Defining PQL Criteria

The definition of a Product Qualified Lead (PQL) is not a one-size-fits-all concept; it can vary significantly between different businesses and even within the same organization over time. This variability is primarily influenced by two key factors:

Complexity of Your Product:

If your product is simple and easy to use, a PQL might be someone who quickly reaches key activation milestones with minimal guidance. However, for more complex products, where users need more time or support to understand and extract value, the criteria for being considered a PQL will be more extensive and nuanced. The more complex the product, the more steps and interactions might be required before a user can be deemed fully qualified.

Size of the Opportunity:

The potential revenue or strategic value of an account also plays a significant role in defining a PQL. For larger opportunities, a lead might be considered qualified earlier in their journey because the stakes are higher, and the effort to convert them is more justified. Conversely, for smaller deals, the lead might need to demonstrate more engagement or progress before being classified as a PQL.

For every PLG product (think free trial or freemium), the sales process has two key phases: automation and manual intervention.

Automation Phase: The goal here is simple—help new accounts get as much value as possible on their own. This means designing a seamless UX, using automated onboarding prompts, and sending a series of onboarding emails. Let users self-serve their way to conversion.

Manual Intervention Phase: This kicks in once a user or account hits a specific Activation level, making them product qualified. But what’s that level? That’s where defining your PQL criteria comes in.

If you’ve followed along so far, you should have a system in place for tracking, measuring, and scoring your accounts. Now, it’s time to tackle the next challenge: creating a process to convert these leads into paying customers.

To build an effective PQL process, you need to:

1. Define the criteria that make someone “product qualified.”

2. Establish guidelines for turning these leads into customers.

Ready? Let’s dive in!

1. How Complex is Your Product?

When customers ask how to design their PQL process, the first question we pose is: How complex is your product? In other words, how difficult is it for a new user (or a small group of users) to reach first value on their own, without any manual support from your team?

The answer to this question is the foundation of your PQL definition. It determines how Activated an account should be before your team steps in. For this guide, we categorize products into three levels of complexity. If you're unsure where your product fits, consider how many of your last 10 signups were able to self-serve their way to first value.

2. How Big is The Opportunity?

Once you've gauged the complexity of your product, the next step is evaluating the size of the sales opportunity. Not all trial signups are created equal—some may hold significantly more revenue potential than others. If a new trial signals a larger revenue opportunity, it's essential to involve your sales team early to capitalize on that potential.

The key is to categorize your trial signups into Small, Mid-Size, and Large revenue opportunities. This helps your team focus on the highest-value prospects and prioritize their outreach accordingly.

Many companies use the size of the company signing up for a trial as a proxy for opportunity size. While this is a solid starting point, you can define opportunity size based on whatever criteria make the most sense for your business—whether that’s company size, industry, or potential product usage. A customized approach helps ensure that you’re engaging with the right prospects at the right time.

"Categorizing trial signups by opportunity size helps your sales team focus on what matters—ensuring high-value prospects get the attention they deserve, right when they need it."

3. Putting It All Together with Activation

The more complex your product, the earlier your sales team should step in. Similarly, the larger the opportunity, the sooner your team should engage. It sounds simple, and that’s because it is. By combining these factors—complexity and opportunity size—you can craft a strategy to maximize your sales team's impact.

When you plot these factors against Activation Rate, it becomes clear how your resource allocation should align with opportunity potential. For larger deals, your sales team should engage when accounts have a lower Activation Rate, as the potential upside justifies early intervention. Conversely, smaller opportunities should be further along the Activation path before manual involvement.

Here’s how to think about it:

Key Takeaway: For simpler products, your team should wait until accounts are almost fully activated. However, with larger, more complex deals, early manual intervention is key—even at lower activation levels. Tailor your strategy to align sales efforts with both the product complexity and opportunity size to close deals effectively.