Why Customer Success Playbooks fail in a product-led model and what to do about it

Why Customer Success Playbooks fail in a product-led model and what to do about it

I recently had a conversation with a top CS leader who was struggling to build and get their “Playbooks” to work.

I heard her struggles and they felt very familiar. My suggestion to her was — forget the playbooks. I knew she wasn’t going to get them to work because they just don’t fit the way a SaaS business works. They don’t fit the desired journey of a modern SaaS customer. She was obviously surprised at my take on this because the “Playbook” has been a pretty standard part of the Customer Success function for a long time. And I understand why.

Playbooks — when used in the context of a Sales or CS team — represent lists of “plays” (or actions) that a rep is required to apply against any new lead or customer. They are borne from the belief (hope?) that there is some consistent, linear set of steps that can be designed and followed to ensure success for every one your accounts.

I know this dream. I’ve held it. I’ve designed plenty of playbooks (on both the Sales and CS side) — all of them some flavor of this:

We use this type of playbook with the stated goals of:

  • Ensuring success for our customers (follow these steps and success is yours! follow them not and…well); and
  • Making things easier for our reps (just follow the playbook for each account and you’ll never have to think about anything!).

But let’s be honest — these playbooks are really just management hacks. We mostly use them to hold our reps accountable for working their accounts. This account is only on step two of the playbook — what’s the deal??

And while this kind of approach made sense in a traditional software sale (or even more so in a service-type offering) — it falls apart really quickly in a modern SaaS business…especially in a product-led operation.

Why is that?

Well…because SaaS — especially product-led SaaS — is different than a traditional software offering. It is a different business model. It’s a model that is built on the premise of reduced human intervention. In fact:

The goal of the “product-led” model is, in many ways, to drive sales (and engagement) with NO human intervention.

These are products — and business models — designed to support a self-serve customer journey.

Of course, this isn’t the reality. Even though some companies don’t like to admit it, we know that most of the companies in this space have strong Sales and CS teams. These teams are still important/essential parts of the customer experience. The reality is that very few companies can drive strong growth without these teams in place and operating at a high-level.

But that doesn’t change the fact that the product-led model was built to work without them. This is important to remember. Users of these software products don’t care about following some linear adoption process. With a try-before-you-buy offering (free-trial and especially freemium), users expect to sign-up and get started without talking to anyone. And they expect to upgrade without talking to anyone. And they expect to use the product without intervention. In short,

Customers don’t care about your playbook.

This means that the effectiveness of these playbooks collapse shortly after you build them.

The playbook failure

In most cases, playbooks require reps to follow some rigid, linear process that, as I just mentioned, is not in-line with how customers experience (or want to experience) your product. These playbooks basically force a rigid process onto a fluid experience. Square peg, round hole.

The typical playbook is designed to create a bunch of tasks for reps at different points of the customer journey (which, generally, will be defined by the age of the account).

Do this on day one; then two days later, do that; then five days later, do that; etc.

And these tasks are generally created without respect to a previous task being completed. Inevitably, after a few weeks with this new process, your reps will wake up to an insurmountable mountain of overdue tasks in their CRM.

This leads to stress and frustration for everyone involved. Reps start to feel overwhelmed, management starts to question their work ethic, and customers start receiving a bunch of desperate emails — not because they need help, but because reps are trying to check off the steps in their playbook.

Whispers of “screw these playbooks” will be start easing into water cooler conversations (ie — private Slack channels). The seeds of resentment will be planted.

Wide-scale mutiny is not far off.

Is there a better way? What is the solution?

But we need to do everything possible to ensure our accounts are successful!

I appreciate that instinct, but you have to remember: the product-led model is not designed for manual intervention. It’s designed to open your software up to larger audiences and drive larger numbers of accounts. This means you simply can’t touch every customer — as much as you may want to. And, not for nothing, many of your customers don’t want that either.

This means that the playbook is the wrong framework for a product-led CS (or Sales operation). What you need instead is a proper signaling system. A system that highlights which accounts on which you should (and can afford to) be spending time. These signals can generate/trigger specific actions (like task creation, or emails, for example), but they will be targeted to specific accounts that deserve/require your attention.

And this is mainly a question of smart segmentation — based on more than the age of the account.

Creating a Signaling system to replace playbooks

A good signaling system is much more in line with how a product-led model should operate. It replaces the rigid, linear nature of the playbook with a framework that “bubbles” up the right accounts and truly makes your team more efficient (and, dare I say, more proactive).

To build a good signaling system, you need to (1) define your signals; and (2) create a plan for actions against those signals.

Defining Signals

When creating signals, you should focus on two major vectors:


There are 3 stages of Tenure we’ll consider in this discussion (you can define more if it makes sense for your business):

  • Brand New: accounts less than 30 days old
  • Young: accounts between 1 and 3 months old
  • Mature: accounts 4+ months old


When we talk about Engagement/Activation, we talk about them in the context of metrics created and tracked in Sherlock (but again, you can have your own versions of these metrics if you want to build them):

  • Engagement: An over-time measurement of how much a user or account is using your product.
  • Activation: 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.

Of course, every product/business is different, but this is an example of a signaling framework you could create for you SaaS product based on Tenure and Engagement/Activation:

For some businesses, it might make sense to add a third vector — account size (or potential account size). You may want to create signals for accounts of a certain size or you would plan different actions for accounts of different sizes. That might look something like this:

Defining Signal actions

Once you have your signals established and you are tracking them well, you should build a set of suggested actions for each. The actions that you design need to be unique and tailored for your business and operation. But as an example, your program could look something like this:

As you can see, by assigning specific actions to your signals, your signals will start to act as triggers. While at first glance this may resemble “a playbook”, there are a couple of big differences between the playbook and this signaling approach.

First of all, Playbooks are traditionally applied in a more global fashion — we must apply this playbook to every account (or the majority). Signals, on the other hand, are designed under the assumption your team simply can’t deliver high-touch attention to every account (or even most of them) and need to be able to focus their work on those with the highest priority. They don’t need a system to ensure every account is getting attention — they need a system to help them focus on the right accounts.

Secondly, playbooks are generally designed as linear processes — they call for several steps that the rep and user need to pass through to complete the playbook. Whereas signals assume a non-linear engagement pattern for accounts. They trigger single actions when certain engagement conditions are met.

For these two reasons, a good signal program is much more in-line with the needs and flow of a product-led business — and the journey that these customers take.

Other non-behavioral, scheduled signals

After reading a draft of this post, another friend in the CS space reminded me of a few “signals” (he referred to them as “touchpoints”) that he considered “scheduled.” These included things like QBRs (when relevant), NPS surveys, and renewal conversations that happen at specific times and are independent of any behavioral criteria.

These made a lot of sense and if applicable, should be added to your program appropriately.

In conclusion

While much of this discussion will seem obvious to many in the space, my hope is that it will help break others from an approach that was borne at a different time. A different era of the software business. By moving your approach to a better framework — one more in-line with how modern software is sold and serviced — you can liberate you and your teams from the oppressive weight of the traditional playbook!

How to Forecast Monthly Revenue in a Product-Led Growth World

The product-led model has changed the way the SaaS world operates. Unlike previous sales-led models, it relies on making a great product and letting people try all (or part) of it before paying. But when most of your conversions happen without a Sales touch, how do you forecast monthly revenue?

TL;DR: Here’s a video version of this post

Certainly, monthly revenue forecasting in a product-led growth business doesn’t work quite the same way that it does in a traditional sales-led world.

Before we get into the differences, let’s get clear about what we’re talking about here. This isn’t a years-out projection for your investor deck or some high-level estimate of what you’re hoping your killer product will bring in if everything goes as planned.

This is a monthly sales forecast. We are answering questions like What are we going to bring in for net new MRR? To figure out how to answer this question in a product-led growth world, let’s first look at how we answered it a sales-led world.

Revenue forecasting in a sales-led world

In a traditional sales-led approach, deals went into a CRM and salespeople worked in the CRM. They chased the deals, they updated the deal stage and they used that deal pipeline to determine which deals were going to close and which weren’t. Sure, your Sales Manager had to take into account how optimistic each salesperson was, but after doing that, they had a pretty good idea of the potential revenue for the month. In fact, they probably used a simple equation that looked a little something like this:

deal size x likelihood to close

Easy, right? Based on that, the Sales manager was able to forecast the potential revenue for the month. But things work a little differently in a product-led growth world.

How the PLG model is different when it comes to revenue forecasting

In a sales-led model, there’s a salesperson (read: human) interacting with the client every step of the way. They are gauging the clients’ interest. They are tracking the deals. Someone is sitting there and knows what’s going on.

In a product-led growth model, there are all these trial signups with very little sales interaction. There’s no human to hold the client’s hand and figure out how interested they are. Most of the conversions are self-conversions, which is great when it comes to overall growth, but it definitely makes it harder to forecast revenue. 

So how do you go from trial signups to forecasting how much revenue you’ll get from those signups every month? How do you get a net new MRR forecast for the month? There are two options.

Two approaches to get to a net new MRR forecast for the month

The top-down approach

Disclaimer: This is not the preferred method.

If you’re like most SaaS businesses that have been around for a while, you probably have some historical data that tells you on average how many of your trial leads convert to paid every month. All you have to do is take that average and apply it going forward. For example, let’s say your monthly conversions for the past few months have looked a little like this:

MonthTrial Sign-upsConverted to Paid
January 80075

That means, on average, you have a 10% conversion rate.

If you take that average and do a little math magic, it’s easy to get a rough estimate of what your net new MRR forecast for the month will be. Watch:

Conversion rate x Number of trials x Average revenue per customer = Net New MRR

It’s definitely easy, but it’s not an ideal option because it doesn’t give an accurate forecast. Just look at the variation in conversion rate over your past few months. It’s probably pretty high. If you just lazily take the average conversion rate and apply it across the number of trials you have, you’re not factoring in the quality of those trials. That means your forecast is inconsistent and has no room to take into account that big marketing campaign your team did. It was great for exposure, but you got a lot of not-great sign-ups from it.

Lucky for you, there’s a way to modify this equation so it takes into account both the volume and quality of your trial signups.

Start from the bottom when trying to get a net new MRR forecast for the month

This method of sales forecasting is more in line with the revenue forecasting you’d do in a traditional sales-led model. You look at each deal, you evaluate how likely it is to convert and then you factor in the potential size of the deal based on how big the account is.

The sticking point here is the “how likely the deal is to convert” — it’s not based on the deal stage in your CRM anymore. In a traditional sales-led model, you would apply a different likelihood to close factor based on how far along the deal was. 

A demo request, for example, would have been around 20% likely to close. Someone who had already requested pricing might be at a 50% likelihood to close. Proposals sent? Those guys are 70% or 80% likely to close. Let’s make another revenue forecasting table for the traditional sales-led model:

Deals for MayLikelihood to close (based on deal stage)Deal sizeEstimated Revenue

Total for month28k

As you can see, when you multiply likelihood to close by deal size, you can get a good idea of projected revenue for the particular deal. And when you add up all those estimates, you get a good idea of what your net new MRR forecast for the month is going to be. Pipeline to monthly forecast. Check.

But (and we’ve said this before) in a product-led growth world, there’s no salesperson on the ground bucketing people into different deal stages.

So the big question: How do you get to that likelihood to close number in a product-led growth model? It’s elementary — Activation Rate

What’s Activation?

n. 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:

The account journey from signup to Activation

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! 

The Activation steps are going to be different for every product, but what is not different is that Activation measures how much value someone is getting from your product and therefore how likely they are to convert. It makes sense, right? The more value someone has gotten from your product during their trial period, the more likely they are to pay for the product after the trial is over.

Want an easy way to measure Activation?
Try Sherlock today.

One thing to keep in mind is that Activation isn’t binary. There are degrees of Activation for every account. And that nuanced Activation rate is super important when it comes to forecasting sales. 

Activation as a proxy for the likelihood that they’ll convert

To figure out likelihood to convert from Activation rate, take a look at the historical relationship between the two numbers. For example, in our business, we know when a trial account gets to about 50% activation or above, they convert to paid 70% to 80% of the time. Similarly, we know that, if someone gets to an Activation rate of 25% to 50%, they will close about 20% of the time. Anyone less than that is not going to close. (Even our most optimistic salesperson agrees with that statement!)

Here’s what a product-led growth revenue forecast for our business might look like when taking into account Activation rate.

DealActivation RateLikelihood to close
(based on Activation)
Deal SizeEstimated Revenue

Total for month$2075

And the best part is, we’ve found Activation works even better than the guesstimates of an overzealous (or underwhelmed) salesperson. That’s because it’s based on an objective measurement of how much value users are getting from the product, not a person’s estimation of how much they can make an account believe in a future promise of value.

Forecasting net new MRR in a product-led growth world is actually more accurate than in a traditional sales-led model

Product-led growth is still a pretty new concept, but it opens up avenues to understand users in a previously unthinkable way. When you base your monthly sales forecast on actual user data, it’s going to be more accurate. It’s just a matter of figuring out a system that works for you.

We’ve found Activation is a good proxy for likelihood to convert. Do you have any others? Email us at marketing@sherlockscore.com and we’ll feature them in our next post!

Top 5 Product Engagement Segments for Sales Teams

This is part 1 of a 2-part series on product engagement segments for your SaaS business:

Segmentation: it’s all the rage. And rightfully so. 

Marketers know that bucketing people and sending more targeted messages based on traits leads to increased ROI. Product knows segmentation helps them find feature adjustments that specific users will find more useful. Execs know looking at segmented data helps them find holes in the business. In short, modern SaaS leaders know: if you want to get the most out of your data, you need to segment it.

Another way to segment your audience — product engagement. First, let’s clarify: These segments aren’t based on firmographics or website visits. The segments we’re talking about here are based on engagement with your specific product. And while every SaaS business has its own singular nuances, there are some standard product engagement segments that all modern SaaS business should be tracking (and acting on).

That’s how you win the game of SaaS.

Some questions to ask when setting up your product engagement segments

What actions are these people taking? What are they using?

As you are well aware (surely), there are several things that one might do in any given SaaS product. Some events 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.) Some events are likely even more valuable than creating a report and similarly some events are likely less valuable than creating a report.

Some of these important events are required for a user or account to reach first value, which you might bucket into an Activated segment for your Sales team (more on that later).

Where are they in the customer journey? 

(PSA: This post is going to talk about customers in the trial phase, i.e. the ones that your Sales team cares about)

Trial? Onboarding? Growth? The SaaS Sales cycle is not a one-and-done operation. If you’re going to keep your business alive, you’re going to need to both acquire and retain customers. 

There are three major phases of the SaaS journey and the actions your teams will want to take are different in each: 

  1. The Trial phase (this is the one to consider when making segments for Sales teams)
  2. The Onboarding phase (for Customer Success Teams, which we’ll get to in a later post)
  3. The Retention and Growth phase (for Customer Success Teams, which we’ll get to in a later post)

Keep your Sales team focused with product engagement segments during the trial phase 

Too many leads is not a bad problem to have, but it is still a problem. Product engagement segments during the trial phase need to help your Sales team weed through the trial accounts to find the ones that will convert.

Want to make segmentation for Sales teams easier than ever?
Try Sherlock today.

When thinking about engagement segments for your Sales team, we find it helpful to think about both engagement with the product (Activation) and where customers are time-wise (because trials are a finite length). 

You’ll want to segment your trial audience by:

Product Engagement Segments for Sales TeamsDescription
New trial accountsTrial accounts that have just signed up. You want to focus on getting these guys to first value.
Product qualified leadsActivated trials. These ones are ripe for conversion. 
“Red Hot” Trial accountsThese are hottest of the hot product qualified leads. Not only have they hit first value, but they are actively engaging with your features.
Soon to expire trialsThe trials that are almost over. If they’re not Activated, you might have one last shot to push them to first value before they fall into the “need to reengage in a year” bucket
Activated trials not convertedExpired trials that hit first value, but didn’t convert.

1. New Trial Accounts

For most modern SaaS businesses, this New Trial Accounts segment is where it all begins. This segment will be the focus of your inside Sales team (if you even have one of those). 

Who goes in this product engagement segment for Sales teams? Any account that has signed up in the last X days. Generally, the “X days” should be a fraction of your trial period (whatever you decide qualifies as “new”). 

What do to with this product engagement segment for Sales teams?Send it to your Sales team. Send it via Slack, a CRM, email — wherever your Sales team is managing their leads because this engagement segment is their new lead list.

Keep in mind, it’s important that your Sales team not get overly excited and smother these new users before they have a chance to try the product (you have a free trial for a reason — you do, don’t you?). 

Let these accounts work in the product and monitor their Activation progress closely. Once they get to a certain point in Activation, they will make their way to your next segment:

2. Activated Trials, i.e. Product Qualified Leads (PQLs)

This is an essential segment for every SaaS business with a try-before-you-buy model (whether that is a trial or freemium option). Tracking new accounts is great, but understanding when they have become Activated is even better. This Activation rate is how modern SaaS businesses qualify leads. This qualification is based on how engaged your accounts are with your product during the trial and, more specifically, how far they’ve gotten toward Activation

Why is this product engagement segment for Sales teams important?Measuring Product Qualified Leads is key to building a high-performing, efficient sales process for a modern SaaS business. In fact, when salespeople call on Product Qualified Leads, they convert at 25-30%!

If you aren’t qualifying leads based on product engagement, you need to start today. And this is the segment where you will track them. 

Who goes in this product engagement segment for Sales teams? At its most basic level, a Product Qualified Lead is an account that has become engaged enough with your product during a trial to have reached “first value.” This usually means that an account has completed some specific pre-defined actions, which you defined in an Activation checklist.

If you choose, you can also include some firmographic data in the definition of this segment for Sales teams. For example, you may want your Sales team only chasing larger, or more targeted opportunities. In this case, your definition of a PQL might be an account located in North America with more than 1,000 employees, which also becomes Activated in the product. 

How do you take action on this product engagement segment for Sales teams? First of all, let’s get this straight — you just do! This is the list of trial leads that justify personalized, higher-touch outreach. These are the accounts that your Sales team should focus on. Make sure:

  • This segment is tagged in your CRM. Salespeople should be able to look at a list of their existing leads and quickly sort them by whether or not they are in a Product Qualified Lead; 
  • You have smart alerts set up for this segment so that your Sales team is alerted whenever any account becomes activated and enters this segment.

Product Qualified Leads are the leads that are most likely to convert to a paid account. They are the leads that have shown strong engagement and achieved initial value with your product. These are the accounts on which your Sales team should be focused. 

3. “Red Hot” Trials

When looking at the engagement of your trials, having a static Activated or not-Activated state is great, but more important is knowing how engagement with the product changes over time. 

This Ret Hot segment highlights those users and/or accounts that have a significant increase in their engagement. (In Sherlock, we define that as an increase of more than 10 points.)

Basically, these are Product Qualified Leads on steroids. These accounts have reached first value and continued to engage with your product in a meaningful way after that. They’re really into your core features and are either completing Activation steps multiple times or delving deeper into what your product has to offer.

How do you take action on this product engagement segment for Sales teams? If there’s one segment that’s even more likely to convert than a straight-up Product Qualified Lead, it’s this one. Make sure your Sales team has these trial accounts tagged in their CRM of choice and they’re regularly checking in with them. As they say, get ‘em while they’re hot!

4. Soon to Expire Trials

This segment will help your Sales team focus on those accounts whose trial is coming to an end. Let’s face it: your trial period is an arbitrary time frame, but it does create some sense of urgency. As your accounts near this arbitrary decision point, your Sales team should be in contact with the main decision makers to do what they can to “encourage” a conversion, whether that means making one final push toward PQL status or making a push from PQL status to paid.

How do you take action on this product engagement segment for Sales teams? You should obviously tag accounts in this segment in your CRM of choice, but you should also set up alerts for your team for when an account enters this segment. You don’t want your Sales team to allow strong potential trials to expire unnoticed. 

Sort this engagement segment for Sales teams by Activation rate so that your Sales team can be sure to focus their energy on those trials that are most likely to convert. (We’re looking at you, PQLs). 

5. Activated Trials, Not Converted 30/60/90 Days Ago

These accounts are no longer in a trial, but that doesn’t mean they’re gone for good. Too often, once a trial is completed without a conversion, we write the account off, stop tracking them, stop communicating with them and just generally kind of forget about them. 

But we should not. 

“When we ran an analysis of 10 companies and looked at how long it took people to convert, 50% of conversions happened after the end of the trial period. That shows that there’s a lot of value in nurturing people. Even if people have already gone through your trial [without converting]”

Francis Brero, Co-founder & CRO, MadKudu
2019 Product Led Summit

Why is this product engagement segment for Sales teams important?Because these accounts may just be your most important future prospects. They tried your product and found enough value to become Activated (or a significant way toward becoming Activated). They just didn’t convert. 

Instead of crying about it (and for God’s sake don’t let your Sales team send some snarky “breakup email”), keep this segment handy. Many times, a lack of conversion is due more to “bad timing”’ than not seeing value in your product.  A change of internal priorities, organizational shifts, short-term budget issues, and any variety of “emergencies” could lead an account to not convert. So this is a segment for Sales teams you should have handy and readily available for your team. 

How do you take action on this product engagement segment for Sales teams?  In general, anyone connected to an account that doesn’t convert during a trial should be sent back to marketing and included in nurturing campaigns. They should receive all your product update emails (in case there was a feature that would reignite them), and your Sales team should revisit them regularly. 

As a general rule, your sales reps should send a personal follow-up to these accounts every 6-12 weeks. They can mention new features, new relevant reference accounts, etc. They should treat these accounts as higher-touch, warmish leads. Don’t give up on them. You know what fixes bad timing better than anything? 


Go get ‘em. 

Meet SaaS Salesman Pete: A 📖 in bad stock images

Meet Pete. Pete is a salesman at a modern SaaS business.

Pete is a modern SaaS salesman!

Pete is amazed!
Marketing has brought him many, many leads.
Pete can’t wait to close all these deals. So many deals.
“All these leads signed up for our trial,” Marketing said. “They’re definitely qualified.”

Pete is amazed at all the leads Marketing sent him


“Ok.” Pete is on-board with the idea of qualified leads.
“Go get ‘em, Pete,” Marketing said. “Close those deals!”

If Marketing says they’re qualified, why not!


Pete emails one of the trials. They don’t remember signing up.
He tries another: “What do you do again?” They didn’t even know what his modern SaaS business did!
Doesn’t sound like they love us. Pete is unimpressed.

Pete wonders how supposedly qualified leads don’t even know what the product does


Pete has spent too many days trying to chase all these trial leads.
So many trial leads, so little success.
Pete is a SaaS salesman, but he is not a happy SaaS salesman.
Pete is a frustrated SaaS salesman.
He doesn’t know what to do. None of these trials he are working out.

Pete is frustrated calling bad trials


Finally, Pete connects with an account that has used the product.
They have gotten themselves set up and added three other users.
They are happy. They convert to paid.
Pete is happy.
Pete wants to find more trials like this. Pete wants to find all the trials like this.

Finally, someone that gets it! Pete is so happy 🙂


He did a Google search to find a solution. There must a way to find our best trials.
Pete believes.

Find your PQLs with Sherlock

Skip the Googling.
Try Sherlock today

Pete meet Sherlock.

Sherlock is a tool for modern SaaS businesses.
Do you work at a modern SaaS business, Pete?

Pete does work at a SaaS business!

You do!?
Sherlock is for you.
Find trial leads that are actually product qualified. Have them delivered to Slack.
Do you have Slack, Pete?
You can have your product qualified leads delivered other places, too! HubSpot? Slack? A CRM?
You like that, huh Pete?

Pete likes the sound of that!

Pete is excited.
He has finally found a smart way to prioritize his SaaS trial leads.
Now, Pete will close deals. Many, many deals.

Liked this story? Get custom engagement stories with Sherlock.
Learn more

Building a Product Qualified Lead process for your Complex product

This is part 4 of a 4-part series on PQLs: What they are, how to find them and how to build a winning Product Qualified Lead process

Want to know everything you didn’t know about Product Qualified Leads (PQLs)? Get our e-book.

activation slack alerts for Product Qualified Lead process

In case you haven’t heard, PQLs are leads that are more likely to convert because they have found value in your product. If you’re a modern SaaS business, you want to find these leads. So the only question left — how? It’s elementary: you need a Product Qualified Lead process.

So you’re convinced: you want to find PQLs and make a Product Qualified Lead process for your business. But where to start?

To build a proper Product Qualified Lead process, you will need to:

  1. Properly define what the criteria by which your leads will become product qualified (otherwise known as an Activation checklist)
  2. Have a set of guidelines for turning these leads into paying customers.

Let’s get started!

defining a pql is important for a winning Product Qualified Lead process

First off, how complex is your product?

When our customers ask how they should be designing their Product Qualified Lead process, the first question we ask them is: 

How complex is your product? 

More simply, how hard is it for a new user (or small group of users) to self-serve their way to first value? Don’t forget: self-serve means without any manual support of intervention from your team. 

The answer to this question is the starting point for your PQL definition. It’s answer tells you how Activated a new account should be before your team gets involved. 

This post covers a Product Qualified Lead process for complex products. Not sure if that’s you?

Ask yourself how many of your last 10 signups self-served their way to first value. If the answer is less than 4, read on!

A new user is almost always going to require manual support to get to the promised land. Complex products often require technical implementation, access to data or tools from other departments, or some deeper domain knowledge for a user to get value. 

A complex product might have a free trial period, but is more likely to only sell to customers who go through a sales demo with a more hands-on approach. 

Think Salesforce.

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Next, how big is the opportunity?

Now that you’ve decided you have a complex product, you should think of the other main factor that will determine how quickly your Sales team gets involved. Namely, the size of a Sales opportunity. As with simple products, if a new trial holds the potential for more revenue, you’ll want to get your Sales team involved earlier. 

At the very least, you should be able to categorize your new trial signups into Small, Mid-Size and Large revenue opportunities. 

Oftentimes, companies will use the company size of a new trial as a proxy for opportunity size. This is certainly one way to go about it, but you define opportunity size based on whatever criteria makes sense for your business. 

Putting it together with Activation Rate

The more complex a product, the earlier your Sales team should intervene. Similarly, the bigger the size of the opportunity, the sooner you want your Sales team on it. Sounds simple, right? (That’s good, because it is). 

If you have a complex product, you’ll need to get involved sooner regardless of the deal size. That being said, you’ll probably still want to wait for accounts to hit a certain level of Activation and keep your Sales and CS team focused on bigger deals.

Here are good rule-of-thumb Activation rate guidelines for a complex product:

Deal SizeReach out when:
Small 50% – 75% Activated
Mid-Size25% – 50% Activated
Large0% – 25% Activated

As you go through the next section, keep in mind the goal of a Product Qualified Lead process for complex products is to balance the time of your Sales team. That way, they are focusing on larger opportunities but aren’t abandoning smaller opportunities with a high likelihood to close.

Product Qualified Lead process for the Small Opportunity

Product Qualified Lead process for the small opportunity intermediately complex product
Product Qualified Lead process for small opportunities — Wait until they’re ready to convert

These pose quite the conundrum for Complex products. You know your product needs manual support for most users to get value, but how much time can you afford to give such a small opportunity? 

In these cases, the complexity of your product may just work in your favor. Wait, what?! 

That’s right. Small accounts that are really interested in your value proposition — in the promise of your product — will make the effort to get set up and experience some of the value. 

When their Activation is high, you’ll know they’re committed and it’ll be worth it for your Sales team to give them some attention. How high is high enough? We recommend waiting till they’re at least 50% Activated

How to engage these Product Qualified Leads

Because it is harder for users to recognize the eventual value of a Complex product on their own, trial leads on this product will likely need some kind of demo of the product from your Sales team. They will need to see the finished cake (complete with frosting) if they are going to move forward and convert. 

In these cases, it’s important for your Sales team to engage these users and invite them for an in-person demo of the platform, perhaps with an email. 

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Product Qualified Lead process for the Mid-Size Opportunity 

Product Qualified Lead process for the mid-size opportunity intermediately complex product
Product Qualified Lead process for mid-size opportunities — more users, lower Activation

These mid-sized opportunities are exactly what they sound like. Bigger accounts than a small opportunity, but smaller than a large one. The bigger the account, the more users involved, the more coordination necessary and the more complex the path to conversion. 

So let’s be honest: Not many opportunities will self-serve their way to conversion with a Complex product, regardless of the size. But because these are bigger than small opportunities, you’ll want to get your Sales team involved soonish, probably at around a 25-50% Activation level

How to engage these Product Qualified Leads

The challenge here is still the complexity of the product. It’s hard for users to identify the full value of the platform on their own. 

Focus your manual intervention on booking a time to talk to your Sales team instead of pushing the account toward deeper Activation


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Product Qualified Lead process for the Large Opportunity

Product Qualified Lead process for the large opportunity intermediately complex product
Product Qualified Lead process for the large opportunities — It’s ok to jump in a bit earlier

When you get large opportunities to sign-up for you Complex product, you don’t need a great deal of product usage to justify, at least, an initial touch point from your team. In fact, you should feel comfortable reaching out to these accounts soon after they sign-up or when they reach just about 25% Activation.

From there, it’ll be somewhat similar to a traditional Sales process. Or at least as you’re going to get with a modern SaaS product. Start by identifying the key decision makers and make sure that they see the complete, fully-baked value of your product, which can be hard to do during a trial so get them on a demo ASAP.

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Product Qualified Leads (PQLs) are a Team Sport

This is part 5 of a 5-part series on Product Qualified Leads (PQLs)

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. 

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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:

  • Product
  • Marketing/Growth
  • Sales/Revenue Ops (if you have them)
  • Sales
  • Customer Success

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;
  • how far they have gotten toward Activation;  
  • how many users are engaged (and which ones);
  • what features they have (and haven’t) used;

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. 

Ready to give your teams everything they need to take users from trial to forever? Give Sherlock a try.

Sales/Revenue Ops: The Trafficker 

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

TeamArchetype Role in PQL process
Growth/MarketingThe Architects– 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
ProductThe Gatekeepers– 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
Sales OpsThe Traffickers – Make sure that sales team is aware of PQLs where they need them  when they need them
SalesThe Closers– Help team define and refine the criteria for Product Qualified Leads
– Close. Those. Deals!
Customer SuccessThe Caregivers– Help new users get to value with the product – drive PQLs!

PQLs as a Unifying KPI

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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!