The evolution of SaaS means it’s out with the old way to sell software and in with a new “try-before-you-buy” business model. The same goes for how we qualify leads. No longer is the number of times someone visited a website or attended a webinar an adequate measure of a their likelihood to convert to a paid account.
Nowadays, the most accurate indication of an account’s likelihood to convert is their success with the product. This is why qualifying any lead needs to be based on how successful they are with a product before starting to pay for it.
This is why every SaaS operation needs a process for defining and engaging Product Qualified Leads (PQLs). (Good news! We’ve got an ebook for setting that up).
We have spent a great deal of time talking about Product Qualified Leads and that PQL process, but up to this point we have mostly addressed PQLs in the context of your Sales team, which makes sense. Product Qualified Leads are essentially today’s version of SQLs. These are leads that are ready for sales attention. Which is why we have focused on the Sales team to date.
But the reality is that the Product Led Growth model — and therefore an effective Product Qualified Lead process — calls for cross-functional effort and coordination. It is cliche to say that something in your business is a “team effort”, but in the case of a building and managing a PQL process, this is a legitimate claim.
But don’t run away form this fact — embrace it. Embrace the fact that a modern SaaS business can no longer operate effectively in traditional silos. We can no longer hide behind individual metrics and toss customers over our proverbial fences. The early customer experience, and the journey from TRY to BUY is defined by the efforts of several teams.
In this post, we will focus on the teams involved in building a solid PQL process and their respective roles in that process.
Which teams need to be involved in your Product Qualified Lead process?
What do we mean when we say “cross-functional”? Who is on your PQL squad? At the very least, it should be this crew:
Sales/Revenue Ops (if you have them)
I know what you’re thinking. Whoa! That’s a lot of people involved in one process!
Don’t worry. While each of these teams play a pivotal role in the process, their contributions fit perfectly within the scope of their regular work. Let’s take a deeper look into the role each team will play:
Product Team: The Gatekeepers
Obviously your product — and as a result, your Product team — is central to a PQL process. I mean, we’re talking about Product Qualified Leads here. These are leads that are qualified based on their engagement with the product. This means your Product team has a central role for two reasons.
First and foremost, the Product team is charged with building a product that, well, has value. But as it relates to PQLs, they also need to design and orchestrate a product experience that enables new signups to find their way to some level of value before requiring human support. This means good UX, in-product messaging, on-boarding flows, education, etc. This is the Product team’s most important contribution to your PQL process.
However, that’s not their ONLY contribution. Any PQL process is dependent on product engagement data. This data is required to build and define PQLs for your business. You need to know:
how much each account is engaging with the product;
And your Product team owns this data. That means they play an essential role in facilitating that the right product data it tracked, transformed into a usable format, and delivered to your team when and where they need it. While many Product teams won’t see this as part of their responsibility, it is.
As you can see, this whole process hinges on the Product team. They are The Gatekeepers.
Marketing/Growth Team: The Architects
When we say “marketing” here, we’re not talking about your typical, old-school lead-gen marketer. We’re talking about a more modern growth marketer that (a) can think and design for a complete customer experience; (b) is very comfortable getting her hands dirty with data; and (c) is adept at working in a cross-functional capacity.
This person will likely become the architect of your PQL program. She will play a major role in supporting the product team to build that great initial customer experience — from in-app messages, sign-up flows, on-boarding emails, and beyond — with the goal of driving as many PQLs as possible. She will also play a critical role in crafting the conditions that will define PQLs for your business and in building a playbook for addressing them in a way that works for your specific situation.
In short, she will likely be the one that brings all the moving pieces together and makes this process a reality.
If you have a Sales Ops team, they will sit right in the middle of your PQL process. Their role here is no different than their role in any lead qualification process. They will play a critical role in insuring that the PQL metrics are delivered to the right place so that your sales team can take appropriate action — quickly!
Sales Ops will ensure that your sales team spend less time digging for the right leads and more time interacting with qualified prospects.
Sales: The Closers
Their role is pretty clear. Their job is to take these precious leads from PQL status to closed deal. Bring ‘em home!
But they will also play an important role in defining – and refining – PQLs. Their feedback, from the frontlines, will help you understand if the way you are defining PQLs works effectively in their process and actually leads to more closed deals.
Customer Success: The Caregivers
In a PLG model, CS teams can play an essential role — not just post-sale, but pre-sale as well.
Yes, that’s right. In fact, in many cases, CS will play a more important role than a Sales team in converting accounts in a Product-led growth model. In a product-led growth model, prospects aren’t interested in being sold to. They are interested in getting value from a product. Your CS team specializes in making this happen and should be brought into the sales process as soon as possible. This function can have a huge impact on turning early users into PQLs.
Looking for a run-down? We’ve got you covered
Role in PQL process
– Helping to design onboarding and early user experience with the product – Defining PQLs for your organization – Designing customer engagement process for trial or free accounts
– Designing and building early customer experience that enables users to self-serve to some level of value – Generating and distributing key product data to enable a PQL process
– Make sure that sales team is aware of PQLs where they need them when they need them
– Help team define and refine the criteria for Product Qualified Leads – Close. Those. Deals!
– Help new users get to value with the product – drive PQLs!
One of the major benefits of building a PQL process is that in doing so, you are creating a truly collaborative KPI. There aren’t many metrics in a SaaS business that multiple departments can rally around. You always hear, “marketing owns this”, “sales owns this”, “customer success owns that.” The truth is that most KPIs live in departmental silos, driving more competition and in-fighting than cooperation. But Product Qualified Leads are a pure cross-department KPI. Everyone has a hand in driving Product Qualified Leads and can therefore can collaboratively rally around the metric.
For Marketing, high PQL counts mean that they are not only bringing in more leads but more of the right ones. Messaging, targeting, channels all working well, as well as the early user experience
For Product, strong PQL counts mean that new users are finding value in the Product AND are finding their way to value. For the first time, PQLs give Product a seat at the revenue table
For Sales, PQLs represent their lead list. They know that these accounts have already gotten some value from the product and have the highest likelihood of closing. A long list of PQLs is like Christmas for a SaaS sales person
For Customer Success, PQLs not only represent receptive potential customers, but because they are engaged with the product before even buying, they are much more likely of becoming long-term, successful customers
And, of course, PQLs will resonate right up to the board level because more PQLs mean more closed deals. More efficient sales. More top-line growth. More overall business value. Giddy-up!
A busy summer for the product team here at Sherlock! We’ve decided to hunker down, turn our backs on nice weather, and release a bunch of new features — ready for our customers as they return from vacation and get back to work.
This batch of releases includes some nice new segmentation options, better ways to manage your scoring profiles, as well as more great ways to get your Sherlock data outside the Sherlock app with the release of a sweet new Chrome extension as well as our first HubSpot integration!
As we watch Sherlock become an integral part of the workflows across multiple SaaS teams, we wanted to make it easier for those team members to access their Sherlock data without having to remember yet another password 🙂
(Seriously. It’s like we’re begging users not to use our product!)
With the release of this Chrome extension, Sherlock users can quickly find information about their users and accounts right from their browser.
No searching for tabs or passwords. Just click the extension and get the info you need.
From any Chrome tab, you can:
search your Accounts and Users (great for quickly checking up on engagement)
look up all your Scoring Profiles
sort by Score and Activation Rates (a must-do for finding your PQLs)
view your Default and Custom Segments (like Ice Cold and Red Hot)
You already use HubSpot as your CRM. Most excellent! Now you can use Sherlock’s singular engagement metrics to filter contacts and companies, trigger workflows and create segments.
Sherlock adds a smart layer to HubSpot. Now all your customer-facing teams can see (and take action based on) how users are engaging with your product during their trial periods — and beyond. Have they hit first value? Has their engagement dropped since they converted?
For sales teams, finding PQLs has never been easier.
For CS teams – you don’t need to go find another CRM! Don’t go looking for a CS tool that is going to duplicate all the CRM functionality you have in HubSpot. All you need is Sherlock engagement data combined with the workflow and account management functionality HubSpot and you’re good to go!
With Sherlock, you can automate your outreach and task management based on user engagement. Has a user recently hit first value? Use Activation as a workflow property to automatically change their lifecycle stage. Has a user’s engagement dropped? Trigger a task so you don’t lose them to everyone’s least favorite 5-letter word — churn.
Much like workflows, you can also trigger emails based on a user’s engagement. Say you have a user who just adopted your brand new feature (congratulations, by the way). You can set up HubSpot and Sherlock to automatically send them an on-boarding email. Excellent! That leaves more time for your CS team to chase down those possible churn threats.
Report smarter with Sherlock metrics
SaaS revenue forecasting — it can be tricky. How likely is it that a deal will close? Often there is a gap between expectation and reality in answering this question. Fill that gap with product engagement insights, not your Account Rep’s“gut feelings.” With Sherlock’s smart layer on top of HubSpot’s renowned CRM, every Sales meeting goes from “I think” to “Here’s what we do”.
Bonus: Get HubSpot data in Sherlock
Not only can you get Sherlock data into HubSpot, but this connection will also allow you to bring HubSpot data into Sherlock where you can segment and drive custom alert. With this connection, bring in Company and Contact Owners as well as Lifecycle Stages from HubSpot.
Segmentation: it’s all the rage. And rightfully so.
Many users have asked us for the ability to segment their different user/account groups by the traits that they send to Sherlock. We were happy to oblige.
Within any Account/User segment, you can click on the Segmentation tab to see that segment broken down by the values of any particular trait. Segment your product engagement data even further to find quick answers to questions like:
What percentage of my most engaged accounts are on enterprise plans? and How many of my hot trials have more than 200 employees?
That’s SaaS done right.
Set default profile from a Score Index Page
Our new score index page gives you a quick overview of all your scoring profiles and allows you to select one as the default. Customization, here we come.
No need to click, click, click to see basic information like weekly active accounts and average product engagement metrics.
Want more details on a score profile? Just click on the one you’re interested in and it’ll take you to the dashboard you know and love.
Go from Sherlock to an Intercom or HubSpot profile
Moving between platforms has never been so easy. See a change in Activation on one of your users or accounts and want to reach out? No need to click 6 times to get to their Intercom or HubSpot profile. (You’ll still need to click once, but that’s just the way of the internet.)
If you spent a day at Sherlock, you’d hear us throwing these terms around as often as “coffee” and “SaaS” (very well, perhaps less than “coffee”). But what does Activation mean? What does Engagement mean? How are they related? What’s the difference?
Quite excellent questions!
Here’s our CEO, Derek Skaletsky, on the topic.
Let’s begin with Activation (Rate)
n. A static measurement of how far along a user or account is in their journey toward “first value” or the “aha” moment where they realize how great your product is. n. An indicator of how far along someone is to becoming a product qualified lead
There are a few things a user would need to do to get set up in your product and get value out of it. These things vary based on the product. Let’s say you’re a modern SaaS company with a GSuite plugin for email collaboration. Your Activation steps might look like this:
Here’s an obvious fact that follows: Activation rate is just the percentage of steps completed. That means if an account or user has done 2 out of the 5 steps above, they are 20% Activated.
They are 20% of the way to hitting first value with your product. Excellent!
In Sherlock, you can see an account or user’s Activation rate in a few places. The full Activation checklist is on the left side of any account or user detail page, and the Activation rate is visible on any user or account overview (because it’s such an important metric!) Additionally, you can see Activation rates in other platforms you’ve integrated with Sherlock — Intercom, Slack, and Hubspot being among them.
Activation rate is quite important in the early phases of the user journey, especially if you have a freemium version or free trial. In that case Activation, occasionally combined with firmographic criteria, is the best indicator of when a trial account is ready for an interaction with your sales team. (It becomes even more important when you have a large number of trials and your Sales team needs ones to focus on.)
But that doesn’t mean that Activation is no longer important after the free trial is up. Post-sale, Activation gives your Customer Success team a way to measure how far along the account is in the on-boarding process and what steps each user needs to complete to be fully on-boarded onto the product.
Sales teams have always known this. Just look at how any CRM is organized. Marketers know this. That’s why ABM has taken off in recent years. SaaS businesses sell to other businesses — your product is used by teams. You operate at the account-level.
Why wouldn’t you track Activation the same way? You would track it the same way. But accounts are made of users.
There are some Activation criteria that the account needs to do. For example, adding a certain number of team members to the account. On the other hand, there are some Activation criteria that a single user needs to do to become Activated. Think actions like setting up a profile or creating an individualized template. To truly understand how far along an account is on the path to Activation, you need to understand both the account Activation and the Activation rate of the individual users on the account.
n. An over time measurement of how much a user or account is using your product
This is all about the events (or actions) a user or account can take in your product. As you are well aware (surely), there are several things that one might do in any given SaaS product. Some of these things are more important than others. Login, for example, is not that important. Sure, everyone does it, but how much value does someone get from logging in?
An obvious fact, that — not a lot.
Creating a report, however, is more valuable. A user would certainly derive more value from creating a report than logging in. (This is, of course, assuming you have the sort of SaaS app where creating a report is part of the value.) There are events that are likely even more valuable than creating a report and similarly events that are less valuable than creating a report.
So to get a good sense of how engaged a user is with your product, you need to collect all the (at least somewhat) important events that one might do in your product and weight them accordingly. Then, you need to do some math to find the engagement score for both users and accounts.
Yet another obvious fact — all the time! In all seriousness, there are several things an engagement score can tell you.
It surfaces accounts that are at risk and ones that are ready for an up-sell.
It shows you which users on an account are going to be internal champions for your brand.
It gives you an indication of which accounts might be good to reach out to when it comes time to build out your social proof
But most importantly, and partly because it is over time, the engagement score offers singular insights into the overall health of your business. If it’s on a downward trend, it could indicate you need to make some changes. A graph with a positive slope means you’re doing something right!
At-a-Glance: Activation vs. Engagement
Static metric to determine how far a user/account has progressed
Over time metric for assessing how much a user or account is using your product
Use it at the beginning of the customer journey – both pre and post-sale
Important to track across the entire customer lifecycle
Trends are essential for identifying risks and opportunities
Product engagement = The key to recurring SaaS revenue
The entire SaaS business model is dependent on people consistently using and getting value from your product over time. That means your success depends on how customers are engaging with your product.
This is why creating a method for scoring product engagement is essential for every SaaS business. Without a proper way to score the engagement of your users and accounts, it’s pretty much impossible to know what the hell is going on with your business.
As a Founder/CEO, how many times have you asked, “How are our accounts doing?” or “How’s engagement this month?”, only to be met with blank stares from your team?
As VP of Product, how many times have you wondered if your recent releases were helping to drive overall engagement, only to realize that you don’t actually have a good way of determining that?
As a Customer Success Manager, how many times have you wished for a simple way to prioritize your outreach to maximize recurring revenue for your SaaS business — an easy way to determine which accounts are thriving and which are struggling — only to give up and waste the day sending a bunch of random “just checking in” emails?
As an AE, how many times have you wished you could easily see which trial accounts are ready for a call and which ones you shouldn’t bother with — only to give up and refresh your Facebook feed a few more times?
Thankfully, all of these issues can be solved with a good product engagement scoring system. By scoring engagement, you can create essential visibility for every part of the organization that cares about recurring revenue, i.e. everyone.
*This information in post was originally presented at the 2018 ProductLed Summit. A few things have changed since then (including our logo), but the importance of Account-Level Product Engagement isn’t one of them.
Watch the video of our presentation or read this post which outlines the main points. Either way, you’ll find the information of utmost use for your modern SaaS business.
Account-Level Product Engagement is an obvious fact
Why should you care about this topic? Why isn’t tracking and reporting on product engagement at the user level good enough?
It’s elementary, my good friend. If you are a SaaS business, you operate at an account-level.
Are you seeing the trend?
You’re not a social media app (you aren’t, right?) — you’re a SaaS app. You sell to businesses — your product is used by teams. You operate at the account-level. Why wouldn’t you track engagement in the same way?
SaaS sales teams have always know this. They know they sell to accounts — buyers, decision makers, influencers, users, etc. This is why CRMs have always been organized at the account-level.
So why not track account-level product engagement? Curious.
But who cares about why? Let’s all agree it needs to happen. In SaaS, users come and go, but accounts stay forever (except when they don’t, but that’s a different post). If you aren’t tracking account-level product engagement insights, you’re missing an essential view of your business.
Indeed, as a SaaS product, if you aren’t organizing and viewing your data at the account-level, then there is no way to make it actionable.
How to organize your product engagement data at the account level
This is simplicity itself. Accounts are not people. But people use your product.
Very well. Organizing product engagement data at the account level just means aggregating all the activity for the individual users on an account to an account unit.
Say you have an account with three active users and:
Two of them created a document
One of them uploaded a document three times
One of them edited a document three times
One of them edited a document twice
One of them edited a document once
Their activity would break down like this:
created a doc
uploaded a doc
edited a doc
That’s great. Organizing this data around their account would look like this:
created a doc
uploaded a doc
edited a doc
Elementary. But it’s an essential first step in being able to assess account-level product engagement.
How to assess product engagement data at the account level
You’re organized at the account level, excellent! Now you can start assessing account-level product engagement. Now you can start understanding — not just your product’s engagement — but the health of your whole business.
Once you have this data aggregated, you can do some remarkable things, including:
Identify engagement trends for your accounts. When you score account-level product engagement, you can track that engagement over time. This means you can identify both problems and opportunities in your customer base. Who’s trending down(and needs some support)? Who’s trending up(it’s time to expand!)?
Track the Activation progress of your accounts and generate Product Qualified Leads. Tracking Activation and onboarding progress for SaaS has to happen at the account-level. By tracking how your new accounts are progressing with their onboarding your sales team will know who to focus on when
Identify feature adoption at the account-level. When you think about how your key features are being adopted, the context needs to be at the account level
Assessing account-level product engagement shifts your entire perspective.
Without Account-level engagement
With Account-level engagement
Who are my best users?
Which are my best accounts?
Which users are at risk? Which are thriving?
Which accounts are at risk? Which are thriving?
How many users have adopted feature X?
How many accounts have adopted feature X?
Which users have used feature Y?
Which users have used feature Y?
See that right column? The answers to those questions are where the revenue is.
Account-level product engagement — taking action
Account-level product engagement is so singular precisely because it’s so actionable. Here are four ways you can operationalize this data and drive real returns for your SaaS business:
1. Track Account Activation
We’ve already said it. SaaS = Accounts — accounts sign-up, accounts onboard. For most products, Activation can’t be completed by a single user. It takes a team to get to first value for most SaaS products.
If it takes 4, 5, 6 steps to become activated with your product, these steps are usually taken by several different users.
When you track Activation progress at the account-level, you give your teams important insights into which accounts are ready to move forward and which ones need help.
2. Track Account Health
We’ll skip the part where we tell you SaaS is account-based (you do know SaaS is measured at the account-level, right?).
So if you want to measure the health of your business, you need to to be able to measure the health of your accounts. What indicates the health of an account? You guessed it: account-level product engagement.
When you measure account-level product engagement, you don’t only see the health of the account. You can also:
Identify expansion opportunities: Identify which accounts are increasing their engagement and might be ready to expand.
Identify at-risk accounts: Identify accounts as their engagement starts to wane and get ahead of potential churn.
Improve feature adoption: Locate those accounts who haven’t used some of your key features and drive adoption.
Prioritize daily work: Your CS team works and things at the account-level. So having engagement data aggregated at the account-level will give them the ability to identify which accounts need attention on any given day, which will help them prioritize their work and be more efficient.
3. Refine Customer Acquisition Efforts
For strange effects and extraordinary combinations (ok, not strange at all), tracking account-level product engagement will also help you identify customers who get the most value from your product.
Enter your marketing department. Enter the ability to track the best leads possible. Here’s how:
Identify target customer profile: By looking at your most engaged accounts, and identifying similarities between them, you can create an ideal customer profile that will help you focus your top-of-funnel and outbound efforts
Drive look-alike campaigns: Feeding lookalike advertising systems (like Facebook, Google, and others) your most engaged accounts/users is a singular way to attract the right prospects into your funnel
Identify case study candidates: Case studies and social proof points are obviously of the utmost use when it comes to converting prospects into leads. Your best social proof candidates will come from your most engaged, most successful accounts
4. Optimize your Sales process with Product Qualified Leads
Every modern SaaS sales team must be able to qualify trial accounts based on their engagement with the product. That means you need a way to identify Product Qualified Leads (PQLs).
Product Qualified Leads are the most qualified leads for a SaaS business because they have already started to get value from a product. They haven’t only expressed some esoteric interest in the product — they have actually used it, become Activated, and showed consistent engagement. These are the accounts that are most likely to convert to paid.
And you can’t have a Product Qualified Leads process without account-level product engagement. Remember: accounts signup, accounts get set-up, accounts convert to paid.
Tracking your account-level product engagement data is simply the only way to create and drive a PQL process.
Account-level product engagement — an essential piece of the game of SaaS
The bottom-line is this: SaaS is an account-based game. You simply can’t plan or execute well in this game without understanding account-level product engagement. It’s elementary, my friend.
If you do track this account-level product engagement effectively, you will bring clarity and efficiency to your entire operation. It will be like shining a light on your business, uncovering the insights that will drive the work of your entire revenue team.
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