Skip to main content

Product Qualified Leads and the New Rules of Engagement for Enterprise Sales and Marketing

I’ve been fortunate to work in sales my whole life—first at companies like Oracle, Google, Salesforce and Box and now a Growth Partner at Emergence Capital for the past four years. My role here is to advise early-stage enterprise SaaS portfolio companies on how to grow from low single digit to double digit and even triple digit ARR.

This is such an exciting time in the industry as enterprise sales and marketing leaders worldwide grapple with a tectonic shift in the way in which software is bought and sold. Over the last few years, software companies have pivoted overwhelmingly from ownership to SaaS-based freemium subscription models which enable customers to test, try, see, and play with new applications before they pay a cent. This shift has fundamentally altered the Sales and Marketing functions, forcing teams to scrap their time-tested, but now outdated engagement models and build entirely new playbooks.

Recently, I sat down with Mario Martinez Jr., the host of the popular Modern Selling Podcast to talk about product-led growth and the future of sales. We discussed how I advise teams to approach the new enterprise Sales and Marketing rules of engagement. Given the incredible response from his audience, I wanted to capture those insights in more depth below.

Marketing’s goal is no longer lead generation. It’s product usage.

In the old world, Marketing created campaigns with the goals of generating and capturing leads. Then SDRs (Sales Development Representatives) would move those leads through the sales funnel to qualify them and set up appointments with AEs (Account Executives). In order to capture leads, marketing gated all of their content—from events like webinars to written content like e-books—in order to force prospects to reveal their name and contact information. SDRs then followed up with those leads, while also engaging in cold outreach. These old world techniques are as outdated as the client-based software they were initially designed to sell, yet they still permeate many Marketing and Sales teams today.

Today, marketing’s goal is no longer to generate leads. Driving people to a web form so an SDR can follow up with a phone call is an outdated motion. Instead, Marketing’s job is to help drive PQLs (Product Qualified Leads) by getting users to use the product. Some of the tactics may be the same (e.g. events and webinars), but the desired post-event action—namely to encourage product usage—is fundamentally different. 

SDRs and cold calls are out. Product specialists and PQLs are in.

In this new world of Product-Led Growth, the role of the SDR is vastly different than it used to be. The role of the SDR, which was predominantly focused on following up on inbound leads or cold calling, is either gone or severely modified. Instead, modern enterprises are replacing SDRs with Product Specialists. A Product Specialist can be a former SDR, a CSM (customer success manager), or even a Pre-Sales Engineer (depending on how technically complex the product is). The key distinction here is that a PS does not seek MQLs, with whom they can follow up. Instead, they wait for a new user to take specific actions in the product. These users who provide the right “signals” are not MQLs, but PQLs (Product Qualified Leads). 

It is only after a PQL triggers specific signals that the PS engages with them. They don’t seek out MQLs who they can convince to buy their products. Instead, they speak to actual users to 1) ensure that they’re actively using the product and 2) to help those users extract more value from the product. They’re signal hunters looking for indications about how the user is using the product, whether they are getting value out of that usage, and whether, with guidance, there's an opportunity for them to get even more value from that usage. 

This process is akin to buying a Tesla, taking it home for a week, and then having people reach out to you after a week to find out how you’re enjoying your car and then reaching out after a few more weeks to tell you about features you haven’t even started benefitting from yet.

  • Is the user actively using this product?

    For example, have they taken the Tesla for a drive and if so, how often? If they’re not using it, how can we encourage usage? At Box, we learned that if you hadn’t uploaded a file and shared it within seven days, there was a good chance you’d end up churning. Companies want to identify these kinds of triggers so they can take action and encourage usage.

  • When should I follow up to offer additional help?

    In the Tesla analogy, this would be after a few days and then after a couple of weeks of usage. The exact timing depends on your specific product and when there is a natural time to reach out.

  • How else could this user get more value from the product?

    What features haven’t they discovered or sufficiently explored?

  • Which colleagues are also finding value or could be if it were shared more broadly across the organization?

    With the Tesla example, this could be other family members. Often in software, this means other team members as well as colleagues in separate departments.

  • Who has authority and budget for purchase decisions?

    A five-year-old carpooling in a friend’s Tesla may love the car, but also may not have the sway and certainly not the power over the purse strings to convince their parents to buy one. Similarly, many users can enjoy a product, but not be positioned to make purchase decisions for their company. It’s the product specialist’s responsibility to ferret that out.

  • What was the previous environment like that prompted the adoption of this new technology?

    You must first understand the motivations and environment that led to the change and understand if those conditions exist more broadly across the organization.

Click here for Google Doc of these questions to save for future reference.

These conversations with product specialists involve some of the same content that an SDR would cover, but they generally feel less threatening to leads because they’re based on helping the lead realize more value from a product they’re already using rather than pushing a purchase. In these scenarios, the leads are already getting value out of the product and can expect to realize even more value immediately once they become paying customers.

Account executive jobs are as big and complex as ever

Once the product specialist has validated that there is in fact a SQL, this is the point where the AE steps in. If the product specialist has done their job and gathered all the above data, the AE can leverage real data to guide broader engagement conversations involving possible substantial long-term contracts.

Using the collected data, AEs are tasked with figuring out who the champions are who can make the right introductions, find budget ,and help build consensus to supersize usage from a small set of users to a larger set of users.

These conversations always need to create a sense of urgency to be successful. Too often, people are interested in a product, but are happy to push off sales for another year. That’s why 60% of well-qualified opportunities end up in no decision. For a buyer, the hardest thing to overcome is change. The status quo is comfortable financially and there’s little to no risk to their reputation. Even when the status quo is terrible, it takes real effort and urgency to get people to actively make a change. 

Finally, AEs need to offer value from the very beginning. Few executives will make themselves available for a sales pitch. But if you come to them armed with insights about what their competitors are doing or suggestions for how to implement changes in line with the strategic initiatives being driven by the C-suite and board, you’ll get that hard-to-land meeting right away. Remember that those first 90 seconds of a call set the stage for the rest of the conversation. Waste it, and that 30-minute meeting will only last for 5 minutes. But come prepared with a deep understanding of their business goals and that 30-minute meeting will lead to additional meetings and, eventually, a sale.


For more, listen to the whole conversation on the Modern Selling Podcast, episode #172

Follow Doug Landis on LinkedIn to hear the latest news, events, and how to get involved in Emergence’s community.