The sales development buzzwords like “lead,” “prospect,” and “opportunity” are often used interchangeably. However, understanding the differences between these terms is essential for effective communication between departments and knowing where potential customers are in the sales pipeline.
In this blog, we’ll highlight the following topics:
What Is a Lead?
A lead is an individual who’s shown interest in your company but hasn’t been qualified. Leads can be a part of either the outbound or inbound sales pipeline, but the way they enter the sales funnel is different.
When it comes to the outbound sales pipeline, leads are generated after the prospecting stage. If a prospect expresses interest in your company’s product or service offerings, they’re converted into a sales qualified lead (SQL) because they are more likely to become an opportunity than an unqualified prospect.
However, when people think of leads, they often think of inbound leads generated through digital marketing efforts. A marketing qualified lead (MQL) is someone who has expressed interest in what your company has to provide but hasn’t been qualified by your sales team. An MQL can enter the pipeline by downloading a piece of exclusive content from your website, signing up for a company newsletter, or submitting a digital contact form.
What Is a Prospect?
A prospect is a contact found by sales and marketing teams that they identify as a good potential customer because they meet your company’s ideal customer profile (ICP). The core difference between a lead and a prospect is that a prospect is typically only associated with the outbound sales development approach; however, a lead can be associated with both outbound and inbound lead generation.
Ways To Get Prospects for Your Sales Pipeline
Sales prospecting looks different for every business development team depending on the time, money, and available resources. Here are some different ways that sales teams can get prospects for their sales pipelines:
Buying Prospect Lists
Many companies choose to buy prospect lists from third-party vendors. While this is a good way to start your outbound appointment setting efforts, sales development representatives (SDRs) must take action to verify decision-makers, so they have the best point of contact. After a list is purchased, SDRs must send emails or make phone calls to prospects on the list. If the person they email is not the best point of contact for your company’s product or service, the decision-maker given can respond and steer them in the right direction.
Using LinkedIn to Find Decision-Makers
LinkedIn is a great platform for connecting with like-minded professionals in your industry. However, it’s also a crucial tool for finding prospects for your outbound sales pipeline. LinkedIn has a platform extension known as LinkedIn Sales Navigator that’s designed to find decision-makers and prospective businesses that meet your ideal customer profile, such as:
- Their industry served
- Company size
- Decision-maker job title
- And more
Asking Clients for Referrals
With all the different ways to find prospects these days, word-of-mouth remains one of the most effective ways to get prospects integrated into your sales pipeline. When you ask clients for referrals, you already have access to the decision maker‘s name and the company’s information, cutting down the time it takes for sales reps to find and verify their qualifications. Additionally, it allows your sales team to name-drop the referral, so the prospect can already have a mutual connection and testimonial with your business.
Attending Trade Shows
Networking at trade shows is a great way to get in front of businesses in your network and explore what they’re looking for in a potential product or service provider. At trade shows, you can speak one-on-one with decision-makers to spend more time relationship building than verifying contact information. After the exchange, sales execs can implement their information into the sales pipeline and follow up in the future to provide them with value.
How To Convert a Lead Into a Prospect
To convert a lead into a prospect, it’s vital that SDRs follow the lead qualification process your company has in place. Here are a few lead qualification strategies SDR teams can use to convert a lead into a qualified prospect:
- BANT
- CHAMP
- MEDDIC
- ANUM
- FAINT
What Is a Sales Opportunity?
A sales opportunity is a qualified prospect close to the end of their buying cycle and is likely to invest in your company’s product or service. Ideally, every sales lead and prospect should eventually become a sales opportunity. However, sometimes this requires a lot of time, patience, and following up until they’re ready to make a purchase. When a qualified prospect is prepared to take the next steps in the sales process, they’ll schedule a time to meet with a sales or account exec to explore how your company could benefit their everyday operations.
Characteristics of Sales Opportunities
For a decision-maker and a prospective business to convert from a lead or a prospect to a sales opportunity, they must do (or have) the following:
Pain Points
Without pain points, there would be no reason for a potential customer to consider speaking with your business; it would be a waste of time for both them and your execs. Every sales opportunity you get should have a pain point. Pain points differ for everyone depending on the business’s industry and individual needs.
For example, a pain point for an HVAC lead or prospect may be slow response times, poor air quality, constant repairs, etc. Sales reps can identify these pain points by asking what issues they face with their current HVAC service provider. Once an SDR understands their pain points, they can use these weaknesses to highlight your company and how they’ve helped customers in similar scenarios.
Express Interest in Your Company
A sales opportunity should actively express interest in what your company has to offer and be open to making adjustments to their current product or service solution. While they may be aware of their pain points, they may not be in a position to fix them, such as not having money or being stuck in a contract that’s tough to get out of. Sales opportunities should show interest in what you have to offer and be ready (or almost ready) to make a purchase and not pigeon-holed into a sales appointment they weren’t ready to attend.
Be a Good Fit for Your Business
Just because someone shows interest in your company’s product or service doesn’t mean they’re a good fit for your business. A qualified lead or prospect should be able to accept what your company has to offer.
For example, let’s say you’re a commercial cleaning company requiring at least 10,000 square feet of cleanable space with at least three days of routine cleaning. If a lead visits your website and submits a request for a proposal but has less than 10,000 square feet of cleanable space, they would not be a good fit for your business. While they have pain points and express interest in your company, they don’t have the sales qualifications to close business.
The Lead to Prospect to Customer Timeline
The lead-to-prospect-to-customer timeline changes based on the type of lead generation strategy your sales and marketing teams follow. This is because of how potential customers enter the sales funnel in the first place.
For example, if your lead generation experts follow an outbound appointment setting strategy, the steps from turning a prospect into an opportunity often look something like this:
- Find prospects that meet your ideal customer criteria
- Contact prospects and generate interest in your company (thus converting into leads)
- Provide value to get them to agree to a sales meeting (thus becoming an opportunity)
On the other hand, if your lead generation specialists follow an inbound digital marketing strategy, the timeline often looks something like this:
- Leads visit your website or social media and express interest in your company
- Sales reps follow up with leads via email or phone call to make sure they’re qualified (thus becoming a prospect)
- If qualified, sales reps further progress the conversation with the qualified prospect (converting them into a potential sales opportunity)
Key Takeaways
While the business development terms “lead,” “prospect,” and “opportunity” are often categorized under the same bucket, they have noticeable differences that should be reflected in your sales development and marketing efforts. Separating these buzzwords can help your lead generation experts communicate more effectively and send the right decision-makers the right assets at the right time.
The sales and marketing specialists at Abstrakt Marketing Group are well-equipped to find prospects, generate leads, and convert them into valuable sales opportunities. If you’re looking to maximize your business growth efforts with an outsourced lead generation partner, contact the experts at Abstrakt!
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