One of the most common questions we get at Variance is, “what Milestones should we start with?” Of course, everyone has heard of a product-qualified lead (PQL), but most aren’t sure how to define it yet, and they’re unsure where it fits into other Milestones. That’s why we added our Milestones to our homepage:
Since going through many of these conversations, I’ve suggested that everyone start with the same simple Milestones. I think of these as “Minimum Viable Milestones”:
- Signed Up
- Product Qualified
- Expansion Qualified
The beauty of those five is that they form a straightforward product funnel that should be an excellent place to start for any GTM team.
Let’s go through each individually to discuss what it is and why it matters.
Who has signed up for your product?
This one doesn’t take much to figure out, but it matters since all the conversion percentages will be calculated from your signed-up accounts. So essentially, any product activity should qualify to check off Signed Up.
Who has taken the product steps necessary to become active?
There’s a lot of really interesting debate about what an Onobarded Milestone should include. Some companies call it Activated and, in my eyes, make it a little too much like their Product Qualified Lead (PQL) Milestone. Onboarded should be super simple: an account is onboarded if they’ve taken the basic steps necessary to use the product. For us, that’s about setting up a data source. For Slack, that would be inviting another user and sending a message. In Jira, it would be about creating your first task. Onboarded isn’t “aha moment” stuff, just the basic steps required.
For you to use Variance, for instance, the one thing you absolutely must do is connect a data source. That can be our variance.js, a data warehouse, or any of the CDPs we work with, but you’ve got to get us data somehow. Therefore, our Onboarded Milestone is heavily dependent on making sure that data lands in our system. If we don’t have it, you can’t be onboarded.
Product Qualified (PQL)
Who has taken the product steps necessary to see enough value in your product to transact?
Next up is Product Qualified. PQL is probably the most discussed Milestone, particularly as it pertains to product-led growth. For an account to reach 100% Product Qualified, they should have taken all the actions necessary for you to believe they have seen the value in the product. People describe this as the “aha moment,” and I think that’s a good way to think about it. Another is to say, what are the set of actions an account must take to convert at above 70%? The answer to that is obviously going to be super dependent on the specifics of your product, pricing, and customer, but if your PQL to paid conversion is under 70%, then there’s an issue with your product, pricing, or your PQL definition.
Again, not thinking of PQL as a binary is also helpful. Understanding whether an account is 50% of the way there towards PQL or 90% is a key insight into how and when to apply pressure to the deal.
Who has transacted?
Again, this one should be relatively simple and is more about measuring conversion rates than offering insight back to the team. Without a transacted Milestone, it’s impossible to know your PQL to transacted conversion and whether you’re achieving the 70%+ rate.
Expansion Qualified (EQL)
Of transacted customers, who are showing product signals that would implicate an expansion opportunity?
Finally, we get to expansion qualified. This one is the most complicated and depending on the product, company, and customer, may require multiple Milestones to manage. As opposed to the other Milestones, your EQL should probably account for the Transacted Milestones being complete so that you know an account is actually qualified for expansion and not just showing early traction signs. Once they’ve transacted, you’re generally looking for:
- Team growth
- Usage growth
- New feature/module adoption
Any or all of these can be Milestones along the expansion journey.
Pulling it all together
Beyond the power of being able to cut your base based on their Milestones and be alerted as they enter and exit, there’s some real power in pulling the Milestone data out and understanding a few key things:
- Conversion rates: at what rate are you converting between Milestones? For this, make sure you measure from the previous Milestone to 100% complete at the next Milestone. For instance, if you’re measuring the conversion rate from Onboarded to PQL, you need to look at only customers that got to 100% complete on Onboarded and then 100% complete on PQL.
- Average time in Milestone: another key metric is the time spent in a Milestone. When did they enter and when did they exit, and how does this rank against the averages?
- In-Milestone Distribution: if you’re trying to understand the mechanics of a specific Milestone, it’s helpful to look at the distribution of accounts in the Milestone vs. the criteria they’ve checked off. For instance, if your Onboarded Milestone has three criteria (invited 1 user, connected 1 integration, created 1 task), it’s good to know how many of the customers who haven’t completed the Milestone have completed zero, one, or two criteria and which ones those are.
That should be enough to get you on your way to incorporating Milestones into your sales process.
If you have any questions, want to try Variance, or want to talk with us about adding Milestones to your account. Please get in touch.