Lead, prospect, opportunity...these are all terms that you hear a lot, particularly in sales and marketing. All too often, people use them interchangeably and even if you do a quick Google search for definitions, you’ll likely be left with a muddy understanding at best. But here’s the thing — understanding the difference is essential to effectively moving each category to the next.
They’re all part of your trusty marketing funnel. Each represents a different stage of your potential customer’s journey. And each stage requires a nuanced approach to keep things moving. So how do you do that? First, let’s define each of these terms before looking at some of the strategies you can use to take things to the next level.
Leads Defined
Leads sit right at the top of the funnel. These are the people or businesses who could potentially become clients or customers. Marketers and sales pros need someone to talk to, and these are the right folks to approach. They aren’t a sure thing and may not even fit your ideal buyer persona or be someone who would benefit from your product or service. Leads often come from names on a list. That could be a list that you get from a third party or one you create while researching your buyer persona and target audience. Other forms leads often take include:
Names of people who respond to cold calls and emails
Referrals from friends, colleagues and clients
Inbound advertising coming from sources like content marketing, social media or SEO
Prospects Defined
Prospects are the next step through the funnel. Instead of one-way communication, you’re both engaged. These are leads and contacts that you've qualified, and they’re moved into the sales process. They pretty much fit into your target market, they've got the money to make a purchase and they have buying authority.
How do you turn a lead into a prospect? You’ve got to have a conversation. By walking that lead through the qualification process, which is designed to see if he or she is a good match for your products and/or services, you can determine whether it makes sense to continue the relationship and move through the funnel, or part ways. Qualification typically happens in three stages:
Organization-Level: This is the initial stage during which you verify that the lead's qualities, including their location, industry and other demographics, match the company's buyer persona.
Opportunity-level: During the next stage, you figure out if what you're offering would benefit the prospect.
Stakeholder-level: In the last stage of the process, you make sure that this is the person who can make buying decisions. Otherwise, you'll need him or her to connect you with the person who does have that authority.
Opportunity Defined
During this third initial stage, the prospect acknowledges that they're looking for a solution and/or considering your product or service. Opportunities are qualified prospects who are pretty likely to become a client or customer. They share several characteristics, including:
Pain Points: To truly be an opportunity, your prospects and leads should have a need that your company can meet. Without it, the likelihood of making a sale.
Interest: Is the prospect interested in solving their pain point? Talk to them about how long they've had the need and why they want to tackle whatever the issue is. If they've been struggling with it for years on end, that indicates minimal interest. Opportunities with more acute pain are likely to solve their needs first. That doesn't mean you should overlook anyone with lingering needs, but it's valuable information to consider.
Fit: How well does the prospect fit what you're offering? You might find a prospect that has the need and the interest, but their need and your product or service might not match up. The product and the prospect should be well aligned for successful sales and happy customers.
Tips for Moving Through the Funnel
Leads are the lifeblood of business. You always need fresh leads to keep things fresh and to keep new business rolling in. But you also need leads that will engage with you to become prospects and prospects that become opportunities. Because that’s when you get closer to closing the deal. Approach leads and prospects with care. There's a fine line between being persistent and being annoying. Strategic lead management can keep the funnel filled. Approaching prospects with the benefits and value you can offer, can help move things forward.
Don't forget to be patient. Even if your leads and prospects are dragging their feet, speak to their needs and maintain consistent communication to upgrade from one stage to another, ultimately achieving a sale and a loyal customer.