Qualification Games: A Glimpse Of PQLs

Qualification, or leads qualification, refers to determining which potential customers are most likely to make an actual purchase. It is essential because it saves time and energy and allows the marketing and sales teams to make a concentrated effort to increase revenue. Human resources are limited and have to be managed effectively in any given situation.

Imagine a Cybersecurity sales development representative reaching out for a Yoga instructor with an offer to purchase subscription. The new lead is not qualified since the company doesn't have any products to fulfill the Yoga instructor's needs.

Qualification is not software exclusive. People who sell goods try to qualify potential customers to create more revenue effectively. Qualifying potential customers can save tons of time and resources. Otherwise

we may spend too much resources on potential customers who do not want to buy the product.

Back to software. Traditionally, the marketing and sales teams do the process of qualifying leads. There are plenty of frameworks to qualify new opportunities, but the baseline is as follows:

• Use a scoring model to predict the likelihood of a potential customer becoming a paying customer.

• Marketing lead qualification scoring is based on the potential customer's engagement with the marketing materials.

• Sales lead qualification scoring is based on sales criteria such as the potential customer's job title, organization, willingness to buy, responsiveness, market segment, etc.

Why is Qualification so crucial for startups?

Startups are different animals from mature businesses. Startup has huge uncertainty about the ideal persona or customer, and it constantly changes. Moreover, early-stage ventures are still fine-tuning their business model. Qualification has a significant role in this process since it spotlights how potential customers react to the current offering.

As a result, Qualification has a significant impact on early-stage startups. They aim to create hyper-growth organizations, and to do so — they have to understand their target audience and accurately find their ideal customer. When Qualification is done right in the early stages, it affects the revenue's bottom line and the perception of who the ideal customers are and what value they look for when using the product. That way, startups can accurate their messaging and develop the right features.

In the past, adopting new software could take months or even years, and the selling process was very long and was focused primarily on CIOs and executives. Today, trying new software is just a few clicks away. More and more companies allow users to sign up for a freemium or trial version of the product and feel the value in using it. Over the past few years, there has been a significant shift in the software world.

It means that Product Usage is an essential part of buying the software!

Does it affect Qualification? Absolutely yes. Think about it: potential customers use products before purchasing them, and they can see the functionality and evaluate what impact those products will have on their day-to-day lives. As software products will become more and more accessible and easy to try and buy, the process of Qualification will shift to the product itself.

This major change is called Product Qualified Leads. Product qualified leads (or PQLs) are potential customers who have used the product, experienced meaningful value, and are more likely to become paying customers. In practice, each one of the potential customers gets a score based on how they used the product — features, frequency, integrations, etc.

Using PQLs as the leading resource of Qualification is not new, but it has grown exponentially over the last year or two. Companies join the Product Led Growth motion one after another and offer free trials and freemiums to potential customers. They shift the Qualification's center of gravity towards the product by doing so. It doesn't make sense to score potential customers according to the interaction with marketing materials if they're already using the product. Right?

Here are some tips for creating Product Qualified Leads models within your organization:

• Find the main features in use during the trial or freemium period. Use your past data to find correlations between these features and potential customers who converted successfully.

• List the primary "investments" potential customers have in the product (data import, integrations).

• Segmentize potential customers. Different personas use other features, and as long as you accurately match personas with product usage, you have a better scoring model.

• Explore who the best customers are (more considerable Lifetime Value, lower churn rate — you name it) and how they use the product. Apply their behavior to newcomers and try to find similarities.

• Is the product built for teams? If so, track all the team-related metrics—for instance, team invitations and messages between team members.

In a world where companies' growth is led mainly by the product itself, you can expect PQLs to become an essential part of the Qualification.Startups who try to push their way to become sustainable businesses have to qualify their potential customers wisely. The sooner, the better. Best qualifiers win.

Are you interested in learning more about PQLs? Here's an excellent guide for PQLs.