Leads and prospects are two words that often get interchanged. Both terms are deeply ingrained in the marketing business. However, even marketing and sales professionals themselves tend to get these two mixed up. Some say leads are qualified prospects. Others say prospects are developed from leads. If we don’t share a common understanding of the two, can you imagine the riot and confusion we’ll always have during marketing meetings?
So which is which? How do you differentiate the two?
Well, for starters, let’s give a basic definition of these two terms first.
LEADS
The thing about leads is that this term covers a wide range of qualification standards and positions in the purchase cycle. For example, there are marketing qualified leads and sales qualified leads.
Marketing qualified leads are those who fit the criteria of an ideal buying customer but are not yet ready for a sales conversation. They can be found at the top of the funnel. They could’ve filled out a web form and gave you their details to get a free ebook or free trial of a service. Just about anyone can fill out such a form even if they do not have the authority, resources, or intent to purchase. They can be showing the qualities and behaviour of a buying customer by reading and downloading content from your website, but they may not be ready for a sales conversation just yet.
On the other end of the spectrum, sales qualified leads are those who are sales-ready. They are already having discussions with the company and just ready to purchase the product or service that your business has to offer.
If we go to the very basics of the word “lead,” it means a “guide to a path” or “a direction.” It can also be a piece of useful information from an expert wherein you get pointed to something (a solution or explanation) that could be right or wrong.
So, looking at this basic definition of the word, we can say that leads are information-based, and they may or may not be concrete and final. If we put this definition to a sales perspective, we can say that a lead is something that may or may not direct you to a sale. And if we compare this definition to the different examples of leads from either end of the spectrum, we can say that it holds up for both of them. Both marketing qualified leads and sales qualified leads may or may not end up in a sale.
Both of them have provided contact information, but marketing qualified leads are not yet ready for a sales conversation while sales qualified leads have demonstrated a greater degree of sales potential. In the end, a lead is someone who has provided contact information and presented you with a potential sales opportunity.
PROSPECTS
Same with leads, prospects tend to be classified in two ways. They can be contacts who fit the company’s buyer personas but have not expressed any intent to purchase yet, or they can be sales-ready leads who will be transferred on to the sales team already. Again, let’s go to the basic definition of this term to help us understand it more deeply.
Prospects are something that is awaited or expected. They are considered a possibility. If we compare this definition of a “prospect” to a “lead,” we can say that prospect is closer to a result or an outcome.
While a lead may not be definite, a prospect is definitely closer to the goal of getting actualised. Putting it in the sales perspective, a prospect is someone who has experienced bidirectional communication with the company leading to its expression of intent to buy. They’re ready and are engaging in a two-way conversation with the business.
As such, we can say that a lead can put us in the direction of the desired outcome while a prospect is a final step before the actualisation of the outcome. A prospect, therefore, is a qualified individual who has shown interest in making a purchase decision through a two-way line of interaction, communication and engagement.
The key takeaway
All in all, we can see that prospects are further down the purchase cycle than leads. Furthermore, from the two definitions that we’ve gathered and dissected from their basic definitions, we can say that their key difference lies in their engagement. Leads only had one-way communication or minimal interaction with the company, while prospects are characterised by two-way communication.
A lead has reached out to a company, maybe through a form or signup, and gave their contact information. During this time, the lead is already at the top of the funnel and has entered a potential purchase cycle. The lead then receives communications from the company, and it may or may not reply to these communications to sustain interaction.
Prospects, on the other hand, are created after a sales-qualified lead is contacted by a sales representative. For the lead to become a prospect, it needs to engage in a dialogue with the sales rep. This could be through a meeting or a phone call. It depends on what the prospect prefers.
To give you a more visual definition, here’s a diagram of the difference between the two:
So that’s it. Those are the differences between leads and prospects. The line may be thin, but they’re discernible, and with enough experience, you’ll get the hang of distinguishing the two. We hope that this information can help you as you navigate the world of digital marketing.
What do you think?
If you would like to discuss how Boom Now can help you with your lead generation strategy please call 0413539700 or email rebecca@boomnow.com.au or submit a contact form.
