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what is a product-qualified lead

What is a Product-Qualified Lead (PQL)? A Beginner’s Guide

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What is a PQL?

A PQL, or Product Qualified Lead, is a potential customer who has shown a strong interest in a product or service and is likely to convert into a paying customer.

When leads start pouring in, a company’s next step is usually to begin evaluating and prioritizing the leads that are the most profitable. That’s where a product-qualified lead (PQL) comes in. But what is a PQL, exactly?

In this article, we’re discussing:

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What is a PQL?

A PQL is an individual or business that has used a company’s product through a free trial or freemium model to test the value of the product. Freemium models allow users to engage with your products before investing in them.

Value of PQLs

PQLs typically have a higher conversion rate than other leads because they’re almost entirely sold on your product since they’re enrolling in a free trial, which is a buying signal.

PQLs, in a way, don’t need a lot of convincing to purchase your product. The big leap of faith, so to speak, comes from them choosing to enroll in the free trial or freemium model of your product.

By experiencing your product firsthand before actually purchasing it, PQLs are almost ready to convert. Your sales team’s last hurdle lies in getting the PQL to upgrade to the paid version of your product rather than persuading them of the value of your product.

PQL vs. MQL vs. SQL: What’s the difference?

When selling software or different technologies, the best way for prospective customers to gauge the value of a product is through a free trial or freemium model. It’s why PQLs are mentioned so frequently when talking about Software as a Service (SaaS) companies.

But PQLs aren’t the only acronyms you’ll come across — also used often are MQLs and SQLs. Read on to learn the key difference between these three terms.

Marketing-qualified lead

An MQL, or marketing-qualified lead, is a lead that the marketing team determines is likely to turn into a customer, but who isn’t quite ready to convert or buy yet. MQLs are determined based on interactions with your brand and other behavioral data points identified by your marketing team.

Sales-qualified lead

A sales-qualified lead, or SQL, is a potential customer who has moved past the engagement stage and has been analyzed thoroughly by both the marketing and sales teams. Upon analysis, this prospect is deemed ready for the next stage in the sales process, resulting in a direct sales push.

Will a PQL framework fit my business?

Most often, a PQL framework can be found in SaaS and product-led businesses, although you’ll also see them using MQLs and SQLs to identify priority leads.

That being said, a PQL framework is best suited for SaaS companies. If you’re not selling software, that’s okay too — we see plenty of product-led companies use PQLs to pinpoint leads as well.

Non-SaaS or product-led companies will benefit more from measuring MQLs and SQLs. For example, if your company focuses more on running ads and publishing content like videos, blog posts, articles, and other informative content to reach prospective customers, measuring MQLs and SQLs will help you to identify leads more effectively.

How to define your PQL

Here are a few tips to help you identify which leads qualify as PQLs.

1. Define your ICP or target audience

The first step in defining your PQL is to first define your ideal customer profile (ICP). An ICP is a fictional company you create that possesses all of the characteristics of those who would benefit the most from your product or service.

ICPs are living documents that should be reviewed and updated regularly so they accurately reflect your ideal customers. Your PQLs should align with the characteristics set forth in your ICP because those who match your ICP are the ones who will gain the most value from your product or service, and therefore should be high-priority leads.

2. Identify behaviors that indicate product usage and purchase intent

Once you’ve polished your ICP, it’s time to dig into some data. The next step in defining your company’s PQLs is to identify key customer behaviors that indicate a user has reached an activation point. In other words, behaviors that show the individual has experienced your product’s value and may even be expressing purchase intent.

Some examples of behaviors to look at that may factor into your PQL include:

  • The person uses your product for an extended period of time
  • The user further inquires about product pricing upon reaching the end of their free trial
  • The user hits a paywall within your product, indicating they’ve reached a usage limit

The behaviors and touchpoints used to define PQLs vary from business to business. All businesses have their own goals, so the behaviors they use for PQLs should align with those goals.

3. Integrate your PQL framework across your organization

After you’ve built the framework for your business’s PQLs, it’s time to implement it into your day-to-day business. Implementing your PQL framework is the final step in this process, and it’s also the most important.

Educate your marketing, sales, and growth teams on your newly defined PQLs and ensure they have a deep understanding of the individuals that should fall under this definition.

Your revenue professionals should have a deep understanding of your PQLs so they can effectively pursue these leads, while your sales and marketing need to know how to further nurture these leads and turn them into paying customers.

Measuring the metrics that affect your bottom line.

Are you interested in custom reporting that is specific to your unique business needs? Powered by MarketingCloudFX, WebFX creates custom reports based on the metrics that matter most to your company.

  • Leads
  • Transactions
  • Calls
  • Revenue
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Need help defining your business’s PQLs? Give WebFX a call!

At WebFX we’re pros at helping businesses identify their target audience, and that includes building ICPs and buyer personas, as well as identifying PQLs, MQLs, and SQLs.

Additionally, we’re no strangers to building effective marketing and sales campaigns around those indicators — just ask the 2,000+ clients who we’ve helped generate over $6 billion in revenue for.

Ready to get started? Contact us online or give us a ring at 888-601-5359 today to speak with one of our digital marketing specialists.

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