Lead Vs. Prospect
Lead Vs. Prospect
Lead Vs. Prospect
Uncertain? This uncertainty can hurt your company's potential to gain revenues.
Before we get into what makes a prospect and what a lead actually is, we should look as to why this distinction is so crucial to sales.
During the sales process, potential customers go through certain stages of engaging with your business. They start out not knowing who you are, then there is tentative interest. Some will come to desire your product and in an ideal situation, that desire becomes strong enough to succeed in a purchase. The terms lead and prospect can help you identify how far along this progression the individual in question might be and what action you need to take to move them closer to a sale.
So what is a lead? The meaning of a 'lead' has become so convoluted over the years that you could ask many sales managers, CRM providers or marketing experts and end up with 20 different responses. So I will provide the definition I've found to be the clearest and the most beneficial in categorizing data:
"A lead is generally an individual who has not given you permission to engage with them."
Leads tend to sit in the "I don't know who you are?" phase of a sale. Although some may be tentatively interested in what you have to offer but have not made contact with you yet (for example they have seen an ad about your company in a magazine).
Leads could include:
. Business Cards
. Purchased Contact Lists
. Some Referrals and;
. Business Data drawn from sources like the Yellow Pages or Google
A "lead" may or may not know you, your product or the service you are offering, and has not granted you rights to contact them. They have not given you permission to be added to your mailing list. They are at the initial phase of the sales process.
So what is a prospect? A "prospect" is a lead that has now provided you some information for you to initiate contact with them either through a business card, email or phone number.
A prospect knows who you are and have shown enough interest in your product or service to permit you to contact them. They expect to be sent some information to aid them in making a buying decision or they're just waiting for a push to court them a little.
Prospects may include:
. Web visitors opting in to your website to receive information such as an Ebook
. An appeal to be included in your newsletter list
. Incoming calls requesting data or to schedule an appointment;
. Emails asking a question about your product or service
A prospect is typically further along the sales process than a lead. They know who you are and has shown some interest on your product or service. Turning that interest into a desire strong enough to compel them to make the purchase is now up to your sales team.
How are you going to use these definitions to propel your sales further up? These definitions are virtually worthless unless you know how to use them and have the tools to track them.
When you categorize a contact as either a lead or a prospect, you now know roughly where the relationship is up to. A lead might not know who you are, so one of the first things you will do is introduce them to your product, service or organisation. You then need to secure their permission to start marketing to them, through email, phone calls or even direct mail.
They progress further to being the prospect from that point onwards. Your attention should now change to providing them with the necessary information useful to make a buying decision or perhaps an alternative action you can take to complement the relationship until they feel that need to avail of your product/service.
But what if you're working in a high sales environment? How do you know which contacts are leads and which are prospects? There comes a certain point wherein you have information overload and too many people in different levels of the sales process to keep it more organised in your head. This is where a Customer Relationship Management System (CRM) is useful.
Using a CRM, you can instantly see whether a particular person is a lead or a prospect and take the appropriate action. A CRM will also give you much more detail on the individual's progress through your sales funnel. So a contact may be categorized as a prospect but when you enter their record you might be able to see which product they are interested in, the last email you sent them about that product, any follow up calls you made (and corresponding notes) and perhaps a note to call them next Friday to finalise the purchase.
You'll also be able to use the CRM system to determine:
. The total number of new relationships classified by sources (e.g. telephone, website, trade show or referral)
. Last contact made to a prospect
. Leads not contacted and;
. Scheduled tasks for Prospects and Leads
You can use this to get a snapshot of your business and more importantly, what you or your team can do to improve your revenue today. Are there any prospects waiting for more information? Which among the leads haven't been called yet? What prospects need a little nudge (perhaps a follow up call) to close a sale?
Information is power and by having a better understanding of what a 'lead' and a 'prospect' is, your team can work more efficiently to turn them all into 'customers'.
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