This is a guest post from Priya Bhatia, Growth PM Lead at 7Shifts. The post was originally published on her Substack and shared here with her permission.
How to decide when to implement PQLs and PQAs
Are you an early-stage founder, startup, or a scale-up wondering what you need todo to jump on the PQL / PQA bandwagon? After all, you just started to lean into Product-Led Growth. When could you / should you do Product-Led Sales?
Product-led sales relies on PQLs /PQAs as a lead-scoring methodology to improve sales outreach and generate higher ROI on your product-led efforts.
PQL = Product Qualified Lead, PQA =Product Qualified Account.
NB: Priya has previously written about PQLs and PQAs here and we've written about PQLs extensively as well.
There isn’t a clear-cut answer to this, but it depends on the following:
- The size of your lead funnel
- The maturity of your product and sales teams
- The resources you can expend
What is the size of your lead funnel?
Assuming you have a free trial or freemium product, at what point you lean into product-led sales depends on the size of the lead funnel.
Early stage: If you’re in early stages where you’ve found PMF and havean early sales team, it might be a good approach not to complicate things anduse your product activation metrics as a product-qualified lead (PQL), i.e.,customers who have experienced the value and are engaged within the product,are promising leads for the sales teams to reach out to. This definition of PQL can also be used in Lifecycle messaging. The goal is to start with a definition, operationalize it and refine it as you go.
Mid-size: For a mid-sized company with distinct sales, marketing, and success teams, the above definition of PQL can further evolve to capture high-intent accounts with more product usage or engaged users. A good approach to building a PQL proof of concept could be with the Customer Success team. In a mid-size company, you are probably looking to expand the customer use cases, drive the expansion of paying accounts, and have decent product-usage data to leverage.
Rapidly growing: These companies probably have a large ICP lead funnel that the sales team cannot keep up with. This is where an advanced PQL / PQA strategy might work the best. It would require building multiple PQL playbooks segmented by user persona, user journey, or account size.
What is the maturity of your Product & Sales teams?
Starting on the product-led sales journey comes down to the goal. Are you looking to expand users in different areas of the product, driving free-to-paid conversion or expanding into an enterprise segment? Your product and sales maturity has a role to play.
Product: The maturity of your product defines when you should engage in advanced PQL strategies. E.g., if you have collaboration software, are there multiple user segments, e.g., product managers & designers? Are there multiple products catering to different users or use cases? Expanding users to other use cases could benefit from advanced PQL strategies.
Sales: Similarly, what is the mandate of the Sales teams? Is it driving free-to-paid conversion or driving upmarket growth? SMB customers might be able to self-serve or use PQL based Sales-Assist model, but enterprise expansion can benefit from a PQA strategy.
What resources can you allocate?
Ultimately, building a successful product-led sales motion depends on the resources you can spend, which is a function of the above. A solid data infrastructure and a robust cross-functional alignment is a pre-requisite to make this strategy work.
Data Infra: Even when you're just starting, building a unified data architecture and systems should be a high priority if you want to see any success with your product-led efforts. Product usage data can be piped intoSalesforce fields in the early days to target sales outreach. But it can get complicated as you grow. This is where tools like Correlated help to streamline data and surface product signals that help target better sales outreach.
Cross-functional alignment: Operationalizing PQLs and their success require continual iteration, which, in turn, involves product, data, sales, and success teams working very closely together. As your company matures, it might be valuable to bring together a tiger team to create a PQL definition and playbook and operationalize and test it before expanding to multiple PQL playbooks.
A well-functioning PLG motion is a pre-requisite for the PQL/ PQA strategy to work. That said, I’d like to believe it has more significant opportunities in the sales-led organizations - specifically in enterprise expansion use cases.
If you're interested in learning more from Priya, you can subscribe to her Substack here.