Suspects, prospects, leads, traffic…
All these terms tend to get confusing.
And we’re all guilty of using different terminology to describe potential customers as they move through the B2B sales funnel.
But what do they all mean? What is a prospect? And what’s the difference between a lead and a prospect?
Understanding these sales terms are essential for a successful sales strategy so that we can establish how far each buyer is in the sales process.
If you want to start creating more marketing and sales opportunities then this article is a must-read!
We’re going to do a deep dive into the difference between a lead and a prospect. Let’s get started 👇
What is a sales lead?
What came first, the chicken or the egg?
One can ask the same question when it comes to leads vs prospects…
So what comes first, a lead or a prospect?
The answer is a B2B sales lead.
A lead is someone who is interested in a product or service you're selling. Leads are the most basic type of contact for any sales or marketing person. As soon as a potential prospect shows an interest in your company, they become a sales lead.
B2B lead generation can happen in two ways:
1. Inbound
This is the first method. It works like this:
Potential customers will complete your web form or sign up for your newsletter, leaving their contact information.
These leads can be considered hot leads, as they’ve shown interest in your product and are keen to learn more.
2. Outbound
The second method is through outbound lead generation. It works like this:
Sales reps use email lists to contact potentially interested parties. Contacts become leads as they express their interest and confirm their contact details.
At this stage, your leads will be unqualified. But they remain leads as you find out more about them.
How do you turn a lead into a qualified prospect?
Through engagement. This is normally via automated email campaigns where marketing content is used to create interest and encourage targeted leads to enter the sales funnel.
The main objective is to focus on learning more about sales qualified leads, measuring their level of interest and helping to develop a long-term relationship.
However, email marketing campaigns don't necessarily create dialogue, so you'll need to include a call to action in order for a lead to qualify as a prospect.
What is a prospect?
The definition of a prospect is a lead who has been qualified by a sales team to match a company's ideal customer profile.
But, it's not quite that simple. There are two types of prospects: marketing prospects and sales prospects.
Marketing prospects
Marketing prospects are those contacts who might become leads – in other words, ‘prospective’ leads.
An example is an email list.
Before any action has been taken, all contacts are prospective leads. They will become a sales-ready lead when they have confirmed their interest.
Sales prospects
Sales prospects are different things.
If B2B marketing prospects are at the very top of the channel, sales prospects are at the penultimate level.
Leads become sales prospects when they are ready to engage in two-way communication with a named individual.
At this stage, they are likely to have demonstrated their intention to buy your product or service and be ready to discuss details.
Calls to action for sales prospects will focus on continuing the conversation until a deal is reached.
Leads vs prospects: key differences explained
Understanding where eachideal customer fits into the B2B sales funnel is crucial for success. It will determine which marketing and sales approaches to use, and when. This is why it’s so important to understand the difference between a lead and a prospect.
The distinction between a prospect lead and a sales lead is essential for tailored B2B lead generation and outbound communications, as you'll need two separate sales strategies for each group.
What’s more, knowing how to guide your prospective customers from leads to marketing prospects to happy customers will mean the difference between failure and success.
In summary, the key difference between a lead and a prospect are:
A business prospect is a warm lead that's been qualified by your sales team and has a high chance of converting into a sales opportunity, while a prospect lead will always be unqualified as no relationship has been established with them.
If you'd like to learn more on this topic, check out our guide to Prospecting vs Lead Generation. It explains how both approaches positively impact incoming revenue with actionable examples.
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