Product Qualified Leads
For a long long time, sales team have made use of sales software. However, if we go back in times then we may observe that the sales team relied on marketing and sales qualified leads that seemed to be a nice fit for the business theoretically. However, sales teams spent too much time on leads that were never meant to become paying customers because this lead qualification procedure was frequently wrong.
Product lead growth have changed the scenario for the way companies sell their products through sales software. The Product lead growth strategy typically includes freemium model a free trail which enhances engagement among users for the product before committing on the actual investment.
What Is Product Qualified Leads?
Product qualified leads are businesses, users, or individuals who have already used freemium model or free trail of a particular product before actually making a decision of buying, it is kind of a testament of your product value.
These kinds of leads are therefore already sold on your offer, making it very simple to turn them into paying clients. These leads tend to have higher conversion rates compared to other leads. Hence, the sales team only has to convince these leads to upgrade to a paid plan.
Most SaaS buyers aren’t interested in flashy marketing tactics, but they do want to interact with your product before purchasing. In today’s self-service industry, identifying your potential clients requires using data.
What PQLs are Not:
I wanted to take a moment to outline what PQLs are not before we get into how to spot one:
- PQL s are not like Marketing Qualified Leads in nature.
- PQLs don’t upgrade from their free plan
- A person who registers for a free trial is not considered a PQL.
If your PQL means someone trying your free trail, then your entire team is going to optimize for that particular lead to upgrade. This may sound good, but no one is interested in guiding the new user in using the product successfully. A great PQL definition must include guiding the user in achieving success with your product.
How to Identify Product-Qualified Leads
It is a tough task to identify a lead as a PQL. You do not have to consider every user sign up as a PQL because then it will become difficult actually impossible to identify actual users that fall under PQL category. Prior to developing your PQL description, it is often simpler to move backward and look for shared characteristics among your current clientele.
Talking with your customer-facing teams such as sales, marketing, and customer success is one approach for doing this, as they are the ones who interact with product users on a daily basis. Examining the actual facts in your product, however, will help you determine your PQLs more precisely.
Why Are Leads That Are Product-Qualified Important?
PQLs are important for your business as these leads give you direct and proper insight on how users want to equip your products. With PQL leads you can track user specific leads relating to their buying behavior and nature on where they are in the buying process and what should be done to convert those users into paying clients.
Due to the fact that the criteria are defined by your marketing and sales departments, SQLs and MQLs can seem somewhat biased. However, because PQLs are based on what your consumers do within your product, they eliminate all need for guesswork.
Forecasting also benefits greatly from product-qualified leads. Assume you are aware that 25% of your SQLs will become paying clients and 50% of your PQLs will become SQLs. With this purchasing purpose, you can see warning signs, make the right hiring decisions, and put sales and marketing procedures in place to maximize your productivity.
Types of Product Qualified Leads:
PQLs usually fall under 4 categories. However, there are a lot more metrics to identify product qualified leads.
- Free Users: Any user who has joined up for your product’s free trial or freemium edition.
- Free users asking for additional details: Any user who is actively attempting to access a particular product feature or obtain additional information via promotional media.
- Free users who have used the product more than once: Any user who appears to be ready to upgrade to the paid product/service.
- Customers that bought your goods without speaking with your sales representatives: Any individual who has completed a self-serve sales cycle.
To speed up product acceptance, you can understand where each user is in the sales cycle by grouping your PQLs into one of these four groups.
Why do businesses need product-qualified leads?
Let’s talk about few benefits that PQL has brought to the companies:
Shorter Sales Cycle:
With the help of PQL, one does not need to lengthy traditional steps to go around the sales cycle which used to be the case scenario few years ago. If we go back in time then users need to go through a lot of demos and discussions before committing to that product. When you decide to generate leads through PQL, you will notice that the sales team does not have to do much to convert those leads into paying clients.
They Have the Ideal Customer Profile:
Unlike other buyers, a product qualified lead does not need much convincing to buy your product. Why? Because they have already tried your freemium model or free trail of the product and have found value already. On the other hand, sales qualified leads and marketing qualified leads are still relied on the engagement metrics of the respective area. Although, maximum of times these leads have not even reached to the product.
They are easy to Convert:
In comparison to MQL and SQL, PQL conversion rates are higher. Reports and metrics show that, on average 13% of MQL to SQL or max reach to the opportunity stage. Out of those 13% only 6% end up converting as a paying client. Additionally, a sales interaction doesn’t even occur for 84 days. Product-qualified leads, however, convert five to six times more frequently than MQL.
They are less likely to churn:
Users are less inclined to leave a company if they have a great experience with it. Additionally, this sales funnel won’t end after a few months because the sales team is pursuing customers who have already benefited from your product. Because of this, retention rates in a PQL model are often high.
How to Apply PQL Throughout Your Business
Prioritizing PQLs necessitates collaboration across multiple departments within your organization. A number of important steps set the stage for creating an ongoing supply of high-converting PQLs, from grabbing their interest to motivating them to interact with your offerings.
- Marketing: For those who see your advertisements or visit your website, marketing teams should ideally have sign-up forms. Marketing contents will then be read by buyers, converting them into PQLs. Product tour completion rates, demo video views, and feature usage in product simulations are examples of KPIs they should monitor. These exchanges reveal which aspects of the product pique attention and can indicate high levels of engagement and conversion intent. Monitoring those indicators pushes marketing initiatives to focus on quality leads rather than just sign-up volume.
- Sales: The sales team is in charge of converting PQLs into paying clients by offering them the best package for their requirements. With interactive experiences and personalized, interactive demos, sales automation may help them convert more prospects. Additionally, they can concentrate on helping free trial users choose the best upgrades for their priorities and optimizing LTV (customer lifetime value).
- Pre-Sales: The pre-sales team can concentrate on addressing any technical queries, possible integration problems, and doubts regarding particular features or product tiers by collaborating with PQLs. Customers concentrate on taking care of PQLs and making sure customers get the most out of your product.
- Product: How well a product satisfies the needs of its users is the responsibility of the product team. This may have an effect on the proportion of PQLs to paying clients, as well as on customer retention and lifetime value. Product team members can develop and enhance features to promote optimal customer outcomes by utilizing usage data and customer input.
- Customer Success: Upselling, converting sign-ups to PQLs, and turning PQLs into premium customers are the main goals of the customer success team. This team plans to enhance MRR by offering hands-on service and tracking client health. The customer success team turns audience members into PQLs—and eventually paying customers—by using data from demo engagements and customer feedback.
Wrapping It Up:
Focus on creating PQLs to get the most out of every encounter with possible customers. Every marketing campaign, follow-up email, and support call becomes far more valuable and high-converting when each team decides that producing PQLs is its main objective. For any team that interacts with buyers, creating PQLs is a great way to increase efficiency, reduce sales cycles, and increase revenue.
Compared to marketing-qualified leads (MQL), product-qualified leads (PQLs) are more likely to become paying customers since they have witnessed the advantages of a product or service. However, there may be difficulties in placing PQL methods into practice within businesses, particularly when it comes to data integration and teamwork. When concentrating on PQLs, you should employ tools to monitor users and provide free trials or restricted access to features so that prospective leads may learn about your offering.
