How to Identify a Product Qualified Lead (PQL)
Editor’s Note: This article first appeared on the New Breed blog here.
The marketing qualified lead, or MQL, has long been an important and familiar term in B2B marketing. It’s used to identify when a prospect has moved far enough in your marketing funnel (and in their buyer’s journey) to demonstrate buying intent. However, the SaaS industry innovates quickly, and a new type of qualified lead has joined our ranks. The product qualified lead, or PQL, is used to identify a prospect that has signed up to use your software firsthand and provides even greater visibility into buying intent based on how they’ve interacted with your actual product. So move aside MQL! Let’s explore how to identify a product qualified lead.
Thanks to the internet, buyers have access to more information today than any previous generation. Everything they need to research your product and assist in their buyer’s journey is available in seconds. This has caused two buying phenomenons:
- Analysis Paralysis: With so much information available, some buyers will feel compelled to read as much as they can before committing to a purchase. This act leads to a buyer getting moved down your marketing funnel into an MQL when they’re not really ready to make that decision.
- Try it Before you Buy it: On the other hand, with so much content at the ready, other buyers will feel as if the only way to make a decision is to try your product out before committing. This means they won’t read as much content and won’t get flagged as an MQL, but in fact they’re ready to take a next step.
In both situations, your MQL designation isn’t providing quality leads to your sales team for continued nurturing. In both situations, neither prospect has access to your software until getting marked as an MQL. And so enters the PQL: a new qualification criteria centered on offering access to your software and identifying buying opportunities based on a prospect’s interaction with the platform.
What is a PQL?
Transitioning to a PQL system enables your prospects to use your software prior to purchase (on a free trial or freemium version). As prospects utilize the software, they demonstrate buying intent based on criteria related to bottom of funnel product behaviors rather than middle of funnel marketing ones. This criteria can include:
- Product interest
- Number of users
- Features used
- Spending patterns
- Usage patterns
After setting your desired mix of product activity, you can flag a prospect as a PQL and have a purchase discussion with an individual who understands what you’re offering and has more clearly demonstrated their intent to buy. As a PQL, prospects haven’t just downloaded a bunch of your gated content — they’ve shown real interest in your actual product.
This system also lends itself to a more frictionless marketing funnel as your best leads are already using your software. You’ll devote fewer sales calories convincing them to purchase and more time providing even greater value to the relationship.
The cost to acquire a new customer can already be exorbitant. A PQL mindset can save you time and money by better identifying even better leads for your sales team. Prospects using a free trial or freemium version of your software are already customers, so put them at the center of your marketing flywheel. It can be tempting to keep chasing down fresh leads, but the best ones are already right in front of you. (Just remember, they’re “customers” and not “leads”, so your goal isn’t just to sell, but to help and add value.)
How did the team at SurveyMonkey know it was time revamp their pricing strategy? Find out which signals tipped them off and how they made it a success.
Mike Walsh, CMO at Reflektive, has gone through multiple pricing processes and has developed his own framework for assessing the situation and then developing pricing that is appropriate and effective. Learn more about his 4-step framework here.