Prospect Vs Lead: The Differences

Whether you’re a B2B or a B2C company, lead generation is what drives your business to grow.

As your business grows, you would want a lot of people in the market to experience your offered product or service. However, no matter how good your product or service is, it will be completely pointless when no one recognizes it or is willing to pay for it.

Let’s be real. Without a good lead generation strategy, the doors for sales opportunities will simply not exist. But lead generation is not quite easy as you think.

Despite lead generation being the top priority among marketing experts, 61% of them still believe that lead generation is still their biggest challenge.

You have to understand that the process of lead generation is important, and this is something that you have to do excellently. To do this, you have to create a strategic plan in place.

But before doing this plan, you have to understand what you’re looking for.

Working in the world of marketing, you may come across the terms “prospect” and “lead.” Yet, for two staple terms in the marketing industry, some people find them surprisingly difficult to define.

These terms are widely used in connecting with customers, particularly in business relationships, interactions, and marketing engagements.

It may seem that these terms are the same, which is why a lot of sales teams use them interchangeably.

Before you’re able to create a sensible plan, let us give you a walkthrough of their differences and their importance.

Prospect vs Lead: What your sales team needs to know

Before someone drives into your sales funnel, you have to understand that leads and prospects are two different classifications of people. Thus, you need to know how to connect with them properly.

What is a lead?

A lead is someone in your sales funnel that has not been considered qualified. They may be someone you met at an event or sending them an email.

The people in this category are in the first phase of the sales funnel and are defined by one-way communication. These people are those your sales team has already reached out to but haven’t given any response. Leads are based on the information that could mean a possible sales opportunity.

The information you gather is mostly user-generated, further providing a contact method that allows further communication and potential.

In the words of Guido Bartolacci, “To me, a lead is someone whose contact information you have.” But he also said that that’s just about it. Therefore, you may have a lead’s information, but there is no assurance that they have plans on becoming a customer.

Types of Leads

Every company may define leads differently. There are several types of leads depending on how their information is gathered.

• People on your email marketing campaigns list
• New Linkedin connections
• People coming from your social media engagements (likes, comments, and shares)
• Website visitors (Blog posts, views/clicks on demo pages and conversion pages, etc.)
• Marketing qualified leads (MQLs) generated by the marketing team and sales team
• Referrals

What is a prospect?

Prospects are leads that have been qualified and assumed worthy of making sales connections.

Identifying prospects would also mean that there is a slight or indirect pointing towards connecting with a person with a genuine interest in purchasing the product or service that you offer.

However, many marketing experts define prospects in two ways. First, a prospect may be called as such when he or she fits the company’s buyer persona but may not have conveyed any interest. For others, prospects are sales-ready leads that have a strong desire to move on into the sales process.

When we talk about prospects, there is an evident two-way communication between you and a lead. In other words, a prospect can be sought out by your sales team either manually or through an automated system to define them as potential customers.

Types of Prospects

You can gather a lot of leads along the course of selling your products. Here are some examples of sales prospects that you may encounter.

• A lead you contacted through phone calls
• Someone who responded to your sent email
• A lead who clicked on your message and visited your website
• An individual who approached you at a trade show
• A stranger who inquired about your product or service through social media

Differentiating prospect vs lead: What a sales rep should know

Now that the difference between the two terms has been cleared out, as a sales rep or member of your company’s marketing department, you should know that approaching people from each category cannot be the same.

The key differences between a prospect and a lead can be narrowed down into two most straightforward distinctions.

First is their engagement. Leads are defined by one-way communication, while prospects are characterized by two-way communications.

For example, when companies try to engage with leads, they can use various forms of outreach methods in the hopes that the recipients get to reply. For sales, qualified leads generated through the first phase of the outreach may engage with the content. However, the response’s sustainability may still be insufficient to move further toward the sales funnel.

On the other hand, prospects can be identified as sales-ready leads. This happens when the lead engages back through exchanging dialogue with any person from the sales team or marketing team. This could take the form of exchanging messages, calls or setting up a meeting.

The second key difference is the methods used to communicate with them. The various ways leads and prospects are contacted as spearheaded by the marketing department.

In the case of the leads, for example, leads are typically reached through large groups through automated systems. Messages for leads usually come from general company emails, and most call to action focuses on gathering contact information and introducing other communication channels.

On the other hand, prospects are contacted one-on-one or in small groups. Associated sales reps are the ones who make a call and use a very personalized approach to understanding pain points and overall connecting with sales leads. The call to action for prospects focuses on keeping the communication sustained and open, such as scheduling calls, requesting quotes, booking demos, etc.

Understanding the key differences between these categories of people can help you make suitable adjustments to your strategies for them to move down your sales funnel.

They may come off as the same, but for many sales managers, conversions will only happen if tailor-fit strategies are practiced. Also, check out B2B sales, SaaS sales and tech sales.

How can you make leads move further in the sales funnel?

To convert leads into prospects, you can walk them through the sales qualification process to see whether your product or service fits their needs.

Stages of Qualifying Prospects

1. Organization-level

The initial stage of identifying qualified leads takes place within the organization. Make sure that the lead meets the characteristics of your company’s buyer persona. Some of the things you may consider are the company’s size, business type, and demographics.

Some of the questions you may ask to identify a qualified lead are the following:

• Where is the client located?
• How many employees do they have?
• Can the client sustain the funds to purchase your product or service?
• Do they need your product?

No matter how great your sales pitch is, if you can’t prove to them that your product or service is aligned with their needs, then your lead may be an unqualified contact.

2. Opportunity qualification

The next stage of qualifying leads is to assess the sales opportunity. This is where you get to analyze whether the client whom you’re selling your product can benefit from it once they enforce it.

Being honest and showing sympathy for your prospect’s business is deeply important for your potential customers. However, as not all contacts can show interest, so it is imperative that you come in prepared before meeting with a sales prospect.

To have higher chances of getting more deals, you must have an outline of everything that you need – the information you should gather and the information that you should give.

3. Stakeholder-level

Once you’re sure that you have a qualified lead for your company’s products, it is time to settle whether they have the authority to make the purchase.

Sure, a sales manager can see that your product is a fit for their business, but sometimes they are not in charge of the buying decision.

This is the case for bigger companies with various organizational level. This is why in the early stages of searching for potential clients, marketing teams have to identify the correct stakeholder and the decision-maker to lessen any delays in your sales cycle.

Sales process tips to turn leads into prospects

The lead qualification process is a crucial step to make sure that you have hit the right target market. But it is a fact that you still have a lot of convincing to do.

Even when you think you have a sales opportunity right before you, there is no assurance that you can quickly close the deal. Here are a few tips that can help you with your potential customers.

Give them a glimpse of their possible ROI

When a potential customer decides to listen to your spiel, you have to be ready with numbers. One of the common pain points that turns a lead into a prospect lies in the ability of a product to provide them a quick ROI.

Showing your potential prospects your sales data can help you be more convincing and make a potential customer a qualified prospect.

Propose an incentive

Giving away incentives may be the oldest trick in the book, but they still work. Whether you’re talking to a lead or a prospect, giving out incentives like discounts or gifts can increase your chances of making a sale.

Other sales reps even include time-limited offers which can be effective for a potential customer.

Most tech and software companies usually offer free trials or demos as their incentive. This way, their target market can have a glimpse of their provided solutions through experience and can help them determine whether the product indeed addresses their pain points.

Answer the frequently asked questions

When potential clients have expressed interest, chances are they would be asking many questions.

And to effectively turn a lead into a prospect, you must have all the possible questions at hand to provide them with sensible answers. Creating a help guide for your clients can be extremely helpful when a prospect decides.

With an effective outline of answered questions, you can alleviate the chances of leads not moving on to the prospect stage.

Plan your approach

Before getting into the sales process, it is crucial that your approach is clear from the get-go.

You have to have a plan and purpose so that you can make a meaningful offer to your qualified prospects.

Once you’ve analyzed your potential clients, you would be able to have a clear picture if you have a sales-ready lead or if your prospect is ready to make the purchase. Only you can determine when a qualified lead can be a viable prospect. Check out the related guide, sales prospecting and sales pipeline stages.

Use sales management tools

Modern times call for modern solutions.

Your product or service may be effective as you say it is and may be cheaper than others on the market, but if you’re unable to reach a broad target market, you won’t be able to gain more conversions.

There are various sales management tools that are available in the market right now.

These tools can help you save time and effort in generating more leads that can turn into qualified prospects, guiding them through your sales funnel and converting them into paying customers. Also, find the finest guide, sales-qualified lead.

Turning Leads and Prospects to Customers

Now that you have a clear understanding of what differentiates leads vs prospects, you must also have to upgrade your strategies for connecting with them.

The good news is that Sloovi is ready to help you!

Sloovi helps automate all the pain points you may have in acquiring leads and starting the sales process.

With Sloovi, you can generate more leads with in-house tools that make you connect with your potential customers but also give you real-time data analytics of your sales funnel.

Learn more about Sloovi and see your revenue grow faster!