchia of Ubisense shares, “The most effective way of generating PQL is to understand the audience the business is targeting. In combination with the product management team, the marketing team needs to design a message that positions the product as the solution to the audience’s problems, issues, or even fears.
Only by understanding your potential customers and what makes them click, you can deliver a marketing message that resonates with them. It’s never about the features, it’s about the benefits the product offers to the buyer.
Once a message that speaks to the targeted audience has been designed, the only remaining issue is the platform: on which platform – organic, paid, social – can the business find such an audience?
For instance, I recently moved a display campaign from Google Ads to LinkedIn. On Google Ads, I could neither set up the Industry my potential customers work for nor the websites where my ads were displayed.
In short, I could not reach my customer persona. Conversely, these two barriers do not exist on LinkedIn: I can select which companies my target audience needs to work for and all my ads are displayed only on LinkedIn feed. The result? The campaign has a CTR of 1%, a cost-per-conversion of £192, a 10X ROI.
These results could be achieved only by understanding the business audience, how the product resonates with them, and which channel made everything possible.”
Martin Seeley of MattressNextDay agrees and says, “Based on my experience, the most effective way for generating product qualified leads is to identify patterns and explore user research. When reaching out to a PQL, they already have experienced meaningful worth in your product, so there’s no need to sell them on the value.”
Seeley continues, “However, I’ve found that it is essential to know what type of audience you attract and what features they are most interested in. It is not only necessary on a product level but can also help you in sales and marketing.”
Finding the right pattern for segmenting our users based on product engagement was not that easy right away. This is why we did some exploratory research. Our product teams spent more time talking to users and less time on other tactical activities. In other words, we started talking to your customers to get closer to them and genuinely listen to what they have to say.”
Kristel Staci from Zutrix suggests that one of the best ways for us to generate leads and then turn those leads into real customers is through the use of industry reports and case studies.
“In the world of SEO and online marketing, everyone is always looking to get the upper hand. By compiling fancy-looking reports and PDFs, we can collect user data from individuals and organizations that are interested in this type of data, then follow up with them on our SERP solutions available. The pre-qualifier is super simple, and backs out into much higher engagement on the actual backend offer.”
Related: 22 Marketing Agencies Shared Their Top Case Studies. Here Are the Precise Strategies They Used
Nicole Sengers of Spitfire Inbound shares one last tip for generating PQLs, “Get Specific! To generate true product qualified leads you need educated buyers who understand the problem your product solves and know what they want to get out of the product they buy. Good quality leads are informed and they ask lots of questions, and allowing these leads to do research on their own before speaking to sales will generate better quality leads and weed out the researchers.”
While implementing PQLs won’t solve all of your sales and marketing woes, it can be an efficient way to gauge the intent of a lead. After all, they have taken the time to sign up for a free trial or the free version of your product.
It is up to you to build out PQLs benchmarks to show which leads are the most like your ideal customer profile and have the highest likelihood of turning into a paying customer.
Get practical strategies that drive consistent growth
Latest from our blog