You spend hours optimizing your landing page and creating content to capture email addresses. Your marketing team hands over a list of names. You call them, but nobody answers. This is the frustration of relying solely on traditional lead generation.
A Product Qualified Lead, or PQL, flips this dynamic.
A PQL is a potential customer who has actually used your product and reached specific triggers that signify a strong likelihood to become a paying customer. Unlike a lead who downloaded a whitepaper or attended a webinar, a PQL has experienced value firsthand. They are not just reading about your solution. They are using it.
This concept is central to the Product-Led Growth (PLG) movement. It relies on the premise that the product itself is the primary driver of customer acquisition and retention.
The Mechanics of a PQL
#Identifying a PQL requires you to move beyond demographic data. You must look at behavioral data within your application.
A user becomes a PQL when they hit a meaningful milestone during a free trial or within a freemium version of your software. This milestone is often referred to as the activation point or the “Aha!” moment.
Common triggers might include:
- Usage frequency: The user logs in three times in the first week.
- Feature adoption: The user activates a core feature that drives the most value.
- Volume thresholds: The user uploads a specific number of files or sends a certain number of messages.
- Social signals: The user invites colleagues to join the workspace.
The specific criteria will change based on your business model. You have to ask yourself what specific actions correlate with a user eventually pulling out their credit card. If you do not know the answer to that question, you cannot effectively define your PQLs.
PQL vs. MQL vs. SQL
#It is easy to get lost in the acronyms of sales and marketing. Here is how the PQL compares to the traditional definitions.
Marketing Qualified Lead (MQL): This person has engaged with your marketing materials. They might have downloaded a guide or subscribed to a newsletter. We know they are interested in the topic, but we do not know if they are interested in your specific product.
Sales Qualified Lead (SQL): This lead has been vetted by a sales or business development representative. They have the budget and authority to buy, but the vetting is usually based on conversation or firmographic data rather than product experience.
Product Qualified Lead (PQL): This person has used the product. They have moved past the theoretical and into the practical application of your tool.
Because PQLs have already experienced the value proposition, they historically convert at much higher rates than MQLs. They do not need to be sold on the concept. They need to be sold on the upgrade.
When to Prioritize PQLs
#Not every startup can leverage PQLs immediately. This metric is most useful for SaaS companies employing a bottom-up approach.
If you sell six-figure enterprise contracts that require a three-month integration before anyone logs in, PQLs are not your primary metric right now. However, if you offer a free trial or a freemium tier, tracking PQLs is essential.
Focusing on PQLs forces you to align your engineering, product, and sales teams. Sales teams stop chasing cold leads and start helping active users overcome hurdles. Product teams focus on onboarding flow to get users to that activation point faster.
Are you tracking vanity metrics like signups, or are you tracking value metrics like usage? The answer to that will determine if you are ready to build a PQL engine.