Empower your Life Sciences business with product qualified leads for Life Sciences

How to create outlook signature

welcome back to the metric stack podcast we're joined today by Wes Bush founder and CEO of product LED and best-selling author of product LED growth how to build a product that sells itself now I mean who doesn't want that right so the focus of today's episode is product qualified leads or pqls I'm joined by my co-host Laurent Thibodeau and my name is Alan Villa Wes super happy to have you on the show today awesome super happy to be on here it's a fun place to be out here thanks so much Wes we're glad to have you here and before we dive into the details of this metric could you just set the stage and give us some context for what we should be thinking about here totally so when you're thinking of like okay like what is product Cooper leads maybe it might be more helpful to base it on something that hopefully a lot of you are already familiar with which is marketing qualified leads it's nice cousin we'll call it so a Martin qualified lead for a lot of people is like okay you're trying to find the intent of one person who's a good fit like you're looking at demographic information and then also you're looking at like oh did they view your pricing page and all that stuff um what are they showing you that is like oh this is like someone who's interested in what we're doing um so that's your marketing qualified lead it's really useful uh can be abused easily it depends on how you set up your points for oh you get 50 points for your pricing page 50 points for your white paper uh all that fun stuff so like that's uh Mark the Cooper lead for your product cooperability the only thing that's a bit different is you're still looking at you know what who is a good fit you're still looking at okay what is the intent and all this stuff we're taking it one step further which is really saying oh who actually we went into our product and saw value who really got to that experience of like wow I I get this product I love this product so that's really a lot of the the differences between a very fundamental uh metric which is the mql this is the cousin so I'm gonna I'm gonna ask maybe a super simple question but it's product qualified leads versus marketing qualified leads so almost everybody can apply an mql sort of philosophy but do you have to be a a product company to really use pqls and maybe that's an obvious question but you know is it is it really limited to only those kind of companies no not at all so like you will definitely see this a lot more in like the software space that's kind of where the term like originated but um any company can be product LED and I say product LED is like a way where you're actually giving your product away for free and people can actually experience like what that value is um and see for themselves like is this a good fit for me or not um I'll give you an example like even for cologne or uh perfume or even cars like whenever you're thinking of like buying these um things it's like oh can I smell it okay great that was awesome where it's like the exact obvious like oh God like so glad I didn't buy that one and the same thing with cars it's like okay how can we make that experience and so in a lot of these other interactions what's often theirs like maybe the sales person's there and saying oh you didn't like it okay great uh let me actually try and find you something better that would be better suited to what your needs are like what kind of smells do you like um same thing with the car it's like oh actually you come out of that card like your smile filing or you're like just like oh that thing like a good thing I avoided that that was a lemon um so we are tracking this uh in different ways but a lot of times it's not like oh okay we're actually looking at like percentages like how many people actually get to that moment of like I get this um so yeah if you're doing like physical products there's a lot of different ways you can measure it it's just a little bit trickier sometimes okay so that's I mean that's super helpful so it's not just limited to software right this does have very broad applicability but sometimes it has sort of a low-tech way of of of listening to what people are actually saying when they're experiencing the product so you're giving me the heebie-jeebies here with the cologne analogy I have a teenager in the house who's putting on way too much right now I can relate to some stuff that's not as good a fit but let's drill in a bit to the metric itself could you just Define even more specifically what exactly is the metric and how do you calculate it totally so how you calculate that is going to be different for every single business if you are saying that cologne it might be like okay like it could just be a simple question where you're asking like how did you find that it's like good bad okay good if it's good they're qualified if not then it's it's not in like software products you might actually look at what they're doing so for instance uh if we're looking at it like clip folio's case it's like okay we might think it's when people integrate their data and they integrate it with clip pulley it's like it's actually not that though it is when they are actually seeing their dashboard for the first time they see all the like three or four Integrations in one they're like oh cool they save me so much time I was doing this manually um that's really when you're thinking about like how do you set this up right I see a lot of companies make the mistake of like oh it's just like they got to do XYZ but it's like no what does that enable them to do what is that other thing across the other Hill that it will allow them to do so when you're setting it up I would just focus on like one step further what will this enable someone to do and then track that piece so you're you're looking for those wow events that somebody has this just amazing experience and that gets them one step closer to actually finding value in your product those are then the folks that are going to go further going to have good sales interactions Etc but what about Activation so is that the other cousin I mean we talked about you know mql being sort of the marketing and the pre-product cousin then there's pql is activation rate or activation you know monitoring is that something very related as well so you're if you set it up right activation is the same thing in a lot of ways as your protocol by lead you're measuring that specific moment and the only difference is in some products it's like it's a one-off thing and so it's like okay we're just looking at like that first activation moment but some products it's like oh I'll go into it multiple times and I could become product qualified if you will uh once every month and like that's what they call like a active account and so it is one of those things that it has many different shapes and forms of like depending on how your product will look like but um generally speaking yes it is a very good uh indicator of activation if you set it up right and why I mean product-led growth is an enormous movement and it's it's even gaining steam now why is this particular metric so important for companies to understand and wrap their heads around yeah because when you think about the whole I guess like movement if you will and Wes don't be shy I mean I think I think you're the father of this movement right so I am um but when you think about like okay what is this tectonic kind of like shift of the way we're doing business as well I always look at like okay what makes product LED companies win versus maybe their counterpart like let's say a more sales lead company where like the only way you can actually buy the product is you have to talk to someone okay so like that sales ad company one of their metrics of success is like okay from the very first touch point to like going through the sales sequence it's like it moves from like acquisition and like we're getting you to our site so like monetization very quickly so as a company in a culture that that really rewards like okay the success is equated to almost like closing the deal in a way especially early on whereas in a product like company the big tectonic shift I'll call it is like okay yeah you're still going to acquire people but the next thing you got to do is actually engage them if you don't actually engage them if you don't actually give them a good exp um we have all done this where you sign up for an application you don't get to value or it's very hard to sign up experience sucks you just don't go back to it so it's like it's game over if you don't serve your users well and so um this product called by lean metric is really important because it's one thing to say like oh yeah we're gonna like you know show value not just tell people about it but like this is like oh you're actually like aligning incentives internally like your marketing team now has to care about like yeah sign ups reports and but like tie it to how many protocol by leads same thing for your sales team they're looking at like oh how many of these product leads could we talk to and help them like upgrade and how could always improve that your product team will look at this and say you know what we're only getting 10 of particle by leads what can we do to get like you know 20 or 30 of our sign ups successful and so it's really cool when you see this internally inside an organization because it just aligns everyone's interests with supporting the success of the user and I always I've abused this in our program which is this one saying it's like your user success will eventually become your success and you'll always see that in product companies the ones who are the best at this are the ones who are ultimately succeeding the most uh you know I think I mean we just need to pause on that for a minute because that is so incredibly important you know so many companies have made that shift from very much an expensive sales LED motion where the value is almost sort of a second consideration and and consumers and and buyers of software they they just don't have the patience for that anymore today's today's users need to see value and they need to experience that early on and I think that's also in part why so many people when you ask them do you want to try the product or do you want to you know talk to a sales person they're like no I want to try the product you know I'm I'm frankly I'm kind of sick and tired of talking to sales people I want to just try the product right and as it turns out as you said it's a less expensive more honest sales motion that actually ends up if your customer is successful you're successful so I think that's I think that's so absolutely fundamental and I think this is why so many people are starting to pay attention to this metric for sure I was gonna say I love bringing in the user perspective often when I think of product-led growth I think about well what a customer-led growth what about value-led growth and you're bringing those two things together can you is there an example in the companies that you've worked with or coached where really looking at this and digging into your product-led growth metric led to an aha moment for that company yeah so one of the biggest like I guess aha moments you kind of touched on it too for a lot of these companies is even when you think about how you construct strategy in a lot of businesses like I've read so many books on strategy and a lot of them always start with like what is Our Winning aspiration what should this this how should we win and it's like all about you right and so it's like okay this is your goal like we're gonna become the market leader great okay that's like I mean this part of like level setting and getting the right talent to support that that's great I 100 support that but then it's like how do you get there it's like okay the only way like your business exists to serve and it exists in this case sort of users we're actually going to actually wait for it use your product products and get value and love it it really does need to kind of tie back to that user's success and I think whenever like we help companies understands like okay what is that and get her on the same page about like okay what does that actually look like for your specific business and there is going to be multiple different definitions of that based on all the different user types you have but when you get clear on that it's like okay let's align everyone's interests and let's actually make this like one of our core kpis even as a business um so that we can better support our users and actually track this and get better at helping people over time and that's cool because it all comes down to like okay yes one understanding it then two it's like how do you optimize it how do we get people to this outcome faster and that's really where products become very sticky because you're like oh I just started this and I'm already getting to Value I get excited as a user and when you start checking that internal user business you just get there much much faster so let's actually dive back a little bit or take it back a little bit to understand this metric a little bit more because you said every company is going to have a different definition of what pql means and and how it adds up so how does one actually optimize for that is this is this trial and error is there a more systematic way of doing this is it just user behavior in the product or are there demographic or behavior or other kind of scores that come into play totally so um like there is some things that for like any kind of business I'm trying to like related to your audience too around like let's say if you're like even an agency okay what could this look like even if people are signing up as a customer or something like that it's like okay the first seven days what are you gonna do um in this experience maybe if you're a Facebook Ad Agency is like okay we're gonna get all your campaign set up they're gonna be launched and you're gonna have like your first few leads in the first seven days so it's like how do we accelerate that uh value for a customer because this is really all about how do we build trust and for a lot of like let's say software products um I hear this again on our podcast is like the first seven minutes what should we do in the first seven minutes to relieve someone walking away with like wow like this they get me I've done something really cool if you're setting up like a let's say a chatbot on your website it's like okay I've embedded the code that was easy enough and um I'm ready to basically accept my first conversation from our website how cool um so there's a lot of those things where it's just like unpacking what does that initial value look like for someone uh what's the first little small quick win that someone could do and this really just comes down to how well do you understand your users and your customer so when we always are even trying to work on this at our own business as well it's like what are some of those like baby wins if you will where it's like someone could do this relatively quickly and it would actually be super high value for someone to get around and get clarity on this thing and you're really just trying to find like what might those things be for your specific product and then just a line okay let's test this and what you'll always find if you pick the right metric is that there's a very strong correlation between pql and people actually paying for the product you will always find that if you don't don't have the right one try again and that's that's okay you might not get it for the first time and that's fine yeah so that's so that's interesting so so you're gonna have to have a hypothesis on what that wow event is and you know that'll probably take a lot of testing and iteration until you find it but the other thing that seemed common in all of your examples was there seemed to be a really important time element so they want to get the X by the shortest amount possible um how important is that I mean people have so much choice and are so distracted these days so is it important to always think about what value are they going to get in a certain amount of time totally and like this is one of the like for more advanced folks who are like okay I already have like a pro qualified lead um this is the next kind of level is like you're starting to measure like how long did it take them to get to that point and then you're starting out mine's like okay yeah we're at like let's say 40 to 60 of people are getting to this moment but like how could we get 40 60 in that first week because what you always see on like any kind of like cohort based analytics is like week one high engagement week two lower engagement week three and it's like lower lower lower for like products that just don't have that fit yet and so that is something where absolutely you're on to something it's like you're trying to like narrow that down eliminate that as much as possible and what often happens um I see this all the time sometimes is like you're trying to just ask the user like okay what could we do to make this faster for you and sometimes there's things like oh your onboarding process was like really long you're like great okay this is something we can fix it's in our control and then there's always going to be some times where it's like hmm I gave the code to the developer and they're not able to launch it until Q4 like oh no like I can't do anything here this is development team so like one yeah you could like maybe create a product without that like you have to have the embed maybe that's in your control probably not it depends on what you're doing but two it's like well actually maybe you need to have the right setup so if you were a 14 day free trial that just does not float with them because now they have to purchase it to see the value kind of thing so that's actually more of a interesting discussion that goes on around like well maybe you just have like some sort of usage based trial or something like that which enables them to access that value well without getting blocked I love that really look at your business model um I want to ask you about benchmarks Wes and is there a specific benchmark that separates the leaders from the laggards here on this pql totally so like really good world-class companies and they're in that 40 to 60 range for product qualified leads that is like what I keep seeing again and again is like they're around that range now if you're just starting out and you're like okay we're at like five percent bear in mind it's normal to see like that low or even lower than that's because you're just getting at the very beginning of like okay what you measure uh will matter and focus on and you can always improve that over time and make it easier for people to get to that specific point so if you're in that range when you first set it up that's totally fine but there's there's nothing you want to work up to some of those higher percentages for sure so you can improve your product you can change your product obviously I mean that's expensive you can change the arm onboarding and answer the tutorials and and that's maybe slightly less expensive what about even before they start a trial I mean you know if we were to talk to April Dunford she would say oh figure out who you're actually even getting in the door in the first place so does that you know who we're getting in the bat that best fit cohort does that impact pql so that's always going to be a factor is like who are you targeting are you targeting the right people um but I would tie it all back to behavior design so I'm not sure if you're familiar with like BJ Fogg he has this behavior model and he basically kind of shares that you know what if you want to change someone's Behavior which is what exactly what we're doing especially if you have a software product you're changing the way somebody does something he's like there's three variables you need to worry about the very first one is motivation so like if you're looking at like we have five six different kind of like user types um look at the one who has the highest motivation this is the person who's like I'm highly motivated if they're highly motivated chances are they're probably willing to pay for it and not always but a lot of times they are and so you're looking for like who has highly highly motivated this is probably a problem for them right now and then two you're looking at the ability so like how easy is it for them to do this if they're not tech savvy and like even if they're highly motivated they might not be able to do it within your product so you're looking at okay ability something you can potentially leverage through like templates or making a product easier to use um so it is sort of in your control but it's also sort of not depends on who where everyone's coming from a different place so there's the ability and then the last kind of key part of changing someone's behavior is the prompts so like there's internal and external prompts you can send them a barrage do not recommend that but you can remind them like every single hour if you wanted to like check into the app go to this next step to become a product qualified lead you would never say that but get the value um and then the internal triggers is over time when you develop this Behavior you hope like when you look at messenger it's like oh I want to like reach out to your friends or something I just checked messenger now it's embedded in my behavior so that's the the ultimate goal but you're trying to find the users that are going to best align with those three things cool so let's talk about family you mentioned cousins you mentioned mql as a cousin are there other siblings uh cousins aunts and uncles of this metric that we should be thinking about so it's not so much like aunts and uncles of this particular metric that I think are really important but I think it's really the integration of this that makes it a true product LED family organization there we go because when you're all working together on this like your marketing team has a piece of their quality metric tied to this your sales also has part of their metric tied to this what you're really just doing is you're creating one team that really truly does care about user success and is helping users become successful so it's not so much another metric as it is how do we embed this into everyone's workflow so we're always thinking about how do we make the user successful you know what's cool about this pql um or where it fits is that it's it's early enough that it is a beautiful leading indicator it's super tight to user value and you're right everybody in the organization can rally around this thing that is actually truly something that will improve somebody's life so Wes any last words of advice for somebody who's just starting to think about either product LED or or applying pqls yeah so even if you don't have like a free model or anything like that just start measuring this as soon as you can you might need to have like product analytics or something like that but the second piece of advice here is really don't try and overthink it too much this is one of those things that I have worked with hundreds of companies that trying to find this magical metric and here's like the deal it's like okay most times we can get like 80 of the way there and just by thinking through putting ourselves in the users shoes talking to users we can get a good sense of I think this would be meaningful to them and this is a meaningful hypothesis let's call it and let's measure it and then if you start seeing okay this many people got to this moment how many of those converted to paid was it like much higher than the average you can start to see like where are we close and then you can just evolve it over time this isn't like a set of forget it kind of metric it is one of those things where it's like we're always trying to improve it over time Wes I really want to thank you everybody Wes Bush founder and CEO of product LED I mean we've talked about the honesty the motivation and just maybe the Simplicity of how to apply tqls to your business so don't waste any time get started right today Wes thank you so much thanks so much thank you Wes if you enjoyed today's conversation about metrics and data be sure to check out metric HQ our online resource for the metrics that matter most to you and your business