Karishma Rajaratnam leads Growth Marketing at Vidyard, an online video platform built for virtual selling. Vidyard hired Karishma after pivoting to a product-led growth model, one that Karishma is an expert in. She serves as a PLG mentor for TechStars and created robust user activation, retention, and monetization engines while working at Chargebee. As an early-employee and growth marketing leader, she helped develop the PLG strategy that scaled Chargebee to multi-millions in ARR.
But Karishma’s path to PLG wasn’t a straightforward one. She started her career in academia, researching behavioral science. And after witnessing the rise of B2B marketing, she had the inkling that she should take her skills and knowledge to the field. So Karishma established her own consulting company to apply behavioral science techniques to digital marketing - a path that led her into developing the marketing strategies of several SaaS businesses.
We sat down with Karishma to get her unique perspective on Product-Qualified Leads (PQLs), why they are different from Marketing Qualified Leads (MQLs), and how she’s establishing a joint MQL / PQL process at Vidyard.
Q: Karishma, thank you so much for being here today. To kick us off, can you tell us: What is a PQL?
Karishma: At its core, a Product-Qualified Lead, or PQL, is a user or account that has derived value from your free product or free trial. Of course, a single feature or function doesn’t necessarily lead to value, so a PQL could have several attributes or have taken several actions in the product to convince them to turn into a paying user. The end goal of identifying PQLs is to convert them to paid (hopefully enterprise) accounts faster.
For example, at Vidyard, strong indicators of a PQL are the number of videos a person creates, the number of views they get on those videos, and the number of people signing up within a domain. Let’s break this down. To start getting value out of Vidyard, users need to make videos. And users want to see that they’re getting views on those videos to feel like Vidyard is making a difference in their sales communications. The more views they get, the more they want to create videos, thereby getting more entrenched in the tool. Finally, to close an enterprise account, sales teams need to know there are enough freemium users getting value out of Vidyard to persuade a decision-maker to write a check.
PQLs are ever-evolving, and your definition of a PQL may change as your sales team matures and your product strategy expands. We are currently testing different combinations of product usage and firmographic signals with our sales team, to iterate on our PQLs and arrive at the ideal PQL definition.
This involves testing various Vidyard free user outreach lists that are built based on a combination of product usage metrics. Our sales team reaches out to these users with the intention of booking a demo and opening an opportunity. This gives us an understanding of which product signals are best predictors of monetization and sales engagement, and which ones are not.
Q: How do you know which product signals to test, and which metrics might signify a PQL?
Karishma: Great question. Some companies have a very prescriptive way of determining what factors go into a PQL. While we certainly reviewed product usage data, we started this project by interviewing our sales team. Gaining anecdotal evidence about who was easier to sell to helped us hone in on the correct product data to look at. For early-stage companies, putting time and resources towards a hunch can feel scary. But oftentimes, they don’t have enough data to analyze.
If you have at least 100 closed deals, I suggest taking a close look at closed-won deals and examining their users’ sign-up process and product journey. What activities did they complete before requesting a demo? But even if you don’t have 100 or more deals, consider talking to sellers who have closed deals and figure out what they emphasized in their pitch to get the decision-maker to talk to them. Talk to the CEO and Head of Product to see if they have suspicions about what’s driving users towards becoming paying customers as well. Interview current customers to get their perspective, too. These conversations are valuable data points when trying to find the right “aha” metrics with the little information you have.
Q: I see, and how would those companies know when they’ve found the right metrics?
Karishma: Open opportunities should be their North Star. Gauging how many more open opportunities result after serving up PQLs is a great way to determine if the leads you’re qualifying are worth an AE spending time nurturing.
Pay attention to which PQLs don’t end up closing as well. Figuring out why they haven’t converted can help you tweak your definition over time to ensure you’re not chronically overvaluing leads. Forward any feedback to the customer experience or product team as well.
For instance, if a factor that used to be a significant step towards conversion isn’t working as well anymore, that should be on product’s radar. Similarly, if there is a new feature that’s producing great PQLs, have the customer experience team emphasize that in their onboarding materials.
An example of this at Vidyard was our Chrome extension. We found that freemium users who downloaded the Chrome extension had better retention rates (increasing their likelihood to turn into paying customers). Accordingly, our Product and Marketing teams added prompts to install the extension in our in-app onboarding process and email drip campaigns.
Q: Traditionally, SaaS companies use MQLs. What is the difference between an MQL and a PQL?
Karishma: MQLs are users who have responded to some form of marketing, whether that be signing up for your newsletter, interacting with the website, or clicking on an ad. So MQLs are based on marketing actions, whereas PQLs are based on product actions.
At Vidyard, interacting with marketing material is a significant sign of potential user growth. We partner specifically with sales platforms that sellers already love and use on webinars and content. We see a ton of salespeople come through our signup funnel after a webinar is over or someone downloads a piece of content. Our Salesforce instance also integrates with Marketo, so our sales team has insight into what events users signed up for and the content they’ve downloaded to work that information into future sales calls. Because it’s so easy to figure out how to direct future discussions, our sales team has naturally gravitated towards MQLs.
Q: How are you encouraging the adoption of both MQLs and PQLs?
Karishma: Right now, I’m developing a hybrid metric that combines product usage and marketing interactions into one score. Different activities would have different weights to account for their relative impact on conversion. The tricky parts involve nailing down proper weighting, communicating the algorithm to the sales team, and having a way to show whether a lead leans heavier towards the marketing side or product side in Salesforce. Equipped with this information, sales managers could adjust their messaging to fit the marketing material someone’s been consuming or give product-focused users more use cases to try.
Vidyard wasn’t always a PLG company, so this is something new for our legacy team members. But there’s a lot of excitement about PLG at the leadership level, which trickles down to other GTM teams. To keep this excitement going, we’ve had to reevaluate our incentive structure and consider forming other “sales assist”-type teams (in our case, “video coaches”) that can close product usage gaps before conversion. In addition, since we are hiring more, we can focus on getting the right people who will excel in a PLG environment and take our lead generation and sales processes to the next level.
Q: Amazing. Any parting thoughts for PLG companies looking to beef up their lead gen process?
Karishma: The critical thing to remember is to infuse human connection into the lead gen and sales process. Yes, the point of PLG is to be self-serve, but users still need some hand-holding along the way. If you can proactively answer their questions and support them in their onboarding journey, you’ll be lightyears ahead in the sales process. Our video coaching team has been instrumental in engaging our ICP users early in their time with us 一 regardless of whether they are an end-user or a decision-maker. We want to make our users feel like Vidyard is the best solution to their problems and that they already see success before they buy. This feeling translates to an easier, more streamlined PLG sales cycle.