Growth Marketing

Everything You Need To Know About Product Qualified Leads

Find out what product qualified leads are, how to identify and leverage them, and discover a tool to automatically find PQLs for you.
September 20, 2022
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They love me. They love me not. 🌹

That’s a thought that crosses every SaaS salesperson’s mind when reading the numbers on email opens, website visits, and other arbitrary factors.

But it’s hard to find true love leads this way, as you can’t assess engagement levels solely based on these metrics. 

That’s when Product Qualified Leads (PQLs) emerge like warriors ⚔️ and change the love-hate game of lead qualification. 

They love me. They love me not. 🌹

But what is a product qualified lead? 

And how do you identify such a lead for your business? 

Don’t worry. We’ve got you covered! 

This article is an ultimate guide to understanding what product qualified leads are and how to identify a qualified lead for your SaaS product.

It also covers how to align different teams in your organization to drive more PQLs and a smart way of identifying such leads automatically. 

Let’s begin!

What Are Product Qualified Leads? 

A product qualified lead (PQL) is a lead (duh) or a prospective customer who has derived meaningful value from your product by signing up for a free trial or the freemium plan.

Essentially, it's a lead captured through a “try-before-you-buy” or product led growth approach that allows users to experience an “Aha moment” early on in their customer journey.

What’s an Aha moment? 

It’s a point in product usage where a prospective customer goes….

Oh, wow!

…while using your product. 

So, you mean that a freemium user is a product qualified lead? 

Umm...Yes and No

Your free trial users don’t automatically qualify as product qualified leads. 

To arrive at the “wow 😮moment,” a prospect must navigate different product features or take specific in-product actions.  

This is slightly different from a marketing qualified lead or a sales qualified lead. 


A marketing qualified lead is one who shows interest in your product’s marketing material through actions like downloading a whitepaper or subscribing to a newsletter. The marketing team then chases these marketing qualified leads towards conversion.

A sales qualified lead is one who has moved down the sales funnel and is ready to talk to your sales rep. 

On the other hand, a product qualified lead is one that has already used your product, derived value from it, and is showing real buying intent. 

Here are a few famous examples of product qualified leads: 

  • A product qualified lead for Slack is when trial users reach the 2,000 message limit. 
  • For Dropbox, it’s when free users reach their 2GB storage limit.
  • For Loom, it’s when free plan users reach their 25 videos per person limit. 

Now that a free trial user has already been wooed ❤️by your product, it’s easier for your sales team to take this relationship 🤝 to the next step ‒ convert them into product led sales

However, one of the biggest challenges in the sales process is defining what a product qualified lead is for your business. 

When done correctly, product qualified leads could boost customer acquisition (product led sales) faster than sales or marketing qualified leads. They can also help you uncover users' hurdles in their customer journey. 

So, let’s find out how to define a product qualified lead for your SaaS company. 

Psst… check out 7 great PLG examples. 

How Do You Identify a PQL?

Crafting a unique qualified lead profile boils down to three significant factors:

1. Derive Value from Your Product

At the end of the day, your product or service should be able to ease the pain points of your target audience. 

That’s what you expect from a healthy relationship, right? 

So a product qualified lead would be the one who can solve a problem via product engagement or arrive at an “Aha moment” that you can identify from your product usage data. 

2. Have Buying Intent

A potential customer has seen value in your product or service. That’s fantastic!

But they should be willing to commit to this relationship too.

Have Buying Intent

That means they should have an intention to become a paying customer. 

But how do you identify this intent? 

By looking at specific in-app actions like:

  • Regular logins
  • Inviting colleagues 
  • Creating a team account
  • Developing workflows
  • Clicking on a premium feature
  • Reviewing the price page for long

Product usage tools like Mixpanel, Amplitude, or Heap can help you access such product usage data and identify behaviors that every upgrading customer has in common. 

3. Match the Ideal Client Profile (ICP)

If a lead meets the first two criteria, you will probably not need to consider this at all. 

However, a potential customer who is less likely to churn should meet your demographic and firmographic profile requirements. 

Demographics are usually relevant for B2C products. It could include factors like:

  • Age
  • Sex
  • Target location 

Firmographics include:

  • Industry
  • Company size
  • Employee strength
  • Technology used

For Slack, the demographic profile could be people of all ages, sex, and locations. They could belong to both small or big companies looking out for a messaging and team collaboration tool. 

On the other hand, the ideal target audience for Bumble would be very specific, youngsters between 18-34 years looking to make meaningful personal connections.

Now you may wonder, is it beneficial to dig into all this data? 

Will PQLs help boost my customer acquisition rate? 

Let’s find out!

What Are the Benefits of Focusing on PQLs? 

Selling a SaaS product based on marketing qualified or sales qualified lead is a long-term relationship. 

A sales rep will need to keep nurturing a sales lead for days or even months until the lead feels ready to commit and convert. 

Now thanks to product qualified leads, the lead generation scene is faster than ever!

Here’s how: 

A. You Only Reach Out to Good Quality Leads

Unlike marketing or sales qualified leads that depend on engagement metrics, for PQLs, you can use product usage data to zero down on prospects showing real buying intent. 

This could be in the form of: 

  • Free users who qualify your lead criteria
  • Users who’ve reached a limit in their freemium plans
  • In-product “hand raisers” (users that request sales assistance) 
You Only Reach Out to Good Quality Leads

So, product qualified leads work best in identifying which users are more likely to go down through your SaaS company sales funnel quickly. 

B. You Engage with a Prospect at the Right Time 

Your behavioral data could reveal the sweet spots or the right sales opportunity to engage with your potential leads. 

Some of these opportunities could be: 

  • When free trial users hit a usage limit
  • When they’re heavily using a product feature
  • When they’re getting in-app results

This way, you only knock at the door 🚪of your potential customer when they’re ready to talk and not scare them away by being overly clingy at the beginning of your relationship.  

Gosh…nobody wants that! 🥴

So, when your sales team chases good quality potential leads at the right time, it can help: 

  • Increase your customer acquisition rate
  • Shorten sales cycles 
  • Reduce churn rates as PQLs have already derived meaningful value via product engagement
  • Reduce acquisition costs because your marketing or sales team won’t need to nurture the relationship for months to convert such leads.

But one question still remains.

How do you convert these PQLs into loyal customers? 

How to Convert Product Qualified Leads into Customers

Great, you’ve got some promising PQLs.

But how do you convert a lead into a paying customer?

Even if you’re mastering product experience, you still need to push for those conversions. 

Here’s what you should do to convert PQLs into revenue:

1. Segment Your PQLs

Segmenting your PQLs helps you identify who you’re targeting, what message you’ll use, and how you’ll communicate that message. 

You can segment PQLs based on target markets, who the lead belongs to, your company’s goals, and more.

2. Reach Out to PQLs

Encourage your sales team to reach out to leads when they can’t seem to reach value, when there’s an opportunity to add more value (trying out a new feature), or when a lead has reached a paywall. 

Ensure your marketing team sends personalized emails, in-product messages, and more. 

3. Offer a Fantastic Customer Onboarding Experience

Sure, a free trial does let users experience the value of your product firsthand. But new users might want some guidance to help them get the hang of your product, especially if there are complex features to learn. 

Fortunately, by creating a thoughtful customer onboarding process, you can help new users get the most out of your product. 

4. Stay in Touch with Converted Users

Your marketing and sales teams can’t just disappear once the leads have converted. Your converted users will expect the same personalized and hands-on experience they received from the get-go. 

As a result, it’s crucial to keep up your marketing effort by staying in touch with existing customers. 

This will also help address issues before they lead to churn and help you communicate new feature releases and upgrades. 

That said, converting product qualified leads isn’t a solo sport.🏅

Unlike marketing qualified or sales qualified leads, for PQLs, every department needs to work in tandem to drive customer acquisition and retention.

Keep reading to find out how. 

How to Implement PQL Acquisition Across Your Organization

Once you’ve defined a product qualified lead, you need to outline the responsibilities and key performance metrics for each team in your organization. 

A. Marketing Team

Responsibility: Create marketing campaigns that help bring in quality sign-ups.

Key metrics: Number of visitors converting to sign-ups

B. Sales Team

Responsibility: Help free trial users decide which paid plan is right for them.

Key metrics: 

  • Number of product qualified leads converting to a paying customer
  • Sale to contract length or Average Lifetime Value

C. Product Team

Responsibility: Create features and product engagement that offers value to the users.

Key metrics: 

  • Sign-ups converting to qualified leads
  • Qualified leads converting to customers (based on product experience and customer satisfaction) 

D: Customer Success Team

Responsibility: Bridge the gap between free users and customers and expand accounts by upselling to existing customers.

Key metrics: 

  • Sign-ups converting to PQLs
  • Monthly Recurring Revenue (MRR) expansion rate 

Now, to meet these performance parameters, the teams need to review prospects signing up for your SaaS product and what they’re doing with it. 

Naturally, if you ask your sales, marketing, or customer success team to evaluate each customer manually, their inner voice will say…

it`s never gonna end

So, is there a better solution? 

Automatically Identify Product Qualified Leads with Toplyne

While you may be accustomed to using Google Analytics or the classic CRM software with lead qualification features, the results are pretty superficial. Essentially because their lead scoring algorithms are based on an arbitrary point system. 

You need a new breed of tools that can help you track every user’s product usage and identify product qualified leads for the right sales opportunity. 

Like Toplyne!  

Toplyne is a plug-and-play platform that enables SaaS businesses to drive their product led growth.

It can help you quickly identify product qualified leads based on in-product actions and assist your sales team in converting leads into premium users. 

Sounds promising? 

Here Are Some Ways Toplyne Can Help You: 

  • Integrate Toplyne’s intuitive product usage data with your existing marketing tools (Amplitude, Mixpanel, etc.) to determine free trial users with the highest potential to convert. Also, integrate it into your existing CRMs (Salesforce. Hubspot) and customer engagement platforms (Braze).
data sources
  • Categorize users as target personas that include promising users, new users, or users that need attention.
  • Rapidly experiment and deploy various go-to-market (GTM) motions at scale.
Rapidly experiment and deploy various go-to-market (GTM) motions at scale
  • Equip your sales team with the most suitable lead scoring information to close a deal, like product usage signals or billing information.
Equip your sales team
  • Drive self-serve conversions through in-product nudges (chatbots, paywalls, promos) or sales-assisted conversions.

Did you know?

Companies like Canva, Invideo, and OpenPhone are already using Toplyne to filter out quality leads and focus their efforts on nurturing them. 

So what’s holding you back? 

Start Loving the Lead-Gen Game with PQLs

Product qualified leads could be the perfect first dates 💞for your sales and marketing teams - with the promise of long-lasting relationships.

But the key to qualified lead generation is defining what a qualified lead means for your SaaS business and having all your teams work unanimously in mastering the product experience. 

Fortunately, Toplyne can be your ultimate guide for identifying PQLs in no time and letting you experiment with various GTM strategies to boost customer acquisition.

Why not book your first date with Toplyne for free today and explore the endless lead generation possibilities? 💑

Start Loving the Lead-Gen Game with PQLs

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