What Is A Product Qualified Account?
In product-led growth (PLG), specifically in the B2B context, a product qualified account (PQA) is a client using a product in a way that suggests the user is getting value out of an offering and might be ready to buy more.
Unlike traditional models that rely on sales interactions to qualify accounts, PQAs are identified based on how they interact with a product, focussing on product engagement rather than sales touches. By exceeding a certain threshold of usage and activity, PQAs signal buying readiness, indicating a higher likelihood of converting into paying customers.
Additionally, PQAs target teams, not individuals, meaning there are multiple users within a company who are all finding a certain product valuable.
What Are The Components Of A PQA?
The components of a PQA can vary depending on the specific product and business, but there are some general factors that most SaaS companies consider:
- Product Usage Metrics: This includes things like frequency of use, features used, and duration of use. For example, a PQA might be defined as an account that has at least three active users who log in at least twice a week and use at least five of the product’s core features.
- Engagement Levels: This goes beyond simply using the product and looks at how users interact with it. Engagement metrics could include things like clicks, shares, comments, and completion rates for key workflows. A PQA might show high engagement by having users actively create content, collaborate and use the product innovatively.
- Behavioural Patterns: This involves understanding how users are typically moving through a product and what success looks like for them. By analysing user behaviour, a SaaS company can identify patterns that indicate users are getting value from the product and are likely to stick around. PQAs might exhibit behaviours such as completing key onboarding steps quickly, referring colleagues to the product and taking advantage of advanced features.
What Is A PQA Score & Why Is It Important?
A PQA score is a numerical metric summarising how likely an account is to be a valuable customer. It considers various aspects of how the account interacts with a product, providing a data-driven way to assess the user’s purchase intent. There is no universally accepted formula for calculating a PQA score. However, most methods involve assigning weights to different components of product usage and then summing them up. The following represents a typical breakdown of the concept:
- Activation: This measures how quickly and easily users start using the core features after signing up. A high activation score indicates users are finding the product intuitive and valuable.
- Regular Usage: This reflects how consistently users engage with the product. Frequent logins and consistent activity suggest users rely on the product for their work.
- Depth Of Usage: This goes beyond just logging in and explores how deeply users explore advanced features. High depth of usage suggests users see the product as a strategic tool.
- Value Achievement: This assesses whether users are achieving their desired outcomes with the product. Completing key workflows or exceeding usage targets indicates the product is delivering value.
Each component receives a score (typically between 0 and 1) and is multiplied by their corresponding weights to reflect their relative importance for a business. The weighted scores are then summed up to get the final PQA score.
PQA scores offer several benefits:
- Identify High-Value Accounts: By prioritising accounts with high PQA scores, sales and marketing teams can focus their efforts on leads most likely to convert into paying customers.
- Data-Driven Approach: PQA scores provide a data-driven way to assess customer potential, replacing subjective judgement with a more objective measure.
- Improved Conversion Rates: By focussing on high PQA accounts, companies can optimise their sales funnel and improve overall conversion rates.
What Kind Of Role Does Product Qualified Account (PQA) Play In Product-Led Growth?
In product-led growth, product qualified accounts are critical in identifying the most promising leads and optimising the customer journey. The following is how PQAs contribute to PLG success:
- Focusses On Product Value: PLG prioritises the product as the primary driver of user acquisition and conversion. PQAs ensure that sales and marketing efforts target accounts actively using the product and experiencing its value. This data-driven approach avoids wasting resources on unengaged users.
- Prioritises High-Intent Accounts: By identifying PQAs, companies can prioritise accounts demonstrating buying intent through product usage. These accounts are more likely to convert into paying customers than those with minimal engagement.
- Guides Product Development: Analysing PQA behaviour can reveal how users interact with a product’s core features and identify areas for improvement. This user-centric approach helps optimise a product for maximum user value and conversion.
- Validates Product-Market Fit: A healthy pipeline of PQAs indicates a good product-market fit. By attracting accounts that derive value from your product, a SaaS company gains validation that it is solving a real problem for its target audience.
