In marketing, the terms “lead,” “prospect,” and “opportunity” are often used interchangeably. However, they shouldn’t be as they have different meanings and hold different values in the sales funnel.
The terms complement each other and need clarification to help you find leads, identify prospects, and close sales opportunities.
In this blog guide, we will discuss the definitions of each of these terms in a pretty simple way so that you can easily distinguish Leads vs Prospects. Then, we will discuss how you can convert your leads and prospects to sales opportunities to boost your business growth. So, without further ado, let’s start with the definitions.
What Is a Lead?
In very simple terms, a lead refers to any individual or business who can buy something from your company. It is a broad term, as this person is not qualified, but might eventually become a customer. That is why leads are at the very top of the sales funnel (the entry point).
For example, the person might have downloaded an eBook or research paper because they were contacted by a sales rep through a cold call, or commented on your social media post. There are many ways to generate leads, such as offering content or freebies in exchange for contact details, pursuing potential business profiles on LinkedIn, or running social media ads.
So, leads are mostly unqualified and might buy something from you. The chances of a large segment of your tips not fitting your ideal customer profile are also high. Hence identifying “prospects” is essential. Let’s move to the definition of a prospect.
What Is a Prospect?
A lead that has been qualified is a prospect. As simple as that. Prospects are placed further down the sales funnel, regardless of whether they have shown interest in your products/services. A prospect (a qualified lead) fits your ideal customer profile, has the money to make a purchase, and can make buying decisions.
For example, let’s say that your ideal client profile looks like – a B2B SaaS company with a customer support team of at least 15 members. So, the best way to qualify your lead to a prospect is by researching or directly talking to them. If you have the contact information of the customer support manager, you can send an email or arrange a call to qualify them.
Doing so can help you assess whether they might be a match for your products/services or not. By moving the lead to the “prospect” category, you transfer them to the sales process, where the real deal begins. Let’s check out the definition of the opportunity.
What Is an Opportunity?
According to the Merriam-Webster dictionary, an opportunity is “a good chance for advancement or progress.” Well, the definition sits perfectly when used in sales. In simple sales, an opportunity is a prospect genuinely interested in your products and services.
For example, let’s say that a person fits your ideal customer profile and is a prospect. There are chances that they are getting a better deal from your competitor, or they might not be able to afford your product or don’t need it right now. So, such a prospect is not a sales opportunity.
So, a sales opportunity is a qualified lead (prospect) with a high chance of becoming a customer. If the prospect has shown interest or inquired about your products or services through appointments or email responses, they are more likely to buy something. These are the potential customers that your business should be paying attention to.
Lead vs. Prospects
A set of leads is the key feature in the process of converting the general audience to customers. After processing, these leads will become prospective clients who might become your clients in the later stages of the sales funnel. To make it more clear, here is a table to differentiate between the key terms leads and prospects.
|A lead is somebody who is in the beginning stages of your marketing funnel.||Prospects are a step ahead of leads in the sales cycle.|
|Leads are the audience members you think may need your product.||Prospects are the leads with whom you have made an initial conversation|
|Example: Social media likes, followers, an email list, and blog viewers.||Example: Email responses, Product inquiries, Clicks, and conversations through any other medium.|
How to Turn a Lead into a Prospect
Not all your leads are prospects. The leads-to-prospects conversion process requires a few filtration and segregation processes. Though you can try converting your leads to prospects, it is better for you to subject your leads to some tests. This process can save you from wasting much of your time on less likely convert leads. Here are some of the key factors to analyze before starting with your conversion process.
Ideal Customer Profile:
Being a service provider or product seller, you may create a more suitable customer profile for your business. If any of your leads’ profiles are aligned with the service you offer, there is a chance for you to make them your customers.
Your target customers, or businesses, might benefit from your service, but it doesn’t mean they can become your customers right away. They must also have the desire to strike a business purchase with you.
With further analysis of their profiles, you can analyze if they have the potential to make the purchase at this time. They may lack the deciding authority budget to become your customers.
Steps To Convert a Lead Into a Prospect
Well, now that the leads vs prospects confusion are cleared out, let’s see how businesses can qualify leads to turn them into prospects.
1. Create an Ideal Customer Profile (ICP)
The ideal customer profile should be similar to your current customers. Based on industry, location, age, and budget, you can create the ICP. Once this is done, you can have a look at your leads and compare them with the ICP to qualify their leads. To make ICP effective, you can interview some existing customers to learn more about them. This is one of the most crucial stages for the success of your sales funnel.
2. Learn About Your Leads
Lead qualification or prospecting is all about data. As we mentioned, you can directly talk to your leads to learn more about them, what is their budget, company size, needs, and so on. When you compare the responses with your ICP, you will understand if the lead can be marked as a prospect or not. To get this information, you can also create surveys and forms. Use these on your website and social media pages to gate content (such as ebooks, whitepapers, etc.). Visitors may provide this information and their email addresses to get free content. Also, specific tools can help you qualify leads based on emails’ click-through and open rates.
3. Nurture Your Leads
Lead nurturing is about building a relationship with your potential customer. It means that you interact or engage with the leads through your quality content and offers. If they start liking it, they will qualify as prospects by reaching out to your sales team with purchase-related or service-related queries. You must create good top-of-the-funnel content, such as social media posts, blog posts, infographics, podcasts, explainer YouTube videos, and email newsletters. The more content your leads consume, the more likely they are to convert to prospects.
How to Turn a Prospect into a Sales Opportunity
Now that you have identified your prospects, it is time to understand whether they are interested in your products or services right now, or if they might consider you at a later stage. Let’s check out some tips to help you turn your prospect into a sales opportunity.
1. Interact with Your Prospects
Now, you have the data that says your prospect matches your ideal customer profile. So, the next stage is sending them an email, or scheduling a call/appointment. Talk about their daily challenges and pain points. Let them know how your brand’s products and services can help them. You won’t be sending your prospects the same emails you send to your leads. Treat the prospects in a more personalized way to show that you value them individually.
2. Prospect Nurturing
Like lead nurturing, prospect nurturing is also about building relationships, but valuable and deeper ones this time. You must deliver relevant middle-of-the-funnel content, such as surveys, case studies, webinars, video tutorials, and email sequences. This content will educate the prospects about their pain points and how your offer can be a perfect fit (solution) to their problems.
3. Be Patient
Many of the prospects in your sales funnel may “not ready right now to make a purchase.” This is alright. You need to be patient instead of more frequently pursuing them. Just commit to the nurturing phase and try to build relationships with them with the quality of your content and conversations. This can lay down the base, and many of these prospects may buy from you later. So, don’t press harder to close deals quickly. This can make the prospects exit your sales funnel. Eventually, they will convert.
Frequently Asked Questions
What is lead generation?
Lead generation is the process of acquiring new leads and is the end goal of a lead generation funnel. While some may consider lead generation the first step to success, it is also the most crucial. While you can have a huge number of leads or prospects, the quality of your leads determines your revenue. Besides, your processes to convert valuable leads are easier with the right prospects or leads.
What is a lead?
A lead refers to a potential sales contact who might be a company, business, or individual interested in your business. Anyone who expresses an interest in the type of services or products you offer is considered a sales lead.
What is a prospect?
A lead that has been qualified is a prospect. Prospects are placed further down the sales funnel, regardless of whether they have shown interest in your products/services.
How do you get leads and prospects?
– Create landing pages
– Utilize content marketing
– Make use of various traffic sources
– Optimize social media profiles
– Answer questions on various forums
– Offer a valuable resource
– Ask for referrals from current customers
Well, this “leads vs prospects vs opportunities” discussion should clear up all of the previous confusion. We have discussed the differences, and now you can understand the importance (and position) of these terms in the sales funnel.
You need to work on nurturing the leads to convert them into prospects, then you can focus on prospect nurturing to push the sales opportunities down the funnel. This can bring more clarity to delivering relevant content to each category. Just make sure that you track the leads, prospects, and sales opportunities in your pipeline to understand where they stand in the pipeline.
This is time-consuming, and you need to strategize appropriately with dedicated resources. Using your sales reps to focus on sales opportunities is the best way. You can outsource the lead nurturing, appointment setting, and prospect nurturing process. If you need help with this, reach out to us to learn more about our services.
- Lead Generation vs Demand Generation
- Outbound Lead Generation Strategies – 10 Tips
- How to Generate Sales Leads without Cold Calling
Illustrations by Storyset