Sales and marketing have come a long way since the conception of the marketing funnel in the 1920s. It’s easy to get confused with all the terminology thrown around as sales teams strategize their next campaigns. If you’ve ever asked yourself, “What is a prospect?” and wondered about the differences between prospects, leads, and opportunities, you’re probably not alone.
In this article, we’ll shed some light on the definition of a prospect and the key differences between prospects, leads, and opportunities. We’ve also included some tips on how to find good prospects. Furthermore, we’ll tell you how CRM software solutions can help organize your sales funnel and turn these prospects into sales-generating opportunities.
Sales is a difficult beast to master, no thanks to factors like stiff market competition and the demand for high sales productivity. Even as they hit quotas and meet monthly or quarterly targets, sales teams always bear the burden of being expected to improve their metrics.
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Most salespeople consider prospecting the biggest challenge of the sales process. Technology makes the task easier, as social media and other digital channels provide new techniques for prospecting and lead generation. Lead generation software even automates lead scoring and nurturing to help salespeople save time and effort.
However, it never hurts to brush up on the basics, such as the definition of a prospect, lead, and opportunity and the difference between these three concepts. Getting the basics right may help you make better sense of your sales funnel so you can optimize it for success.
A prospect in business is an individual or organization that presents the potential of becoming a customer. A prospect is in the simplest terms: a potential buyer. In most cases, these people have usually shown interest in your product, and they have the qualities you’re looking for in an ideal customer. The fact that they match your ideal buyer persona is a critical factor in identifying prospects.
The prospect definition may vary from one business to another. Some sales teams may define a prospect as a contact who can be classified as a company’s ideal customer. Others use the term ‘prospect’ to identify leads who are ready to make a purchase. The different interpretations of the concept may be the reason why many salespeople find the terms ‘prospect’, ‘lead,’ and ‘opportunity’ interchangeable and sometimes confusing.
The concept of a prospect vs. lead can be confusing, but there are key differences between the two. For instance, a lead is simply a contact or an individual that has given you his or her contact information, while salespeople usually have more information on prospects. Your marketing team may have gathered these leads through data capture forms on your website, webinars, or gated content.
Leads typically undergo qualification before they move further into the sales process. This qualification process is another major factor that differentiates leads from prospects. Lead qualification allows you to determine if a lead meets the buyer criteria you’ve set for your business. The process usually involves communicating with the lead to learn more about his needs and find out if your product can meet these needs.
Lastly, prospects and leads are in different stages of the buying cycle. While unqualified, leads are at the beginning of the cycle, prospects are a step further along. Advanced features in lead management software automatically organize this process so you can make better sense of your sales pipeline.
If a prospect is one step further along in the buying cycle compared to leads, opportunities are even closer to making an actual purchase and becoming a customer of your business. A sales opportunity is defined as a qualified prospect who presents a high likelihood of making that final step and becoming a customer. They may be open to hearing your sales pitch, and they’re at that stage where they’ll say yes or no to your offer.
Although buyer willingness plays a huge role in the successful conversion of these opportunities, which also gives sales agents the highest chance of closing the deal. They account for the highest ROI for sales reps.
Still confused about the differences between leads, prospects, and opportunities? An easy way to differentiate these three personas is to think of them in terms of the sales funnel.
Since leads are at the beginning of the buying process, they’re usually at the top of the sales funnel. They’re aware of your company, and you’ve caught their attention, but they know little of what you have to offer.
After you’ve contacted these leads and put them through the lead qualification process, leads can become prospects. Prospects usually sit in the middle of the sales funnel or lower. At this point, you’ve probably talked to the prospect about how your product can address their organization’s pain points.
Opportunities should be placed at the bottom of the sales funnel. At this stage, they’re close to deciding on whether to purchase your product or not. If you continue providing value past the final stage of the buying process, these opportunities can turn into regular customers for your business. They may even provide referrals, which have been proven to be profitable for companies.
Not all leads will make for good prospects. Sales teams generally use these criteria for qualifying prospects:
Before a person or organization can be identified as a good prospect, you must first determine his needs. The best way to find out what these needs are is to ask about them, but it certainly wouldn’t hurt to do some research on your own. The lead must have needs that your product can fill.
A good prospect also has the budget to invest in your product or service. Valuable information sales reps should aim to get from the prospect include their current spending on the needs mentioned, their previous purchasing decisions, and the ROI the prospect is aiming for.
Lastly, the ideal prospect should have some authority in his organization. He should have a say when it comes to purchasing decisions. This way, you can find out if you’re talking to the right person or if you need to redirect your sales efforts to someone else in the organization.
In some cases, other criteria may be needed to qualify prospects. You may also need to consider timing or the timeline by which the prospect’s needs must be met. The timing may give you more insights on how to better approach the sales process.
Keep in mind, though, that these criteria – commonly called the BANT methodology – aren’t set in stone. You can modify them according to your business’ requirements or even set additional points by which you’ll identify good prospects.
Understandably, the process of finding prospects starts with looking for quality leads. The easiest way to gather quality leads that are more likely to turn into prospects is to go prospecting. This means actively searching for new customers to buy your products and grow your business with lead generation.
Offline lead generation avenues such as event marketing, networking, and outbound calls have stood the test of time. These strategies still prove to be effective in helping businesses reach potential customers.
Digital channels such as email, SMS, or even social media can also be used to initiate contact with potential buyers or leads who have ‘gone cold.’ Advanced CRM tools can usually automate this process to make it easier for sales agents. This way, you’ll have a steady stream of leads and potential prospects that can be converted into successful sales.
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Thanks to technology, you’ll never have to wonder how to find prospects and potential customers for your business. If your sales pipeline is looking a little thin lately, try looking for leads and prospects in these places.
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Sales teams today have a variety of prospecting tools at their disposal. Many of these tools automate the lead generation process and help organize leads for better management and accurate analytics.
You can easily sign up for HubSpot CRM free app here and get to know the features firsthand at no cost and without commitment.
As we’ve said earlier, most salespeople find prospecting to be a challenge. Having these tricks up your sleeve may make it easier for you to reach out to more leads for your sales pipeline.
Of course, it’s not enough for your business to capture leads and qualify them into prospects. You also have to nurture leads, which involves building relationships with prospective customers to encourage them to move further into the sales funnel. Lead nurturing will help ensure that your brand is top-of-mind when the time comes for the potential customer to make a purchasing decision.
Here are some quick tips on turning prospects into customers:
Sales management software can automate the nurturing process for leads and prospects. With this software in place, sales teams can focus on adding more leads to the sales pipeline.
Hopefully, we’ve shed some light on the prospect meaning as well as its differences from leads and opportunities. By grasping the basics of these concepts, you can gain a better understanding of your business’ sales funnel and optimize it for maximum effectiveness.
Another way to improve your teams’ sales strategies is to adopt a CRM system. CRM can enhance sales techniques, boost lead generation, automate lead nurturing and prospecting, and organize your sales process from start to finish. You can sign up for HubSpot CRM free app here.
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