Are Product Qualified Leads (PQLs) Replacing Marketing Qualified Leads (MQLs) In SaaS?

Are Product Qualified Leads (PQLs) Replacing Marketing Qualified Leads (MQLs) In SaaS?

This write-up discusses whether product-qualified leads will replace marketing-qualified leads in SaaS.

Product qualified leads vs Marketing qualified leads
Product qualified leads vs Marketing qualified leads

For years B2B companies have relied on marketing qualified leads (MQLs) for executing their inbound sales funnel. MQLs are still being used as a way to determine prospective customers’ buying intent. But, over the past few years, a new concept is getting highlighted in the conversations of inbound marketing teams. The new buzzing term is product qualified leads (PQLs). There are some researches that suggest that product qualified leads (PQLs) have the potential to generate ten times more revenue than marketing qualified leads (MQLs).

So, the question that is driving attention is whether Product Qualified Leads (PQLs) are replacing Marketing Qualified Leads (MQLs) in the SaaS market?

Let us try to figure out the answer together.

What are Product Qualified Leads (PQLs) and Marketing Qualified Leads (MQLs)?

Before we dive deeper into our original question, let us first understand the two concepts so that we can clearly differentiate between them.   

Product Qualified Leads (PQLs), in simplest terms, are leads (aka potential customers) that have been using a free version of a SaaS product and have taken some action and are likely to become a loyal customer. On the other hand, Marketing Qualified Leads (MQLs) are leads or potential customers that have been reviewed by marketing teams and they fulfill the criteria set by them which indicates that they are most likely to start using the company’s SaaS product. Potential customers satisfying the criteria set by the marketing team are passed along to the sales team.

While criteria for identifying a potential customer through PQL depends on their engagement with the SaaS product of the company the criteria for MQL is dependent on the users’ engagement with the educational and engaging content produced specifically for inbound marketing.

Isn’t MQL Model Working Anymore?

You might wonder whether the MQL model isn’t working anymore in the market. And if it’s working why is it being replaced by the PQL model?

Well, marketing qualified leads have been generating satisfactory results for years now and they are still not obsolete. In fact, the primary inbound marketing strategies for most SaaS businesses are still built around marketing qualified leads.

Businesses are still creating content to attract and engage audiences and gradually bring them down in the inbound sales funnel. The MQL model identifies the buying intent of potential customers based on the type of content the lead is engaging with.

The MQL model starts with visitors who are converted into leads, then SQL, opportunity, and then finally customers gradually coming down the sales funnel. This is the way inbound marketing has been working for years and it’s still generating results.


PQL model is showing greater possibilities of results when compared with the MQL model. As discussed earlier, some research in inbound marketing are suggesting that the PQL model can generate ten times more revenue than the MQL model.

Should You Weave Product Qualified Leads into Your Inbound Marketing Strategy?

By now it must have been clear that if you rely solely on finding the type of content a lead is engaging with, you can overlook many potential customers giving a clear indication that they are willing to pay for your product. So, it would be a wise decision to divert some resources and attention to focus on data showing user engagement with your SaaS product.

In addition to digging data about user engagement with your content, you should also have an eye on the data showing user engagement with your product. If you closely observe your product and user engagements with its various features you can figure out criteria that indicate that a lead is ready to convert and pay for your product.

Adding PQL into your inbound marketing strategy can prove to be a game-changer for your business. It cannot only increase the conversion rate but also keep the cost of acquisition low thus providing the opportunity to scale your business with greater revenue efficiency. PQL strategy helps businesses determine focusing on which customer can be more rewarding.

However, it isn’t necessary to see PQL as a replacement for MQL. You can consider it as a gap-filler instead. Product qualified leads addresses the shortcomings of the old marketing qualified leads by optimizing conversion rates by tracking reliable indicators for future purchase and upgrades.

How are PQLs better than MQLs?

MQLs need to be pitched in by contacting external customers.PQLs are internal acquisitions that do not require any contact with external customers.
MQLs are more useful for demo requests.PQLs are more useful for freemium products.
It is quite difficult to gauge the actual user of the product.The buyer is the user in case of PQLs.
MQLs are promising leads and are more likely to become a paying customer than a cold lead.PQLs are potential customers who have already had a positive interaction with your software.
MQLs are based on feature based or tiered pricing.PQLs are based on usage based pricing.

Now that we have looked at the difference between MQLs and PQLs, it is time to look at how PQLs are better than MQLs.

While you could be using PQL and MQL models together, there are few marketers who see PQL as a better alternative to MQL and they strongly believe that MQL should be replaced by PQL. Without a doubt, recent studies and research are indicating advantages of PQL over MQL.

The following are the major advantages of product qualified leads:

  • PQL provides deeper context into the lead – Unlike marketing qualified leads, PQL focuses on leads using the product rather than those engaging with content. A user’s interaction with a SaaS product provides more reliable data about the problem and intention of the target audience. The insights provided by the data regarding the use of SaaS product gives a clearer picture and deeper context into the lead. It is more helpful for a seller to approach leads that are easier to convert.
  • PQL makes the sales team more focused – There’s no denying the fact that the MQL model is a cumbersome process that generates heaps of data to be dug by the marketing and sales team. The huge amount of data can sometimes be overwhelming, if not misleading, for the sales team. As the PQL model is focused on product usage it generates lesser and more focused data thus keeping the sales team more focused on converting prospective customers.

Making Product Qualified Leads Work for You

Now, let’s have a quick look at the strategies you can adopt to fully utilize PQL and increase your sales revenue manifolds.

  • Chalk Your Criteria for PQL – The first thing for implementing the PQL model effectively is finding out the criteria indicating the potentials of conversion. You need to scrutinize data related to your product usage and find out what features and levels of usage indicate a higher probability of lead conversion. For finding out your PQL criteria you can visualize your ideal successful customer and work backward to find their product journey.
  • Prioritize Your Product Qualified Leads – You need to accept and embrace the fact that not everyone using your free trial product is a potential customer. So, it is important for you to prioritize the leads on whom you will be focusing your attention. Suppose you provide your service within a geographical boundary, you do not need to pay attention to leads falling out of that boundary. Similarly, if you are a B2B SaaS company focusing on a certain size of business you need to ignore other sizes of businesses testing your free trial. Prioritize and focus on leads that are actually your potential customers.
  • Target Leads with Right Message at the Right Time – A wrongly formatted message or a right message delivered at the wrong time can ruin the chances of conversion. Instead of sending everyone the same custom message without considering the time you should work on identifying the right person and the right time and create the right message for them. And, remember to create a personalized message to make the customer feel that you are connecting to them directly and they have not received an email or a message sent to everyone. Customized messages reaching the right person at the right time can bring magical results.

Final Thoughts

Whether the MQL model will be completely replaced by the PQL model or not is only known to the future. In the present, the wisest decision is to start implementing PQL strategies alongside the traditional MQL model. PQL model is a promising strategy that is generating amazing results for SaaS businesses and you should not be left behind. The earlier you adopt the strategy the better you will be positioned against your competitors. It’s quite possible that you start getting so much benefit using product qualified leads that marketing qualified leads automatically get replaced. But, till then you need to gradually shift your attention and resources towards PQL.   

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