Complete Guide to Identifying and Converting PQLs in 2021

For your product-led business, Product-Qualified Leads (PQLs) is one of the most powerful signs of success for your marketing plan and your product. 

In this article, you will not only get to know them better but also try to define what they mean for your business and how to utilize them in your long journey to growth.

PQLs indicate the customers which are closest to buying your product; it is clear that they are essential because they come in handy when you need to understand which customers you should mainly focus on.

I know what you’re thinking right now.

Wait, that’s nice, easy and all.

But what does it actually mean?

What is a PQL?

A Product Qualified Lead is a lead who has achieved meaningful value using your product with the help of a free trial or a freemium and is wanting more, thus showing more interest in upgrading.

The main goal of its strategy is to allow the customer to fully understand and appreciate the product’s value through a detailed interaction.

In other words, it helps the users reach the ”Aha!” moment. This moment indicates the exact moment in which your user starts understanding and appreciating your product.

When PQLs are understood and used correctly, they can help you increase and speed up your business closures. However, when they’re misunderstood, they might hinder your process.

To be able to take the most advantage of them, let’s clear out some confusion regarding their definition.

What is not a PQL?

When it comes to understanding PQLs, some common misconceptions may occur.

Here are a few things that do not count as PQLs:

  • Marketing Qualified Leads (MQLs)
  • People who upgrade their free plan
  • Someone who signs up for a free trial

If your PQL definition turned out to be one of these above, your entire team would focus on that particular outcome and thus, would lose time and energy focusing on something entirely different.

There are three ways to correctly categorize and name your customers: MQLs, SQLs, and PQLs.

Although their definitions are highly dependent on your particular business model, there are some key differentiators.

When a lead becomes sales (SQLs) or marketing (MQLs) qualified, you use their actions on your website to see when they are willing to buy.

These actions may include :

  • Activating e-mails.
  • Accomplising a key task.
  • Adding a co-worker to the platform.
  • Viewing a pricing page.
  • Submitting a contact form.

Let’s briefly compare these two types of leads with our former topic; PQLs.

PQL vs. MQL

To be able to point out the difference between PQLs and MQLs, it’s important to identify certain behaviors each lead practices.

MQLs are labeled after they’ve -in some way- benefited from your marketing content.

Examples of MQL behaviors may include downloading e-books, brochures, submitting forms, and more specifically, liking, tagging, and tweeting.

On the other hand, PQLs are identified when they use your brand’s product and show new signs of getting more involved with it.


PQL vs. SQL

SQLs can be relatively easier to identify and differentiate from PQLs.

When SQLs are tagged, you know that they’ve taken a step further and shown interest in the product in a more responsive way.

SQL behaviors speak to us in a way that is clearer and more engaged with our product and they include inquiring about pricing offers, skipping product demos, or contacting a salesperson.

In that sense, SQLs are closer than ever to becoming PQLs :

Identifying Qualified Leads

Hang on a sec! Why should I even care about PQLs?

If that’s what you’re still wondering, here’s why:

Why Should You Utilize PQLs?

  1. PQLs are a critical requirement for a product-led business to grow.
  2. They are tied to a meaningful value which means they are more likely to convert into paying customers than other leads.
  3. They help arrange both the marketing and sales teams and your users to become eminent in your product, which ultimately leads to more sales closure.
  4. They are essential for maintaining an effective sales system.
  5. They do a great job of helping your sales team understand which accounts to go after.

How to Identify a PQL for Your Business?

Figuring out what a PQL means for your business can be challenging at times.

There are a million ways to examine what a PQL is for your business, but at the end of the day, all that matters is that you try to find behaviors that associate with people upgrading.

As your product continues to evolve and gains more features, it can get more challenging for you to pinpoint the exact actions that lead people to upgrade.

To ensure the identification of a PQL for your business, you need to know your value metrics.

value based metrics

According to Patrick Campbell, the CEO and co-founder of Price Intelligently, the ideal value metric must parallel with your customer needs, grow with them, and be easy to wrap one’s mind around it.

Before You Go Further: Good Examples of PQL

Businesses don’t need to have the same Product Qualified Lead definition; they should constantly improve and refine their description of a PQL and make sure it helps -or still helps- the user experience the ‘‘Aha! Moment.”

Here are a couple of examples of PQLs from well-known brands.

Slack

Slack's Definition of PQL

Slack is a wildly successful messaging app that enables people to work as one joint team and makes work-based communication and work environment fun, engaging, and easy to follow.

For Slack, throughout analysis of results of people who ended up upgrading the product showed that once users reach 2.000 messages, they understand the product’s value, thus, upgrade it.

Other studies through time showed that a lead hit the value criteria to begin qualifying as a PQL when it has:

  • Signed up
  • Created more than two channels
  • Invited teammates
  • Reached the messaging limit

Facebook

We’re all familiar with Facebook. It’s a social website that allows its users to connect with family, friends, and more.

If you’re a PLG company like Facebook, you probably have thousands of customers using your product or free trial. In this scenario, PQLs help you answer the question ”Who should you focus on to convert the most users?”

For Facebook, a PQL is tagged when someone adds seven friends to their Facebook page.

This shows that the user is engaging with the product, and accomplishing a critical task for the beginning. This user is highly likely to stick around for a long time.


You can see that each of these PQL definitions is closely connected with what the business offers as a product and it’s safe to say that there’s not a universal formula for identifying PQLs.

Now let’s find out how to identify yours.

3 Steps to Identifying Your PQLs

Identifying PQLs

1. Take the time to understand your users and their goals.

If you don’t make an effort to know your customers better, you will find yourself struggling to create the ideal message for them.

To avoid this, you need to pay attention to your user’s needs, what they are doing with your product, what draws them to your product in the first place, and what they are trying to achieve with it.

By collecting and storing all this information, you will be able to identify PQLs and then create accurate and relevant solutions for them.

2. Define the Important Metrics.

Not every company should be chasing the same product engagement metrics.

You should be familiar with the most important metrics of your product to identify the parameters that matter the most.

For instance, for some companies, time spent in the app is an essential metric, while for some, it isn’t. Therefore, gather around your product marketing team and identify what matters explicitly for your growth.

3. Look out for hand-raising behavior.

Hand-raising behavior represents an interest in making a purchase or engaging with sales representatives. You can think of them as easy-to-read signs that will help you identify your PQLs.

Common hand-raising behaviors include:

  • Filling in a website form
  • Reaching out for support
  • Visiting the pricing page
  • Passing the usage limit
  • Clicking on certain upselling features

When combined, these three steps will help you build a full PQL profile and allow you to prioritize those leads. Such insights will also enable you to start relevant sales conversations with them.


4 Ways to Improve PQL to Customer Conversion Rates

According to sales benchmark research, did you know that 13% of MQLs turn into SQLs, and only 6% of those SQLs convert into paying customers?

On the other hand, PQLs are changing the game when it comes to gaining long-term customers. Therefore you must master the process of turning them into satisfied, paying customers.

Here are 4 ways to improve PQLs to customer conversion rates:

1. Provide an Onboarding Experience. A Great One.

Free trials are great. They provide your users with almost everything.

But without guidance or any information, how good can they really be?

If a lead starts interacting with your product without any knowledge or help, you can be sure that the trial is less likely to lead to purchase.

Instead of leaving your users completely unguided, you should be focusing on helping them experience your product entirely. For instance, let’s say you have excellent customer support; as long as you fail to show that to your leads, they won’t be able to know your product’s full potential.

Show them how awesome it would be to work with you! Only then you’ll watch them turn into a happy client.

A user onboarding software like UserGuiding will be your best bet at doing this with the least amount of effort.

Here’s a guide I’ve created for Youtube in just 5 minutes with UserGuiding:

userguiding pql

2. Understand Your Users

Understanding the audience you’re targeting, being familiar with their problems, issues, needs, and wants is the most effective way to generate durable PQLs.

Remember that the only way you can deliver an accurate marketing message is through targeting your potential customers and what makes them click.

This type of attitude will allow your marketing team to design a correct message for the targeted users, and it will show your product as the answer to their questions.

3. Use PQL Scoring Benchmarks

According to Mike Tatum from SurveyMonkey, the most effective way to generate product-qualified leads is through lead scoring.

To determine if a particular product is ideal for your user, you need to use data leads and behavioral data on what content they are explicitly interacting with.

Examining, studying, analyzing, and learning from your users is the key to customer conversion.

4. Keep In Touch

When it comes down to PQL closures, personalization and offering value -paying attention- at the right time are super important.

By monitoring your users’ journey, you can send relevant, catchy, and straight-to-the-point e-mails that will walk them through their experience with your product and show them accurate results.

Offering this type of help at the right time will help you build strong relationships with your users and, consequently, close more PQLs.

Conclusion

Hopefully, this guide to identifying and converting PQLs did a good job assisting you with your work!

Remember that when you’re aiming for growth, you should be chasing every possible action that will contribute to your success. Good luck!


Frequently Asked Questions


What is a PQL in sales?

In sales, PQLs refers to an individual or business who has experienced meaningful value from using a certain product through a free trial or freemium. These leads take the sales game a step further because they have interacted with the product and have more knowledge about it. Therefore they are minutes away from being paying users.


What does PQL mean?

PQLs are potential customers who have a strong likelihood of becoming long-term, paying ones because they have in some way used your product or taken actions that indicate their willingness.

pqls

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Suay Çakırca

I'm one of UserGuiding’s creative content writers that work hard every day to come up with 💯 content. I usually write about UX, onboarding, and growth. If you like what you read, let’s connect on LinkedIn to talk more about it! I’ll be replying with my cat on my lap and will most probably pause a movie, but hey, I don't mind at all!

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