What Is A Product Qualified Lead (PQL)?

DEFINITION
A product qualified lead (PQL) is a user who has experienced the value of your product either through a free trial or freemium account. Since they’ve already experienced the value of it, there’s a higher chance of a conversion.

💡Understanding Product Qualified Lead (PQL)

A PQL is a user that matches your ideal client profile (ICP), which means they already fall under the demographics and firmographics of your ideal customer. Once they try out your product and see how it can help them, there’s a high chance they’ll convert into a paying customer.

Since they’ve experienced your product first-hand, the sales team doesn’t have to convince them of the “value” of the product, but rather cater the pitch to their needs based on their usage data and explain how a paid plan can solve their existing problems.

🖋 Takeaway

Product qualified leads (PQL) are one of the most important types of leads for a product-led company. When identified accurately by the sales team, they can prove to be an easy and fast conversion. 

On top of this, PQLs can provide insightful user data even if they’re not converted, which brands can use to further improve their sales funnel. The most essential step in converting PQLs is to actually identify them correctly and then use the behavior data at hand to its full potential. 


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What Is A PQL?

Software companies have traditionally depended heavily on the sales team to carry out demos and convince prospects of the use cases of the product. This was often a lengthy sales process that required a high-time investment with low returns.

However, with the penetration of SaaS, self-service has become a dominant feature in recent years. This means the prospect can try the product at their own pace and identify whether they need it at all before paying for it. 

This has significantly shortened the sales cycle and allows the sales team to identify leads that have a high lead score, leading to higher conversion rates.

Potential customers who have already experienced the value of a SaaS product are called product-led leads. Having already experienced the benefits of the product makes it easier and faster for the sales team to convert these prospects.

MQL vs. PQL vs. SQL

A marketing qualified lead or MQL is a prospect that’s identified by your marketing team through website visits, downloads initiated, engagement with a CTA, or social media posts. While they match the ideal client profile (ICP), the value that they can derive from your product is ambiguous. 

On the other hand, a PQL is a lead that has used your product, going one step ahead of just engagement with your online content. They have similarities with the MQL in the sense that they match the ICP, as well. But the difference lies in how useful they consider your product. 

In other words, MQLs only look like your ideal customers, whereas PQL actually behaves like your ideal customer.

As a result, PQLs are easily qualified by your sales team as the sales qualified lead (SQL) with a much higher conversion rate than MQLs. Since PQLs have such powerful purchase intent, the process of conversion to SQL typically occurs quickly. 

Why Should You Focus On PQLs? 

  • Behavioral data: Since PQLs have used your product for some time and are actively engaged with it, your sales team has insightful information about them based on their usage data. This provides more context to your sales reps to start the conversation with and cater to the lead’s problems instead of hard selling.
  • Easier upselling and cross-selling: Your sales reps don’t just sell your product. Instead, they act as a consultant to solve your lead’s problem. Since they’ve access to product usage data, they’re aware of the lead’s needs and pain points. This allows them to tailor your paid plans to the leads, based on their requirements. 
  • Faster conversions: Well-identified PQLs have strong purchase intent—why would they take time out to test your product otherwise? These prospects are aware of their problem and are ready to take action to solve it, which means your sales reps don’t have to spend time showing them the value of your product. Instead, they just have to find the perfect plan for them.

How To Identify Product Qualified Leads

You have to set certain criteria for your PQL even before you start the lead generation process. A PQL is not someone who has just signed up for the free trial, they have to engage with your product in a certain way to qualify as the PQL. 

For example, an app like Slack can have their PQL as someone who has sent 2000 messages in 2 weeks. Here are some factors you can use to identify your PQL:

  • Ideal customer: A PQL has to match your ideal client profile (ICP). If their demographics and firmographics aren’t the same as your ideal customer, they’re not your PQL. 
  • Usage of product: The lead should be using your product while also generating high value from it. If your product isn’t solving a high-value problem for them, they might not prove to be a long-term customer later.
  • Purchase intent: You can identify the buying intent of the lead from their actions while using the product. For example, a lead visiting the pricing page or trying to use a paid feature is indicative of their purchase intent.

Your lead has to meet all three criteria at the same time in order to qualify as the ideal PQL, ready to buy from you.

The interpretation and collection of usage data is the most important step in the process, but it’s also prone to human errors. At this stage, an ML-assisted tool like Breadcrumbs can help your sales team identify the ideal PQLs, who are ready to make a purchase, by combining their usage data and demographics.

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