What's the Difference Between a Prospect and a Lead?

The difference is bigger than you think.
What's the Difference Between a Prospect and a Lead? cover photo
Many people are unsure about the difference between a lead and a prospect.

Leads and prospects are two different terms for describing the status of a potential customer relationship.

By the end of this article, you'll know the difference between the two and how it affects your sales strategy.

What Is a Lead?

In sales, a lead is a person or company that has shown some level of interest in a product or service.

They are typically at the initial stage of the sales cycle and have provided their contact information through various channels, such as filling out a form on a website or subscribing to a company's newsletter.

Leads are considered top-of-the-funnel, unqualified contacts, meaning that they may not necessarily fit the ideal buyer persona, and further engagement is needed to determine if they are a potential customer.

The goal of lead generation is to identify and capture the interest of potential customers, and then nurture and qualify them as prospects for the sales team to pursue.

Leads Come From:

1. Names on a list: Either one you compiled yourself or one you obtained from a third party.

2. Referrals: Either from coworkers or current customers.

3. Responses: If someone replies to your cold emails or phone calls, they are still considered a lead until you further qualify them.

4. Inbound/Advertising: In the realm of sales, this is a fantastic position to be.

You must connect with them before you know if they are still a lead. Sales reps should chat with leads to see whether they're disinterested or interested in being a buyer.

What Is a Prospect?

A prospect refers to a potential customer who fits the ideal customer profile and shows interest in your products or services. Prospects are crucial to the success of your business as they are the foundation of your sales pipeline.

Once you have identified a prospect, it's important to understand where they are in the buying process. Are they just beginning to research solutions to their problems, or are they further down the funnel and actively evaluating different vendors? Understanding where your prospect is in the buying process will help you adjust your communication and outreach efforts to their specific needs and interests.

Before a prospect is ready to schedule a demo call or make a purchase, they need more information about your product or service.

This is where nurturing comes in.

Nurturing involves providing prospects with relevant and valuable content regularly to keep them engaged and informed about your product or service, which could include blog articles, case studies, product videos, and more.

By providing prospects with helpful information and building a relationship with them, you can increase their interest in your product or service and move them closer to converting them into customers.

Turning a Lead Into a Prospect

To convert a lead into a prospect, walk them through the sales qualification process to see if your company's products or services are the best fit for their needs.
Prospect Qualifying is Divided Into Three Stages:
Make sure the lead meets the main characteristics of your buyer persona. Consider criteria such as the company's size, industry, and demographic region (if selling B2B).
Determine whether the prospect can execute your company's offering and whether they would profit from employing your product at this stage of the qualification process.
Once you've concluded that the lead fits your ideal customer persona, ask if they have the authority to make a final purchase decision. If not, you need to find the right stakeholder with whom to continue the sales process.

The following graphic can help you differentiate between a lead and a prospect:
Differences between leads and prospects infographic


The most significant distinction between prospects and leads is their level of engagement. Leads are at the top of the funnel, prospects are already in it.

Now you know how leads and prospects are different, you can use this knowledge to close more deals!
Post by Lucy Zorrilla.
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