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This write-up discusses whether product-qualified leads will replace marketing-qualified leads in SaaS.
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.
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.
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.
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.
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:
Now, let’s have a quick look at the strategies you can adopt to fully utilize PQL and increase your sales revenue manifolds.24
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.
Lakshmi Kshatriya is a customer success professional with over 18 years of experience in business operations, business development & account management in diverse industries like information technology & entertainment. She has been implementing marketing strategies; analyzing trends and results for improved customer success.
Published 11 Mar 2022, Updated 11 Mar 2022
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