Everything You Need to Know about Product Qualified Lead (PQL)

Product Qualified Leads

In the SaaS market, it is a challenge to convert leads and earn revenue. Companies have been following the same pattern for years now. Before we dig deeper, here’s a little backstory: If your leads have actively engaged with your marketing efforts, with little idea of your product, they are Marketing Qualified Leads or MQLs. If they have reached out to your team themselves, they are Sales Qualified Leads or SQLs. The funnel is full of these leads, which filter out and turn into consumers, along with the huge amount of leads lost in qualifying them. That’s where a Product Qualified Lead (PQL) comes in. To save your funnel. And to change the way you get your customers.

What is a Product Qualified Lead?


A PQL or Product Qualified Lead is a prospect that has already gained meaningful value while using your product. PQLs work on a try-before-you-buy model, where brands give free trials of their products or make a freemium offer. A lead takes the offer, uses its trial period, and gains value through your product. They don’t need to be told the qualities of the product because they have experienced it first-hand already.

Since they know how useful your product is, PQLs will often convert at 5x to 6x that of MQLs. They tend to become long-term, loyal customers of the brand if they are ‘sold’ on your product already.

What makes PQLs so important for long-term success?

PQLs are prospects that have already found value in your product and are more likely to convert. They are important because the company spends less time and resources on getting them to make a purchase and become a recurring consumer.

Customer satisfaction is one metric that companies use to better their products and services. Since your PQLs are convinced of your product, they become a group of satisfied and happy consumers. Something that is invaluable in the long run for a company.

PQLs are both happy and long-term. So they are more likely to make recurring purchases, and find value in products that you up-sell and cross-sell, making them a great source of steady revenue. Hence, PQLs are extremely important for a company’s long-term success.

How to identify PQLs?

Identifying PQLs is the most challenging part of using them for your growth strategy because there is no specific definition of a PQL. A PQL will differ from product to product and company to company according to their definition of a successful customer.

Track how much a prospect is engaged with your product on a free trial. See if they are increasing their engagement with your product and brand every day. Make patterns of usage for each of your prospects or an account. Think about what your successful consumer looks like, and match those criteria with the ones on a trial. Define the metrics that make your product valuable and pinpoint users crossing that.

Remember, just because a prospect signed up for a freemium or a trial period, it does not mean they are a PQL.

How to Implement PQLs across different departments?

1. Sales


After getting the PQLs, it is up to the sales department to convert them into consumers. So they are in a special position to decide what kind of offer and plan they can extend to each of the PQLs in an attempt to convert them.

The two metrics that Sales can use are the PQL to customer ratio. Which stands for the quantity of the leads converted. There is no defined quality metric for Sales, but they can determine it for individual cases, depending on their lengths of contract or the average revenue the company can earn from them. In any case, the bottom line is to upgrade customers and retain them.

2. Marketing


The marketing department is the one responsible for collecting and organizing the leads to be handed over to sales. So, it is on them to ensure that the prospects they categorize as PQLs are of good quality and are likely to convert. Else Sales would be wasting their time and resources.

The two metrics advised for marketing, are to keep a check on their website visitors to sign-up ratio and sign-up to PQL ratio. The former stands for quantity while the latter stands for quality. The department has to find a balance where they are getting an adequate number of sign-ups. But in the process, are not compromising on the quality of PQLs they are creating.

3. Customer Success

Customer Success

The Customer Success team is the bridge between users and consumers (no, both of them are NOT the same thing!). They are concerned with the progress the sales team makes in converting the free trial users to actual consumers.

The metrics used by the team are sign-up to PQL ratio as a quantity metric, to check the number of sign-ups that take the user trial and the ones that finally convert. Their quality metric is the MMR expansion rate, to track the increase in revenue per month. And hence, the actual growth of the company per month.

4. Product


The product team is the one responsible to ensure that the product delivers on its promised value and experiences. They are there to develop new features and enhance the product to improve it time after time.

The metrics suggested for Product is to track sign-up to PQL and PQL to consumers. The first one is the quantity metric that is indicative of how appealing the prospects find the features of the product and sign up for it, and the quantity metric is the number of converted consumers, which is indicative of how many people actually found the product valuable.

These metrics can keep the team aligned on how to develop the product further.

5. Engineering


The engineering team is to ensure that users have the least inconvenience in using the product and adoption of the product into their work culture becomes easier for converted customers.

The metrics they can use are sign-up to PQL as a quantity metric and PQL to customers as a quality metric. The quantity metric shows how the product is doing. When it comes to its features and the way it attracts a prospect.

The quantity feature actually shows how the product is doing in becoming a part of their life, implying the ease of adoption of the product. In other words, the metrics for the engineering team define the success of the free trial period.

Over to you…

It is no secret that acquiring a consumer is a lot more expensive than retaining an old one. PQLs are consumers that are here to stay for the long run. Because they find actual use of your product, capable of solving their problems and it would need a better product to change their opinion. They are the best lot of prospects to target.

Of course, driving a successful product-driven strategy is not a joke; it requires careful examination, analysis of usage patterns, and tracking of trends to identify the PQLs and target them. But the asset that each of the converted PQL becomes for the company is worth the effort put into the campaign. 

However, if you don’t know how to direct your efforts in the right direction. It is best to seek advice from expert B2B sales and marketing consulting firms. This will ensure no resources are lost or misused – both in terms of money and efforts.

Do you also want more PQLs in your sales funnel? Contact us today and we will take it up from there!