In sales, there are a lot of titles and labels that get thrown around. For example, the terms “prospect” and “lead” are often used interchangeably, even though they are not the same. So what’s the difference between a prospect and a lead, and does it matter? Take a look at what the difference is, as well as how those labels should affect your sales team.
What Is a Lead?
A lead is an unqualified contact. That means that they have expressed some interest and have looked into your product or service a bit, but there’s nothing to show they fit your ideal buyer persona or would even benefit from using the product.
A lead is a very broad term that covers anyone who has shown interest in your product or service. Leads include a mix of people who have, and don’t have, the authority, resources, or intent to purchase.
What Is a Prospect?
A prospect is a qualified lead. They have gone through a sales qualification process and show more potential than the wide range of leads that you have. A lead becomes a prospect before they convert and close.
Prospect vs. Lead and Why It Matters
What comes first, a lead or a prospect? Depending on your team and your history with sales, you might disagree with our definitions. Some people think to become a prospect, a customer only has to fit one of your buyer personas, and they don’t even have to express interest in your company.
But it doesn’t do any good to argue over a definition. What really matters is how these terms affect your sales team.
What Should Sales Focus on in the Lead Stage?
Leads can come in all shapes and sizes. The biggest job your sales team needs to focus on during the lead stage is qualifying your leads into prospects. Their job is to sift through the leads and discover those that can become a prospect. But how does a lead qualify as a prospect?
The sales qualification process can be broken down into three levels.
An organization-level qualification determines if the lead matches some or all of your buyer personas. This can include factors like demographic, location, industry, and even company size. Depending on your sales process and standards, some companies might look for a full or partial match.
At this stage, the goal is to determine if the lead can benefit from your product. While we’d all like to think that everyone needs our product or service, your company and what you sell isn’t a perfect fit for everyone. This qualification level focuses on finding out more about your lead and their needs.
The stakeholder qualification focuses on finding out if your point of contact has the authority to make a final decision about purchasing.
What Signals That a Lead Has Become a Prospect?
A lead has become a prospect when they meet your qualifications. It is up to you to determine the line in the sand that makes that change. For some companies, qualification from a lead to a prospect is short and sweet, while for others leads are heavily qualified and vetted before they become a prospect.
What Should Sales Focus on in the Prospect Stage?
Once you have the basic qualifications of a lead to turn it into a prospect, the goal is to move from the prospect stage to a sales opportunity.
The prospect stage is when the real fun of sales starts. It’s at this stage that you talk to and really get to know your prospect and their needs. The better your sales team understands their prospects, the better they can show just how your product or service fits their needs.
Continual conversations are a necessity for prospects. During the prospect stage, sales are focused on education so the prospect can have everything they need to make a decision about purchasing.
Given the time invested in a prospect, this can easily be one of the longest stages of the funnel.
Prospect vs. Customer: What Signals a Prospect Is Ready to Close?
The prospect stage can go on for a very long time, but when do you know that it’s time to finally move them down the funnel and help a prospect become a customer?
The exact time can be different for each company, but typically the biggest sign to move a prospect to a customer is a sales opportunity. A sales opportunity is the point at which a prospect finally agrees to try your solution. When they have all the information they need and are in the position to make a decision, it’s time to close and change a prospect into a customer.
Help Manage Your Leads and Prospects with Tiled
Tiled is a flexible platform that helps your sales team move seamlessly with your customers through all of the stages of sales. Our interactive platform creates a visual experience that helps you qualify leads into prospects and then nurture those prospects into sales opportunities.