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

  • Top 5 Product Engagement Segments for Sales Teams
  • Top 10 Product Engagement Segments for Customer Success Teams

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.

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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 TeamsDescriptionNew 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” bucketActivated 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.

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