DavidThe SaaS landscape has undergone a paradigm shift since the arrival of Product-Led Growth (PLG) changing the way businesses acquire and retain customers. This approach has disrupted traditional marketing and sales methods by emphasizing the product's value and user experience as the primary driver for growth.
Product Qualified Leads (PQLs) have displaced Marketing Qualified Leads (MQLs) as the preferred metric for gauging customer engagement and purchase intent. This article will explore how PLG has transformed the SaaS world by shifting the focus from MQLs to PQLs and the implications this change has for businesses seeking sustainable growth.
MQL Acquisition Model
The traditional MQL acquisition process happens outside of the product where Marketing is typically held to a certain quota for leads and MQLs. SDRs are responsible for working MQLs and generating sales-qualified leads (SQLs) for their account executives. AEs then focus on converting these SQLs into paying customers and then pass them to the customer success team, whose task is to onboard newly acquired customers and ensure they become active and loyal customers.
PQL Acquisition Model
A modern SaaS company using a PLG strategy shifts this to make the product a key part of the acquisition process. This method considerably shortens the time it takes for potential customers to access the product with the goal of pushing people to a free trial/signup.
Companies adopting this strategy tend to place less emphasis on the customer lifecycle aspects outside of product engagement (lead, MQL, SQL, etc) and rather where product behavior plays a crucial role in guiding customers through the lifecycle. As you can see, content is a consistent channel throughout both models proving the importance of content marketing regardless of model chosen.
When using PQLs instead of MQLs, sales teams can confidently identify “good fit” or “high-intent” users without any guesswork since they can leverage product usage data. Because of this, PQLs are much more likely to convert than MQLs.
❌ MQL Acquisition Model | ✅ PQL Acquisition Model |
Companies use a traditional GTM strategy with gated content and vanity metrics | Companies use a product-led GTM strategy driven by product usage and analytics |
Teams focus on generating leads and MQLs and then nurturing outside of the product | Companies drive prospects to signup/trial and then engage and nurture until they’re ready to buy |
SDRs and AEs focus on SQL qualification and closing deals with limited actionable insight into product usage | SDRs and AEs streamline process and workflow, driven by insights on how prospects use and engage inside the product |
Reduce Onboarding Friction
Auth0 is a great example of a company using the PQL model. Their north star metric is driving prospects directly into the product where they control the onboarding process and gather significant product usage data which allows them to run nurture campaigns based off of signals and milestones.
They do an amazing job getting prospects to their first “ah-ha” moment by guiding them step-by-step via a simple wizard. You download a sample app and then run the steps shown to the right.
They have a somewhat complicated self-serve product which makes abandonment a real issue but the way that they catered it to their developer persona is one of the main reasons it’s so successful.
Your Product is Your GTM Strategy
Adopting a product-led GTM strategy offers essential product usage insights for delivering personalized experiences that help move prospects and customers from one stage of the funnel to another. These insights can also assist product teams in understanding the most valuable features and optimizing their products further.
It’s your blueprint for acquiring, retaining, and growing customers. To achieve success with this method, all teams must align around relevant goals and metrics while being equipped with the right tools and data. Marketing's primary job becomes getting prospects into the product rather than generating leads. Salespeople will then have to sell through the product. This will ultimately lead to a lower CAC, accelerate trial-to-conversions, and increase CLV.
PQLs Should Replace MQLs
PQLs offer a more accurate and reliable indication of a prospect's intent to purchase and are based on actual product usage and engagement, demonstrating firsthand experience with the product's value. MQLs are derived from marketing interactions (whitepaper download, webpage visits, webinar attended, etc), which may not reflect genuine interest. By focusing on PQLs, businesses can prioritize higher-quality leads, leading to improved conversion rates, customer satisfaction, and long-term growth.
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