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Product-Qualified Lead

‍What is a Product-Qualified Lead?

A Product Qualified Lead is a potential customer with a strong likelihood of buying the product because they have experienced and understood the product’s value via a free trial, a limited feature freemium model, or any other type of first-hand experience.

Simply put, it is someone who has experienced the value of a product and is more likely to make a purchase and become a customer.‍

Why is PQL important?

PQLs are important for several reasons, as stated below:

  • They do not need to be convinced to buy the product as they have used it already and found value in it.
  • The sales process is not lengthy. No demonstrations or discussions are needed before the customer commits to buying.
  • The conversion rate is higher than Marketing Qualified Leads(MQL) or Sales Qualified Leads(SQL).
  • Apart from the value to the sales team, PQLs are also valuable to growth teams as they help identify which metrics lead the conversion from a free trial to a paid service and should be prioritized.

In short, PQLs can save your sales team time and effort, and sales are faster without their extensive involvement. They considerably lower your customer acquisition cost and provide valuable growth in product experience.

How to identify a PQL for your PLG company?

A Product-Led Growth company is where product usage is the driving force behind customer acquisition, conversion, retention, and expansion. PLG companies realize that focusing on PQLs is a product-led approach to growth. PQLs are the superior metric for boosting conversion rates. PQLs will mean more happy customers with lesser time and money spent, recurring revenue, and increased customer retention.

The first step is identifying what PQL means to your company. It includes finding the behaviors that correlate to users upgrading to paid customers. With constantly evolving product features, it is a moving goal. You need to pinpoint the behavior patterns of users who upgrade. Focus on each metric critical to your company and evaluate and score the actions taken by a free user that has successfully converted. Analyzing each goal this way will lead you to the PQL persona perfect for your PLG company.

Correlate your data with demographic information and commonalities between your most valuable customers. Rich details on PQLs' business can help you narrow down the categories you are most interested in selling to. All this information can help your sales team tailor their sales process according to the customer's needs.

How to implement PQLs across your software company?

The process of implementing PQLs takes four steps:

  1. Defining your ideal client. Start by outlining the characteristics of your ideal client, the companies they work for, personal details, and so on. Include the negatives, as it will help eliminate accounts that will not convert to paid customers later. Create multiple profiles to cover even minute differences, as they will aid in prioritizing.
  2. Define the Product Activated Lead. Product Activated Lead is a user who has reached the activation point, meaning they have made a purchase intent clear. They have experienced and understood the value but may not be using it to its full potential, like customers who have exhausted the free subscriptions. We can use the opportunity to convince them to upgrade to a paid package.
  3. Combine both to get the PQLs. This is the most crucial step: merge the Ideal Customer Profile and Product Activated Lead to discover the PQLs.
  4. Create a program to engage with leads. The point of collecting all this data is to take action and engage with users to convert them to business. Users will fall into four categories on the buyer's spectrum and require engagement accordingly:
  • Free users: This group will require the most sales involvement to convert to a paid customer.
  • Users requesting sales assistance: These users will need a bit of convincing, but not as much as the free users.
  • Users having maxed out free plans require a small push, having immersed into the product experience and exhausted free subscriptions.
  • Users that convert without assistance: These customers are sold on the product value and need no convincing to become paying customers. Marketing teams can target this category for upsell- to pay for a higher tier.

If done manually, it can be a long, tedious process, especially in Steps 3 and 4. A lead qualification software specialized in PQL can help you do this and more, making it easy to understand users’ engagement levels and provide insights for those who convert.

What is a Marketing Qualified Lead?

An MQL or a Marketing Qualified Lead is someone who has shown some interest in your product/company and has the potential to become a customer.

Marketing teams can identify an MQL from these actions:

  • Engaging with your brand on social media
  • Downloading a free eBook
  • Using software demonstrations
  • Filling online forms
  • Submitting an email address for a mailing list or newsletter
  • Favoriting items
  • Adding items to the shopping cart
  • Repeated site visits or spending time on your site
  • Clicking on an ad to find your site
  • Requesting more information

These people have taken the first step to engage with your business. They may be considering you and also be more receptive to a pitch from a sales rep. They are a good fit for retargeting efforts.


Before the free-trial offer days, software brands qualified their leads based on specific actions like website visits, downloads, frequency of email opens, etc., and qualified these users as MQLs. These clicks were counted as interest, whether or not the client had any product interaction. For example, simply opening an email would make you an MQL, whether you or not you engage with its content.

MQLs analyzed these basic activities only. Without product engagement, these actions are arbitrary and not indicative of buying intent.

Today, customers are interested in experiencing the product rather than sales gimmicks. Software companies cannot gauge interest without providing free trials. Free trials have become the norm and allow SaaS companies to gather usage data and discover real customers. Enter PQLs, someone who has used your free trial or a freemium model and seen the value it brings to them. They are more likely to become paid customers than MQLs.

PQLs are, by definition, a step ahead of MQLs in the customer journey. The qualifying leads have a higher conversion rate. The sales process is also shorter because customers need less convincing. Shortlisting the high-value leads quickly, the PQL model allows sales teams to focus on the best opportunities rather than wasting time processing all qualifying leads. PQLs also highlight the metrics to focus on, indicating what leads to customer success. These insights are highly beneficial for improving the product and customer experience.

Which one is right for your SaaS business?

PQL-focused growth is the way to go for your SaaS business. SaaS customers want to experience the product themselves. They may even join a free trial or gain access to a freemium model on a self-service basis. The free trial can be beneficial for SaaS companies as well. It gives the ability to identify future sales opportunities, among other things.

PQLs can help you better understand your buyer persona. SaaS products are usually created with an idea of a specific user, but who engages with and buys your product may be completely different. Understanding the end-user and his profile will allow you to see how your product helps and steer your decision-making on development and enhancements accordingly.

PQLs let you focus on who is most likely to convert. They have been through or free trial or used a freemium model. Users who use your product and engage with it daily are more likely to convert into paying customers. The focus should be on increasing engagement and not just increasing the number of customers who opt for a free trial. This will give high-value PQLs.

Therefore, the PQL model allows you to make customers happy to use your product and convert them into paying customers. You grow your revenue without spending time on marketing and sales by upselling and cross-selling your product. Revenue growth can come from pricing additional features or a higher level of service, offering complementary products, and so on.