Product Qualified Leads (PQLs)

What is a product qualified lead (PQL)? 

A product qualified lead (PQL) is a potential customer whose possible intent to buy your product has been judged based on qualification criteria that relate to activities and behaviors they’ve displayed inside the product.

A PQL is drastically different from the more traditional marketing and sales qualified leads (MQLs and SQLs). Instead of basing their ‘qualification’ and potential to buy on their engagement with the wider brand, some content offering, or sales inquiry, the intent of PQLs has been judged based on their actual behavior and experience of your product. 

Put another way, when you are qualifying leads to determine their relevance and potential to buy, you do that through particular criteria. In the event of a PQL, that criteria is all related to what they do in the product itself. This is different from the typical MQL to SQL lead qualification process which tends to qualify leads based on how well they match your ICP (ideal customer profile) and how engaged they are with the brand (typically through content engagement or making a sales inquiry).

Product qualified leads are users who have had displayed behavior in your product that indicates they’ve had a good experience and are likely impressed. They are the users who are more inclined to explore your product further. They’ve moved past the curiosity stage and have shown a deeper interest. It’s this interest that you should be capitalizing on to convert these product qualified leads to paying customers.

Collecting and tracking product qualified leads is a fundamental aspect of product-led GTM. With this approach to launch, you’re letting your product do the talking. It’s the main driver for your acquisition and success, so tracking PQLs lets you understand how well that approach is performing. Is your product effectively qualifying leads, converting visitors into engaged users who are likely to buy?

Now don’t just think that every user who interacts with your product can be considered a product qualified lead. Simply signing up for your free trial doesn’t make them a PQL. Instead, a product qualified lead is a lead who has hit a certain activation point. That activation point is a predetermined milestone that indicates that a user is likely to have experienced the product’s wow moment and understands the value proposition. That is what promotes a lead to a product qualified lead. What this milestone is is all down to you. 

What makes a product qualified lead?

The process of identifying product qualified leads is more like awarding a medal of recognition. Think of it like a scout earning a merit badge. Users aren’t changing into something new, but through their actions – like completing specific tasks or reaching certain milestones – they demonstrate they’ve mastered key aspects of your product. Just like a scout earns their badge for tying a knot or starting a fire, a user earns the PQL label by showcasing that they’ve unlocked the product’s core value. Identifying a user as a product qualified lead is a way of ecognizing the user’s engagement, not changing who they are, and positioning them for the next step: becoming a paying customer.

Essentially, a lead who is trying your product becomes a product qualified lead when they’re ‘hooked’ into your product. They’ve experienced the wow moment and are in a position where they’re more likely to become a customer than they are to drop off. 

But here’s the thing, the criteria that make a product qualified lead for you might be different for a competitor. Heck, your PQL criteria might be different from one quarter to the next. Many things can signify that a user trying your product is ready to be declared a product qualified lead. Some examples of qualification criteria include: 

• Hitting your value metric: The value metric is a key behavior or usage milestone that correlates with customers who are likely to buy or upgrade. This behavior shows active engagement and suggests the user is gaining real value from the product.
• Completing key actions: Every product has certain actions that signal when a user is getting deeper into the experience. For some, it might be inviting new users, setting up an integration, or using specific features.
• Hitting usage milestones: Some teams define product qualified leads based on hitting specific thresholds. This could include completing a number of tasks or achieving a milestone in product usage.
• Time spent or repeat usage: Time spent within the product or frequent logins can indicate that a user is finding value. The more often they return to the product, the higher their likelihood of converting.

The value metric (or metrics) you use to qualify new users and promote them to a product qualified lead, don’t need to be set in stone. It can change over time as your product grows and business objectives shift. For example, if you introduce new features, behaviors that signify a product qualified lead may need updating.

The best way to refine your PQL definition is by using data. Look for patterns that correlate specific behaviors with conversions, and adjust your criteria as your product evolves.

Examples of product qualified leads

Sometimes, the best way to explain something is to show examples. Let’s take a look at some real-life criteria for a product qualified lead from a couple of companies. These are examples are solid qualification criteria that demonstrate that a user has seen the value of the product and are in a good position to stick around. 

Slack: 2000 messages limit

For Slack, a product qualified lead is identified when an account has sent 2,000 messages. This threshold signifies that the user is actively engaging with the platform and has likely integrated Slack into their daily workflow. 

By reaching this point, users have experienced enough value from the product and have seen the benefits – such as improved team communication and collaboration – and are now more inclined to upgrade to a paid plan for additional features and unlimited message history. This approach helps Slack identify potential paying customers and informs how they reach out to them and encourage them to upgrade. 

Of course, Slack isn’t passive in getting users to that 2,000 messages milestone. They’re actively encouraging this through their onboarding and referral program. By having more people to message, the more messages you’re likely to send. A new user’s early experience is all geared to help them reach that 2,000 message threshold as quickly as possible.

Dropbox: Desktop download

For Dropbox, a product qualified lead (PQL) is identified when a user engages with several key features, such as signing up for the free plan, installing the desktop app, and uploading files. Dropbox knows that once a user stores a significant amount of files or starts syncing across devices, they’ve experienced the core value of the product. When users begin to approach the storage limit of their free plan, that’s when Dropbox knows they have them. They become strong candidates for conversion to a paid plan that offers more storage and advanced collaboration features.

By focusing on these engagement points, Dropbox effectively qualifies leads who are most likely to upgrade. The idea is that if users are already benefiting from Dropbox’s functionality, like file syncing and backup, they’ll feel the need for premium features such as larger storage, file version history, or advanced security options.

Dropbox also encourages users to reach these milestones through onboarding, tutorials, and referral programs. For instance, users are incentivized to invite friends, which not only increases their storage limit but also enhances the product’s collaborative value. The more files and users in a team or personal account, the higher the likelihood they’ll surpass the free tier, increasing the chance of conversion to a paid plan.

How do you convert a user to a product qualified lead?

Promoting a lead to a PQL doesn’t just happen on its own. You need to put in the hard yards as a Product Manager to engage your new users and guide them toward those qualifying behaviors. Just like a farmer, you need to sow the seeds and develop your product in a way that’s conducive to growing these types of leads. 

Here’s a quick rundown on the type of stuff you should do to increase your chances of getting those juicy product qualified leads and boosting your customer numbers.

Offer a freemium model or free trial

To get a product qualified lead, you need to allow users to explore your product in some way. If you lock it all behind a paywall, there’s no opportunity for them to fiddle around with your product and see the value. 

The simplest way to start generating product qualified leads is to offer a free version of your product. A freemium model or time-limited free trial allows users to experience the product’s core value without having to part with any cash. You could also try a reverse trial. This reduces the barrier to entry and is a great tactic for PMs that want to adopt product-led growth, where the product does the selling for you.

Onboarding and guidance

To get a product qualified lead, you want your users to reach that user activation/value metric milestone. To help users reach this point quicker and reduce your time to value, you need to develop your onboarding in a way that promotes product exploration and pushes users to engage with the product in a way that you want. 

Provide an engaging and seamless onboarding experience that highlights key product features. Use in-app tutorials, tooltips, and build a killer product tour to guide users toward actions that demonstrate the product’s value. This can fast-track users to becoming product qualified leads.

Track key activation metrics

A user only becomes a PQL if you notice them. If you’re not tracking the right activation metrics, or are looking in the wrong places, then you may never spot the truly engaged users who are ready and waiting to become customers. You wouldn’t hunt deer in the ocean, so make sure you’re tracking the right metrics and behaviors that single out strong product engagement.

This point goes beyond just product qualified leads. With everything you do, you need to ensure that you’re keeping an eye on the appropriate metrics. With there being a lot out there, it can be confusing to know which ones are best. We’ve put together a full list of the best metrics and KPIs to track. Download our eBook and take a look 🔽:

Highlight key features early

All your users are like tourists to your own unique country. They’re keen to see all the major attractions and destinations, but won’t be able to find them without a map or direction. In your product, you should focus on highlighting your key features early. Make them easy to discover and explore so that they see the best that you have to offer. 

Single out your hot-ticket features with slideouts, pop-ups, and hotspots to get users’ attention. This can help you convert users into product qualified leads and make these visitors think more about staying put and settling down in your country. 

Offer customized incentives

Got users hovering agonizingly close to the activation point? You can give them a little push through customized incentives that give them another reason to complete the value metric and convert to a PQL. This is like giving an energy gel to a marathon runner, giving them that vital burst to help them cross the finish line.

By offering discounts or rewards for completing the action you want users to do, you can improve your chances of turning them into product qualified leads. For example, offering an extended trial can be all it takes to nudge a user over the edge.

Why do you want product qualified leads? 

We’ve spoken a lot about how to turn your average users into product qualified leads, but why the fuss? What’s the point of going to all this effort? Well, the biggest reason why you want to generate PQLs is because these leads are super likely to become customers. Compared to more traditional lead types, like sales or marketing qualified alternatives, PQLs are way more likely to convert and become paying customers. On average product qualified leads have a high conversion rate of around 15-30%, making them the cash cow you want to milk for all it’s worth. 

Remember, PQLs have already experienced your product. They’ve seen what makes it good, and have used it to a point where it’s clear they love it. From here it’s an easy sell to get them to stick around and become die-hard fans. 

PQLs don’t require the extensive sales pitches or nurturing that MQLs and SQLs need, making them less resource-intensive and often quicker to push down the funnel. If you imagine your leads as gold in a mine, product qualified leads are nuggets of platinum. 

Plus, product qualified leads are a core metric for tracking product-led growth, one of the more successful growth strategies in Product Management. It’s an essential component of this tactic, ensuring that your product delivers value from the get-go.

What should you do with a product qualified lead? 

You’ve got a product qualified lead – now what? Well, your goal now should be to turn that PQL into a paying customer of your product. They’ve taken a bite of the apple and seemed to have enjoyed it, and now you’re working to get them to eat the whole thing, seeds and all. 

But how do you do that? Well, that’s the million-dollar question. To this day Product Marketers are trying to figure out the best way to turn PQLs to fully-fledged paying customers. There are many ideas on how you’d go about it.

Here’s a look at some of the things you can be doing with your product qualified leads to help turn them into lucrative customers.

• Personalized outreach: Send context-driven emails or messages based on each user’s product usage. Personalization makes the conversation more relevant and meaningful since PQLs have already engaged with your product.
• Customize your sales approach: Equip your sales team with insights about the PQL’s product behavior. Focus sales conversations on enhancing their experience or solving unmet needs rather than basic introductions.
• Offer specific demos or consultations: Invite your product qualified leads to a demo that focuses on the features they’ve used and their pain points. These bespoke demos that solve specific needs increase the chances of conversion.
• Provide strategic upsell opportunities: Introduce premium features or higher plans that solve problems they may not have encountered yet. Upselling should feel like a natural progression rather than a hard sell.
• Engage with Customer Success or Support Teams: Have Customer Success Teams offer proactive support or tutorials. Addressing barriers early on can help your product qualified leads see the value of upgrading.
• In-product nudges or alerts: Use in-product notifications to remind PQLs of unused features or encourage upgrading. Contextual nudges push them toward premium features or subscriptions.
• Time-sensitive offers or discounts: Send a limited-time discount to encourage quick conversion. Product qualified leads are close to making a decision, and a special offer can provide the final push.

The leads that love you 

Product qualified leads are kind of like the love interest that’s playing hard to get. They definitely have a crush on you and your product, but are waiting for you to make the move to start the relationship. Product qualified leads have seen your product at its best, and have already used it to solve their pain points and fulfill their needs. They’ve seen the value of your product, which puts you in a very powerful position to turn these leads into paying customers. 

By honing in on these leads and using tactics like personalized outreach, onboarding designed for each PQL, and strategic upselling, you can hook these users in and ensure that they never leave.  

Did you know that you can try ProdPad for free? With our free trial, you can explore all the key features of our tool commitment-free, giving you the chance to see what we’re all about without having to part with any cash. Give ProdPad a go today – we’re confident that you’ll fall in love with it.