Distinguishing a Lead From a Prospect
No matter the size of a business, its main marketing focus is drawing sales leads and prospects through the sales funnel. So what is a sales lead and what is a sales prospect? We’ll show the difference between these two terms so you can focus on campaign creation that draws leads and turns them into sales prospects.
In marketing, leads and prospects are universal terms. Yet most people wrongly define them. Often, leads and prospects are mistakenly referred to as interchangeable, and many internet sources neglect to clarify the two meanings. Our first step should be to define each, so your demand generation approach will be directed in the right way to develop marketing strategies that target attracting leads and prompt them along the sales funnel.
What is a Lead?
A contact at the top of a sales funnel not yet qualified is a lead. For any business, sales leads are crucial for continuous growth and prosperity. In a typical sales process, lead generation is the first step. The most basic way to comprehend this term is to know a lead starts the sales journey. The lead is one who may have been contacted by a cold call, or has downloaded an eBook or white paper from your website. A lead might have expressed some interest in what you sell, but you have no background indicating to what degree, for what reason, nor when the purchase might take place.
Your only information might be a lead’s name and email address, but if you’re fortunate, you might have more demographics. This limited information is known as a basic lead, or a sales-qualified lead (SQL), which means your lead has been qualified, and perhaps profiled, by your sales department as a true lead needing your product or service, ready for the next stage in the sales funnel.
For eCommerce, the most frequent lead type is from a site click-through, where the lead has submitted information into a contact form. Generally, marketers contact leads as a group through campaigns directed toward target audiences.
In summary, the lead has given you minimum information to indicate an interest in a potential purchase. Your next step is to engage the lead to gain more information about that person in order to convert your lead to a prospect.
What is a Prospect?
The key distinction between a prospect and a lead is that by becoming a prospect, your lead has transitioned from one-sided communication and is now engaging with you. This response to your sales message, such as in a website ad or email, indicates your lead has actual purchasing potential by displaying interest and has become a sales prospect.
In the typical sales funnel, once the lead initiates a response, the lead is now a prospect and nurtured along through to conversion. Once a highly-qualified prospect develops a strong likelihood of becoming a customer, the prospect is a sales opportunity.
Marketing Approaches for Leads and Prospects
Having the understanding of the difference between leads and prospects in the sales funnel, it’s obvious each should have a different marketing approach.
As a lead has not reached prospect status, it's critical to realize that you must adapt your strategies to accommodate the lead. There’s no one-size-fits-all when it comes to leads and prospects. Rather, your focus should be on furthering your lead through the funnel to develop into a prospect.
Before your initial contact, you must qualify your lead to ensure it’s a true lead. Does your lead fit your brand’s pre-determined lead criteria? For instance, you might limit your leads to a specific industry or to working at a certain-sized company with a minimum yearly revenue. Any leads failing these criteria would make conversion efforts meaningless since they would not likely have any interest in becoming buyers.
After verifying you have true leads, your goal is to entice them to consider a purchase. With prospects, you know they have interest in purchasing, so your objective is to close the sale. Having already identified your prospects’ needs, you must reemphasize to them the value and benefits your brand can offer.
Prospects should share the following characteristics:
- An identified pain point
- An interest in solving this pain point
- Being the right qualified fit for your brand to solve this pain point
Understanding these will help you learn how much follow-up and persistency you should use throughout each level of the funnel. Having set clearly-defined exit criteria for each stage, it’s critical to determine what stage the prospect is in within the buying process, nearing the milestone when your strong prospect reaches conversion, ready to make that purchase.