Not all prospect contacts are the same: Among them, the role of leads and prospects within the sales funnel is quite different and thus deserves diverse attention. Here is what they both mean and how they differ.
La lead generation is what drives the growth of companies around the world.
Do you agree?
But let's be honest: lead generation is useless if it does not result in a potential customer and a conversion.
Every customer begins their journey as a complete stranger-it is only through a consistent sales process that you can move them along your funnel, taking him from a mere contact to a loyal buyer.
The recipients of your offer can then take on different roles depending on where in the sales channel they are: leads, qualified leads for marketing or for sales, prospects, etc., are just some of the terms that are often used to describe the different stages of the buying process.
And understanding the various steps is essential to implementing a successful strategy.
As you say, you are not very clear about the distinction between these terms?
Don't worry, in this article you will have a way to resolve your doubts: I will explain the difference between leads and prospects, what they mean and how to identify them.
What is a lead?
A lead is any person (or company) who has shown interest in one of your products or services.
How?
In various ways, but essentially what it does is to share with you its contact information, such as name, email address and in some cases phone number, in exchange usually for a lead magnet, that is, something of value that you offer for free (such as a free eBook or newsletter).
It therefore represents the most immediate contact within any marketing or sales strategy.
The main feature of the lead is that they are in the early stage of the sales cycle and consequently are not always ready to make a purchase: an additional step is needed to understand whether or not they can become potential customers.
The goal of lead generation is just that: to identify and capture the attention of potential customers, and then cultivate them and qualify them so as to progressively lead them to purchase.
From a communication perspective, leads are those you engage in one-way communication, such as contacts in your mailing list, the people who comment on your articles of the blog, followers who interact with you on social media (with likes, comments or shares) and so on.
Where do the leads come from?
Lead generation, especially in the B2B arena, can take place in two ways:
- incoming: users fill out an online form leaving contact information in exchange for valuable content; thus, they are already expressing an initial interest in you;
- outgoing: sales representatives contact potentially interested parties (via email or phone), who become leads when they in turn demonstrate some level of attention and involvement with what you propose to them (in this case, they are not qualified contacts, but they become so as you nurture the relationship).
Therefore, if we consider the first case, i.e., that of a inbound marketing strategy, leads can be collected through various digital channels.
We have already mentioned some of them, but let us summarize the most common sources here:
#1 Website: users can fill out contact forms, sign up for newsletters or download resources by providing their personal information;
#2 Social media: interacting through posts, ads, and shares, interested people can become leads by clicking on a call to action;
#3 Content marketing: also necessarily linked to the first two cases just mentioned, content marketing involves creating and sharing valuable content to attract and engage a target audience; eBooks, pdf, free webinars and other content can be used to attract the attention of potential leads and get their e-mail address;
#4 E-mail marketing: can take various forms, including newsletters, promotional campaigns, product announcements and personalized content; it is definitely one of the most direct and effective forms of communication;
#5 Referral Marketing: word of mouth and referrals from existing customers, partners or affiliates can be a valuable source of leads; in fact, satisfied customers can recommend a product or service to others;
#6 Advertisement: the paid advertising, both online and offline, includes display ads, search engine advertising, social media ads, and other paid promotional activities.
#7 Partnership: collaboration with other companies or professionals in your field, through cross-promotions or joint venture, can lead to shared contacts and expose your business to a wider audience.
The effectiveness of lead generation from each source can vary by industry, target audience and the specific tactics you decide to employ.The success of your strategy often involves a combination of these methods, tailored to your goals and your ability to understand the market.
What is a prospect?
It may happen, in some contentions, that the terms "lead" and "prospect" are used interchangeably-so the word "lead" means both leads proper and prospects (or potential customers).
The term prospect, in the context of sales and marketing, however, refers to a potential customer who has made further progress in the sales process than a general lead.
It is therefore a more qualified lead, one that has moved further down the sales funnel and shown a higher level of interest, with a higher chance of converting into a paying customer.
The transition from lead to prospect typically involves additional steps to qualify and assess the lead's suitability as a customer.
Typically, a lead becomes a prospect the moment he or she interacts more actively with you and is identified as matching your ideal customer profile.
So it can be a person you talked to on the phone, someone who responded to one of your emails, a user on social media who asked about your product or service.
Characteristics of prospects
Key characteristics of a prospect include:
#1 Interest: a prospect shows more specific and meaningful interest in a product or service than a general lead, such as through actions such as requesting more information, engaging in product demos, or actively participating in communications.
#2 Qualification criteria: prospects often meet certain criteria that make them more likely to become customers. These criteria may include factors such as budget, authority to make a purchase decision, a real need for the product or service, and the right timing.
#3 Involvement: prospects are generally more engaged with the company and its offerings. They may have participated in discussions, attended webinars, or interacted with content that indicates a deeper level of interest.
#4 Nurturing and Communication: the relationship you establish with your prospects is more constant and ongoing; this can involve personalized interactions, targeted content, and efforts to answer specific questions or concerns the prospect might have.
#5 Advancement in the sales funnel: We've said it before, a prospect is further along in the sales funnel than a lead. He may have moved from the awareness stage to the consideration stage and is actively considering whether the product or service meets his needs.
What is the purpose of identifying prospects?
Once a potential customer has been identified, it is important to understand where they are in the sales process.
Have you just started looking for solutions to their problems or are you further down the channelization and actively evaluating different providers?
In fact, understanding where your potential customer is in the buying process will help you tailor your communication and outreach efforts to their specific needs and interests.
This is where the nurturing.
Nurturing involves regularly providing potential customers with relevant and valuable content to keep them engaged and informed about your product or service, which could include blog articles, case studies, product videos, and more.
By providing potential customers with useful information and building a relationship with them, you can increase their interest in your product or service and move them closer to converting into customers.
Lead and prospect: what is the difference?
Okay, so to summarize: a lead is a potential customer who has expressed interest in a product or service but with whom you have not yet established a relationship, while a prospect is a lead that has been further qualified and is more likely to convert into a sales opportunity.
Distinguishing them is important, because your approach to moving them along the sales funnel will be different: you will need two separate, targeted strategies for each group, tailored to generate a conversion.
The way you approach both is necessarily different: communicating with leads means generating awareness and interest in your offering; communicating with prospects means turning interest into a relationship and moving that relationship into the sales channel.
Conclusion
Understanding where each ideal customer fits in the sales funnel is critical to success-it will determine which marketing and sales approaches to use and when. That is why it is so important to understand the difference between a lead and a prospect.
By aligning your strategies to the specific needs and interests of potential customers, you can optimize your approach to sales and achieve greater business growth.
This knowledge helps you effectively cultivate and convert leads into valuable buyers, ultimately increasing your success rate in closing more deals.
And you, do you make that distinction yet?
Let me know in the comments!