Product-Led Fundamentals

The Most Common Types of PQLs at Product-Led Companies

Top product-led sales teams leverage multiple types of PQLs. This helps sales reps personalize outreach based on user activity and goals.

Joanna Huang

June 13, 2022
·
3
 min read

Product-led sales is about selling into your current user base. This sales motion leverages indicators like customer fit and product signals to qualify users as product qualified leads (PQLs). In part one of our PQL guide, we went over what PQLs are and why they matter—you may want to first dive into that if the concept of a PQL is new to you.  

While user intent signals vary by company and product, we've found that there is a standard pattern for PQLs across product-led companies.

In this post, we'll cover:

🤔 Why product-led companies have multiple PQLs

⭐️ The most common types of PQLs

By the end, you'll have ideas of how to create, prioritize, and target different types of users.

Why do product-led companies have multiple PQLs?

Mature product-led sales teams tend to use more than one PQL. The reasons for defining different types of PQLs are simple:

Multiple conversion points

Most organizations have multiple conversion points. For example, SaaS companies often separate GTM motions between landing new customers and expanding current customers. Segmenting PQLs helps to ensure each conversion point is properly routed and personalized to the user.

Multiple customer segments

Differentiating PQLs helps to account for multiple customer segments. Sometimes you need to route leads to subject matter experts who understand the persona and department (revops vs product team). Other times, the segment is divided by company size (mid-market vs enterprise).

No touch, low touch or high touch sales

Product-led sales is a hybrid sales model—meaning there are options for no touch, low touch, and high touch sales depending on how much hand-holding is required. Time investment depends on deal potential. A low fit lead can be completely no touch/self-serve. For an extremely high fit lead, it might be worth reaching out and building a relationship from the very beginning.

Each new PQL category can increase the complexity and resources involved in your pipeline. When evaluating whether to create a new PQL, consider whether it increases conversion rates through a well-tailored customer experience and clear team incentives. Your team will also need a scalable product-led sales platform such as Calixa to handle different PQL views and routing. Investing in a PLS platform can automate a lot of this complexity so you can focus on selling.

Four most common types of PQLs

Here are four common PQLs types found at product-led companies.

  • Free-to-paid conversion
  • Team/seat expansion
  • Enterprise conversion
  • Enterprise expansion

These PQLs are ordered by deal size (small to large revenue potential). The user type and business case is very different at each stage. Below we go over each of these PQLs and exactly how they benefit from sales.

Free-to-paid conversion

This conversion point is the bread and butter of product-led sales. It is crucial to monetize signups from the product-led flywheel. Sales reps prospect to free users who are receiving value from the product and likely want additional features or usage, and gently nudge them to pay. Free users might be hand raisers asking for more information (how pricing works), or simply users who reached a product usage threshold and are ready to buy.

Team/seat expansion

These are users who have specifically experienced the collaborative nature of the product. Sometimes a sales rep or onboarding specialist will be there to guide a newly upgraded team. Sales reps are product evangelists who understand the network effects of each additional team member that gets added on the team plan.

Enterprise conversion

This conversion requires meeting executive buyers to negotiate a custom SLA. The account executive's pitch consists of two components: enterprise-level security and compliance, plus user-level new features and integrations. Enterprise security and account consolidation are table stakes, but advocating for the end user is equally (if not more) important because they do internal selling for you. Equip the end user with a thoughtful business case, and they'll become a product champion.

Enterprise expansion

At this stage, account executives will continually grow the product(s) into new departments and new use cases. They'll implement an organization-wide, wall-to-wall rollout plan if possible.

For enterprise conversion and enterprise expansion PQLs, it is useful to rollup individual users into a Product Qualified Account (PQA) view. Alternatively, you can see PQLs progress along deal board stages—from the first free user to higher paid plans—using Calixa's Journey View. The platform lets sales reps to easily define, view, and route all these PQLs.

As you can see, each PQL above requires a different selling motion. Your first free user may call for a low touch sales-assist, while large accounts require layering in top-down sales. That's why having visibility into PQLs within your user base is critical to selling well.

If you're feeling inspired to create PQL segments, here's how to create and prioritize PQLs with Calixa.

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Product-Led Fundamentals

The Most Common Types of PQLs at Product-Led Companies

Joanna Huang
|
Product Marketer
|
Calixa

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June 13, 2022
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Product-led sales is about selling into your current user base. This sales motion leverages indicators like customer fit and product signals to qualify users as product qualified leads (PQLs). In part one of our PQL guide, we went over what PQLs are and why they matter—you may want to first dive into that if the concept of a PQL is new to you.  

While user intent signals vary by company and product, we've found that there is a standard pattern for PQLs across product-led companies.

In this post, we'll cover:

🤔 Why product-led companies have multiple PQLs

⭐️ The most common types of PQLs

By the end, you'll have ideas of how to create, prioritize, and target different types of users.

Why do product-led companies have multiple PQLs?

Mature product-led sales teams tend to use more than one PQL. The reasons for defining different types of PQLs are simple:

Multiple conversion points

Most organizations have multiple conversion points. For example, SaaS companies often separate GTM motions between landing new customers and expanding current customers. Segmenting PQLs helps to ensure each conversion point is properly routed and personalized to the user.

Multiple customer segments

Differentiating PQLs helps to account for multiple customer segments. Sometimes you need to route leads to subject matter experts who understand the persona and department (revops vs product team). Other times, the segment is divided by company size (mid-market vs enterprise).

No touch, low touch or high touch sales

Product-led sales is a hybrid sales model—meaning there are options for no touch, low touch, and high touch sales depending on how much hand-holding is required. Time investment depends on deal potential. A low fit lead can be completely no touch/self-serve. For an extremely high fit lead, it might be worth reaching out and building a relationship from the very beginning.

Each new PQL category can increase the complexity and resources involved in your pipeline. When evaluating whether to create a new PQL, consider whether it increases conversion rates through a well-tailored customer experience and clear team incentives. Your team will also need a scalable product-led sales platform such as Calixa to handle different PQL views and routing. Investing in a PLS platform can automate a lot of this complexity so you can focus on selling.

Four most common types of PQLs

Here are four common PQLs types found at product-led companies.

  • Free-to-paid conversion
  • Team/seat expansion
  • Enterprise conversion
  • Enterprise expansion

These PQLs are ordered by deal size (small to large revenue potential). The user type and business case is very different at each stage. Below we go over each of these PQLs and exactly how they benefit from sales.

Free-to-paid conversion

This conversion point is the bread and butter of product-led sales. It is crucial to monetize signups from the product-led flywheel. Sales reps prospect to free users who are receiving value from the product and likely want additional features or usage, and gently nudge them to pay. Free users might be hand raisers asking for more information (how pricing works), or simply users who reached a product usage threshold and are ready to buy.

Team/seat expansion

These are users who have specifically experienced the collaborative nature of the product. Sometimes a sales rep or onboarding specialist will be there to guide a newly upgraded team. Sales reps are product evangelists who understand the network effects of each additional team member that gets added on the team plan.

Enterprise conversion

This conversion requires meeting executive buyers to negotiate a custom SLA. The account executive's pitch consists of two components: enterprise-level security and compliance, plus user-level new features and integrations. Enterprise security and account consolidation are table stakes, but advocating for the end user is equally (if not more) important because they do internal selling for you. Equip the end user with a thoughtful business case, and they'll become a product champion.

Enterprise expansion

At this stage, account executives will continually grow the product(s) into new departments and new use cases. They'll implement an organization-wide, wall-to-wall rollout plan if possible.

For enterprise conversion and enterprise expansion PQLs, it is useful to rollup individual users into a Product Qualified Account (PQA) view. Alternatively, you can see PQLs progress along deal board stages—from the first free user to higher paid plans—using Calixa's Journey View. The platform lets sales reps to easily define, view, and route all these PQLs.

As you can see, each PQL above requires a different selling motion. Your first free user may call for a low touch sales-assist, while large accounts require layering in top-down sales. That's why having visibility into PQLs within your user base is critical to selling well.

If you're feeling inspired to create PQL segments, here's how to create and prioritize PQLs with Calixa.