A guide to product qualified leads (PQLs)

Back in the day, most teams would get excited about leads from users who simply downloaded a report or signed up for a newsletter. They called these folks marketing qualified leads (MQLs). You can think of these as someone walking into a store, glancing around, but not really touching anything — yet you’d think they were ready to buy. But as teams grew smarter, they realized that window shopping wasn’t enough.

As we move to more product-led startups, the definition of a promising lead has transformed. Now, there’s a sharper focus on product qualified leads (PQLs). These are users who actively engage with a product. They might sign up for a free trial, frequently use specific features, or send in queries about functionalities.

It’s akin to someone trying out a pair of shoes in a store and ensuring that they fit before making a purchase. For product-led startups hungry for organic growth, identifying and nurturing these PQLs has become the cornerstone of successful conversions.

In this article, you will learn what PQLs are, how they differ from MQLs, and how to use them effectively within your product team.

What are PQLs?

A product qualified lead is a potential user who has experienced value from your product firsthand. This experience often comes from using a freemium version of your product or a product trial. PQLs stand out because their interactions with your product indicate a clear interest, making them more likely to convert to paid users compared to leads who haven’t used your product.

To break it down, PQLs have three main characteristics:

• Product interaction — Unlike traditional leads who might only have filled out a form or subscribed to a newsletter, PQLs have interacted with the product. Their qualification is based on their usage and behavior within the product
• Experience value — PQLs have recognized the value of your product (your unique selling point) and might have reached partially the aha moment. It’s not about the number of features they’ve used but the core value they’ve derived from it
• Intent to buy — While they might not have made a purchase yet, their product interactions show a clear intent. Their actions, like using advanced features or regularly logging in, show a more profound interest in your product

For instance, imagine a cloud storage service like Dropbox. A user who signs up for a free account and starts actively uploading files, sharing folders with colleagues, or integrating with other tools is a PQL. Since this user has experienced the value prop of Dropbox, they might opt for a paid subscription at any time.

Using the characteristics mentioned above, here is an illustration of this user’s characteristics:

• Initial interaction — The user signed up and started using the service without any prompt. They weren’t just browsing; they took actions
• Experience value — By actively uploading files and using sharing features, the user is experiencing the core value proposition of Dropbox — easy file storage and sharing
• Intent indicators — If the user begins to explore business plans, collaborates on shared documents, or integrates their Dropbox with third-party apps, these are strong signals of their intent to possibly upgrade to a paid version. They’re not just casual users; they’re extracting value and are potential users.

In essence, product qualified leads, like our Dropbox users, show through their actions that they’re not just interested but are seeing genuine value in your product. Identifying and nurturing such users can significantly boost conversions and growth for your products.

Product qualified leads vs. marketing qualified leads

Let’s jump back one step and see the core differences between the old MQLs and the relatively new PQLs:

Criteria	MQL (Marketing qualified lead)	PQL (Product qualified lead)
Source of qualification	Often comes from marketing efforts like content downloads, webinars, or newsletter sign-ups	Derived from product usage, like trial sign-ups, active feature usage, or frequent logins
Behavioral indicators	Engagement with marketing materials, such as opening emails, attending webinars, or visiting landing pages multiple times	Direct interaction with the product, like using specific features frequently or integrating with other tools
Stage in funnel	Usually in the awareness or consideration stage. They are aware of the solution but might not have decided on a purchase.	Further down the funnel, often in the decision-making stage. They’ve tried the product and seen its value firsthand.
Conversion potential	Moderate. They’ve shown interest, but it’s not as concrete as trying out the product	High. Having experienced the product’s value, they’re more likely to convert to a paying customer
Nurturing strategy	Generally requires more education through content, targeted emails, and possibly sales calls	Requires personalized approaches based on product usage, feedback sessions, and tailored offers or demos

How to identify a PQL

There are countless techniques and hacks to spot PQLs. Here are the top ones I implemented before:

• Product usage data
• Customer behavior
• Feedback and communication

Product usage data

The most direct way to identify a PQL is through analyzing how they use your product. You can do this through the following:

• Feature engagement — Monitor which features of your product are most used by a particular lead. For example, suppose you’re offering a cloud storage solution. In that case, a PQL might be those frequently organizing files into folders, sharing links, or approaching their storage limit, indicating they might need more space soon
• Session duration and frequency — This reflects engagement and value derivation. Consider a social media management tool: Users frequently scheduling posts, analyzing metrics, and interacting with the comment management system are potential PQLs, indicating they’re relying heavily on the tool for their online presence
• Progression in product journey — PQLs often make headway in your intended user path. For instance, in graphic design software, users transitioning from basic templates to advanced design functionalities, using layers, and customizing graphics might be more likely to invest further

Customer behavior

Behavioral patterns can give you insights into a user’s potential to become a paying customer. These might include:

• Upgrade inquiries — An ecommerce platform user asking about business account benefits or bulk purchase discounts, for instance, shows interest beyond casual browsing
• Integration with other tools — Think of a user of an analytics platform who integrates it with their ecommerce site, social media, and email campaigns. This user is clearly aiming to centralize and optimize their operations using your tool
• Repeated engagements — In a video editing tool, for instance, a user who experiments with different video formats, exports in various resolutions, or explores the library of effects and transitions regularly suggests repeated and in-depth engagement

Feedback and communication

Engaging with users and collecting feedback is not just for product improvement; it can also help identify PQLs. You can collect feedback with:

• Feedback forms and surveys — Imagine a podcast hosting platform where users give feedback about enhancing audio effects or improving monetization options. Such detailed responses hint at users’ intention to grow their podcasts using your platform
• Support interactions — In a SaaS platform, if users are frequently reaching out, asking about API integrations, third-party compatibility, or custom solutions, it indicates their ambition to adapt and grow with your tool at the core
• Community engagement — Active members in, say, a digital art software community who regularly upload tutorials, participate in challenges and assist newcomers are deeply ingrained in the ecosystem and are valuable PQLs

By synthesizing insights from product usage, observed behaviors, and direct feedback, businesses can refine their strategies to best appeal to and nurture these promising PQLs, ensuring a higher chance of conversion.

Strategies for nurturing product qualified leads

Once you’ve identified your PQLs, the next vital step is to nurture them. The right strategies can transform a PQL’s initial interest into a long-term investment in your product. Here’s three key strategies:

• Personalized messaging
• Product demos
• Targeted content

Personalized messaging

It’s always about the personal touch. When a user feels like a message is super personalized and not just a template message, they’re more likely to engage.

Imagine you’re running a cloud storage platform (recap our Dropbox example). From your data, you notice a PQL who frequently uploads high-definition videos. A personalized message might be: “Hey [Name], we noticed you store a lot of HD videos. Did you know our premium plan offers faster upload speeds and better video playback? Try it out!”

Product demos

Sometimes, seeing is believing. Offering a hands-on, guided tour can address any lingering questions or doubts a PQL might have.

Let’s say you have a SaaS product offering retail business inventory management. For PQLs who have added many items but have yet to utilize advanced tracking features, you could provide a dedicated demo like, “Join our 30-minute deep dive into tracking and predicting inventory trends tailored for your business.”

Targeted content

Content is still king, especially when it’s relevant. Sharing articles, videos, or infographics related to a PQL’s specific usage can strengthen their connection to your product.

Consider a digital marketing tool. Suppose a PQL frequently uses the email marketing feature. In that case, it can be invaluable to send them a detailed guide on “Best Practices for Email Marketing Campaigns in 2023” or a case study on a successful email marketing strategy.

Common myths about PQLs

In the realm of product management, you might encounter individuals who don’t see the importance of PQLs. Below you’ll find examples of the most common myths, alongside an explanation of why they’re not true:

• Every active user is a PQL
• PQLs will always convert into paying users
• If they’re a PQL, they don’t need much attention
• PQLs are only for tech or software companies

Every active user is a PQL

Not quite true! Just because someone uses a product often doesn’t always mean they’re ready to buy or upgrade. Think of someone who loves playing a free online game every day but never thinks about buying the premium version with extra features. Activity is a good sign, but it’s not the only thing to look at.

PQLs will always convert into paying users

We wish! Even the most promising PQL might not end up buying or subscribing. This can happen for many reasons. Maybe they found a different competitor/alternative product they liked more, or maybe they just don’t need the extra features besides your free offerings. Think of it like someone testing a fancy car multiple times but eventually deciding not to buy it.

If they’re a PQL, they don’t need much attention

Wrong! Just because a user shows strong interest doesn’t mean you can ignore them. In fact, they might need more attention. Let’s say you run an online course platform. If a user is actively checking out many courses but hasn’t bought any, it might be the right time to send them a special offer or ask if they have questions.

PQLs are only for tech or software companies

Nope! Any business can have PQLs. A coffee shop might see a customer come in often and just order a regular coffee. But if they start asking about unique brews or beans, they’re showing signs of being a PQL. It may be time to offer them a tasting session!

Conclusion

Product qualified leads spotlight users who are genuinely engaged with your product, giving you a more straightforward path to conversions. Remember, every user journey is unique. It’s crucial to:

• Tune in — Regularly analyze product data to identify who’s diving deep into your features
• Nurture thoughtfully — Tailored messages and content can transform interest into revenue
• Iterate — Learn what works and what doesn’t, fix your techniques, and repeat. Refine your approach based on real user engagement, and watch your growth approach take a promising upward turn

Featured image source: IconScout