Sales professionals frequently use the terms "lead" and "prospect" interchangeably, creating confusion about their actual distinctions. While they share similarities, their meanings can vary depending on the context.
To address this confusion and aid in your sales efforts, we prepared a guide that clarifies the disparities between a lead vs. prospect. Furthermore, we’ll walk through techniques to help you effectively convert these potential customers and clients into opportunities, culminating in successful sales. Let’s get started!
A lead is a general term that refers to a potential customer or organization that shows some level of interest or engagement with your business.
You'll typically find leads at the very top, or the initial stage of your sales funnel, meaning they’ll need further qualification and nurturing to determine their potential as a paying customer.
There are several types of leads, categorized based on various factors. Note that the types of leads can vary based on your specific industry, business, and sales process. People you may consider leads are those who:
The leads at the very top of the funnel are typically referred to as Marketing Qualified Leads (MQLs), which are leads your marketing team has identified as showing interest in your offerings through marketing efforts.
Unlike a lead, a prospect has undergone some level of evaluation or qualification to determine if they meet certain criteria that make them a good fit for the products or services you offer.
This qualification may involve factors such as budget, need, authority, and timeline (commonly known as BANT criteria). Prospects are typically further along in the sales pipeline and considered more likely to convert into customers.
Prospects are essentially leads that have been qualified in some capacity and shown interest in your offerings but haven’t yet reached the stage of being fully ready for a sale. Here are some examples of what a prospect may look like:
A sales opportunity is a thoroughly qualified lead or prospect that your sales team identified as a genuine possibility of closing a sale. Some organizations will refer to these leads and prospects as Sales Accepted Leads (SALs).
Their progression to the bottom of the sales pipeline indicates their potential to become a paying customer is high.
Your sales team must proactively engage in nurturing and closing the sales opportunity, with the ultimate goal of successfully converting it into a sale.
Opportunities are highly qualified people interested in your offering and are ready to move forward with the sales process. Here are some examples of sales opportunities:
Converting a lead into a prospect involves nurturing and engaging with the lead to further qualify them and increase their likelihood of becoming a paying customer. Here are some effective ways to convert a lead into a prospect.
Since prospects are leads that underwent a qualification process, the first step is to evaluate your leads to determine whether or not they’d be suitable for your offerings.
To qualify a lead, you’ll need to reference your ideal customer profile (ICP) which is essentially a detailed description of the characteristics and attributes that define the most suitable and desirable customers for your business.
With your ICP in place, you can then build various buyer personas which are fictional representations of your ideal customer based on research and data about your target audience.
From there, you should gather leads that fit into your buyer personas. Once you establish a fit, follow these simple steps to begin qualifying them:
You can typically gather this information through online forms, quizzes, or downloads that require an email address. Some lead generation tools can even give you insights into data that reveals this type of information, helping streamline the process.
You may even be able to secure a discovery call with a lead which will give your sales team the ability to ask these qualifying questions during their meeting.
If you discover your lead is qualified, begin the lead nurturing process to help them move down the sales funnel. Lead nurturing is a process that aims to build a relationship with potential customers and guide them through the buyer's journey, ultimately converting them into prospects or qualified sales opportunities.
Here are some key steps to effectively nurture leads and turn them into prospects:
Consistently following up with a lead is crucial to staying top of mind. Use a combination of email, phone calls, and social media interactions to maintain communication and provide updates on relevant offerings, promotions, or testimonials.
Persistence and responsiveness demonstrate your commitment and can help move the lead closer to becoming a prospect.
To turn prospects into sales opportunities and increase the likelihood of closing a sale, consider implementing the following strategies.
Prospect nurturing is essentially lead nurturing that focuses on strategies better suited for those that are further in their buyer's journey. This is where you should begin developing a deeper understanding of your prospect and build a personal connection with them.
Here are some essential nurturing techniques to help your prospects turn into sales opportunities:
Focus on building a relationship with the prospect based on trust, understanding, and open communication. Take the time to understand their unique needs, challenges, and goals. This allows you to tailor your approach and demonstrate your genuine care about their success.
Here are some quick tips to help build a better relationship with your prospects:
The majority of prospects in your sales pipeline are likely categorized as "not yet ready to buy." However, it's important to maintain patience in this situation.
By committing to the nurturing process and consistently building relationships with your prospects, you will increase the chances of them becoming future customers. What's even better is that these customers will likely remain loyal to your company in the long run, as you have invested significant effort in understanding their needs.
While it's crucial to focus on closing deals in the present, it's equally important not to overlook the potential deals that will arise in the future—whether that be tomorrow, next month, or even next year.
Clearly understanding the distinction between a lead vs. prospect empowers you to use targeted techniques that can progress them towards a sale.
With Smith.ai, businesses can leverage the expertise of our agents who specialize in inbound call answering as well as outreach campaigns. Our 24/7 live agents will qualify and nurture your leads for you, ensuring a streamlined and efficient process that ultimately results in more opportunities and increased sales.
If you want to learn more about how Smith.ai can help your business, book a free consultation.