Goodbye MQLs and SQLs, say hello to PQLs!
Marketo was a pioneer in marketing-led GTM strategies. They helped to usher in lower cost models by introducing Sales Development Representatives, who worked in conjunction with Account Executives. This newer model provided companies more favorable prospect-to-sales-representative ratios. Also, it’s basic premise is tilted toward generating mass lead-generation and quick turnaround, leveraging the internet for webinars and online demos while reducing office visits.
As a refresher, Marketo helped to pioneer strategies for marketing-led customer acquisition automation by providing a platform for marketers to create and deliver effective lead generation and nurturing campaigns at scale. Marketo also provides the analytics for data-driven CMOs to have a more visible seat at the revenue table by providing measurable return on marketing investments that contributed directly to sales. It also fueled a transformation in marketing, where new teams were organized with Directors of Demand Generation at the helm and introduced Marketing Qualified Leads (MQLs). However, around 2015, I began to realize that this model, although better for the moment, was not fully optimized for SaaS and traditional companies (for example, banks and health care providers) undergoing digital transformation (DX).
What made things even more convoluted in these processes is that MQLs, once they are handed to sales, are still not qualified for pipeline forecasting. As a result, sales teams spend time looking at and further qualifying these leads into Sales Qualified Leads (SQLs). This not only makes things inefficient, but its a contributor to the CAC woes suffered by many SaaS companies.
Widely published Industry benchmarks show us that customer and employee referrals convert at ~25% and webinars at ~18%. Meanwhile, email and related mass-lead-gen campaigns convert at just 1%. Thus, 99% of the effort that goes into dealing with these leads makes things pretty inefficient, even with modern marketing automation tools. There is a reason for this too, think about why referrals and webinars convert at higher rates? Is it because they are more engaged? Is it because of increased personalization? Is it because they are getting to the point with their product? Yes, yes and hell yes!
Obviously, there is a place for marketing-led GTM strategy, or there wouldn’t be so many successful marketing automation companies. However, I’m here to tell you, that for SaaS and other software-enabled companies, this whole thing is foobar and MQLs and SQLs need to die.
Enter Product Qualified Leads (PQLs). I believe that a new GTM model is emerging and this new product-led strategy will become the preferred model for SaaS companies and other companies undergoing Digital Transformation. I also envision a new organizational culture emerging, geared toward generating PQLs rather than MQLs and SQLs. It is also a more customer-centric culture that will fuel the next evolution of GTM strategies and move us away from raw, mass-lead demand generation to one that is geared toward creating and curating customer experiences. It is more efficient, more CAC effective and creates longer lifetime value for companies.
So if you’re tired of reports showing that you generated thousands of leads from your expensive demand-gen efforts, nurtured them to hundreds of prospects and in all that effort and consternation you closed single digit customers, you’re not alone. I believe there is a better way and that is to lead with your product as your primary GTM channel. Don’t focus on getting leads into an MQL stage, focus on getting the right customers into your product, nurture them into your segmented PQL (pickle) Jars and convert those that have met your minimum adoption thresholds to customers. Those prospects will be much more efficient and more relevant, all while improving your forecasting accuracy.
At Aptrinsic® we believe your product is your best salesperson and marketing channel. We also believe using a product-led GTM strategy will help companies acquire, retain, and grow customers by creating realtime and personalized experiences driven by product behavioral data.
Read the full “Mastering Product Experience: How to Deliver Personalized Product Experiences with Product-led Go-to-Market Strategy”
In this book, we share what we have learned about what it takes to succeed with a Software-as-a-Service (SaaS) company. We explain how to deliver a winning customer-centric experience strategy to your customers throughout the customer lifecycle, from acquisition to up-sell/X-sell. We show how to implement a faster and more effective product-led go-to-market strategy to meet changing customer expectations. And we share how to optimize Customer Acquisition Cost (CAC) and increase Customer Lifetime Value (CLV) by building better contextual relationships through personalized product-driven engagement.
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