We usually get confused between Lead, Prospect, and Opportunity. Not only this, we often hear these terms in our sales process. But you never understood the actual meaning of them. There isn’t any specific definition for all these terms, but their characteristics differentiate them from each other. And those make a huge difference between them.
To retain your customers, you will need to understand the actual meanings of lead, prospect, and opportunity. You will need to understand the significant difference between these three terms. Do these terms also confuse you? We know your answer perfectly. And, for that, we have got you covered.
Lead, Prospect, and Opportunity
We have created a detailed guide on talking about these three terms: Lead, Prospect, and Opportunity. We know these three terms confuse you much, and you want to know everything about them in detail. We have covered everything about lead, prospect, and opportunity. We have covered various sub-topics about these three terms, such as their meanings, how to convert a lead into a prospect, and much more.
So, continue reading to learn everything about Lead vs. Prospect vs. Opportunity in Sales.
What Is a Lead?
Lead is a person or company interested in your product or services. It could be a person or a company recently introduced to your products or services. At this stage of the sales process, the lead isn’t qualified yet to become a prospect. Leads come at the top of the sales funnel.
One of the biggest attributes of a lead is they are a bit interested in your offerings. But, as a sales representative, you don’t know whether they are your ideal customer. You can determine whether they match your Ideal Customer Profile (ICP). At this stage, you don’t know anything about them, such as their interests, demographic information, company information, etc. The only thing you know is that they are interested in your product.
Businesses use different marketing methods to generate leads, such as Facebooks Ads, Google Ads, Instagram Ads, etc.
Leads can be generated with the help of:
- Engagement from content;
- Form signups;
- Cold calls;
- Inbound marketing or business website;
You can easily convert your lead into a prospect by educating them about your offerings through different content types, such as videos, podcasts, blogs, case studies, free trials, etc. This increases the chances of getting them converted into a prospect.
This is a brief overview of Leads. Read the next section to know the types of leads.
What Are the Types of Leads?
Here are the types of leads.
1. Sales-Qualified Leads (SQLs)
Sales Qualified Lead is a prospect who has already completed the process of moving through the sales pipeline from a marketing-qualified lead. In addition, they have earlier shown interest in your offerings during the call or meeting. Now, they are ready to talk to the sales team for further process. The sales team will now speak to these potential leads to convert them into potential buyers.
2. Product Qualified Leads (PQLs)
Product Qualified Lead is the prospect that finds value using a free trial or freemium model of your product or service. We can also say that Product Qualified Leads are just one step away from becoming your paying customers. One of the most significant advantages of PQLs is they are much easier to convert than other lead types.
3. Marketing Qualified Leads (MQ Ls)
Marketing Qualified Lead is the prospect that indicates interest in a brand’s offering as a result of marketing efforts or who is otherwise more likely to convert into a customer. MQLs intentionally take actions with your brand marketing, such as downloading a free trial, submitting contact information, etc.
4. Cold Leads
Cold Leads are the leads with fewer chances of converting into a Warm Lead or Hot Lead. We ensure multiple things before qualifying leads, such as Budget, Authority, Need, and Demand. If a lead meets all these requirements, then they are known as Hot Leads. But, if a lead only meets at least one of the following criteria: budget, authority, need, and demand. This is known as Cold Lead. So, this decreases the chances of upgrading a lead into a prospect.
5. Warm Leads
When Cold Lead qualifies, it converts into a Warm Lead. Warm Lead comes at a low probability of converting into Hot Leads. Usually, these leads don’t meet two requirements. Either the lead doesn’t need the product right now. Or they don’t have a budget to buy your offerings. But, these leads can be converted into prospects in the future with regular follow-ups.
6. Hot Leads
Hot Leads are leads with higher chances of converting into prospects. They meet all requirements, and if not all conditions, they at least meet these requirements: budget, authority, need, and demand. When a lead meets all these necessary requirements, they are known as Hot Leads.
These are the most common types of leads. Check the next section to learn about lead prospecting.
What Is Lead Prospecting?
Lead prospecting is the process of knowing whether the lead is qualified to convert into a prospect. Later, turning the same prospect into a paying customer. The primary goal of lead prospecting is to create a lead’s interest and use that interest to schedule a meeting with the sales team.
One of the most important responsibilities of a salesperson is to know the leads and convert them into paying customers or an asset to the company. In simple terms, Lead Prospecting means converting the lead to a prospect, then into a customer. The entire process is called Lead Prospecting.
This is what lead prospecting means. Continue reading the next section to learn about prospects.
What Is a Prospect?
When a lead qualifies, it is known as a Prospect. Prospects are the leads interested in your products or services and have already attended a sales meeting. For some companies, a prospect is the one that matches their Ideal Customer Profile (ICP).
For instance, a sales team is looking for prospects living in a particular geographical area. If a lead matches the required criteria, it will be called a Prospect. In short, if a lead matches the company’s buyer persona, they refer to them as a Prospect.
After that, the sales representative schedules a discovery call with the lead to learn more about them. Sales Discovery Call helps them understand their prospects’ needs, budget, buying timeline, and decision-making authorities. If the sales representative finds a problem their services can solve, they call it a Sales Opportunity.
This is what prospects are. Read the next section to learn how to identify a prospect?
How Do You Identify a Prospect?
Not all leads are the right prospect for your products or services. There are different ways to identify whether a particular lead is an ideal prospect for your business. Here are a few things you can do to identify a prospect.
1. Match the Lead With Your Ideal Customer Profile
The first thing you need to ask yourself is, does the prospect look like your ideal customer? You can start matching the prospect with your requirements or ICP. You should evaluate these things while finding the right prospect:
- What’s their Industry?
- What’s their Company Size?
- How Many Employees Are Working In the Company?
- What’s their Annual Revenue?
- What’s the Persona of a Decision-Maker(s)?
- Geographical Information
If the prospect fits well in your Ideal Customer Profile (ICP), then congratulations, you have found the right prospect for your business.
2. Use BANT
BANT is one of the oldest and most effective Lead Qualification Framework. This framework consists of four important elements: Budget, Authority, Need, and Timeline. While checking the quality of lead, always ask yourself questions about Budget, Authority, Need, and Timeline. Like this:
- Budget: Is the prospect capable of buying?
- Authority: Does your contact have adequate authority to sign off on a purchase?
- Need: Does the prospect have a business pain you can solve?
- Timeline: When is the prospect planning to buy?
Salespeople use this basic framework to know whether the prospect qualifies. This framework relies on customers’ budgets, authority, needs, and timelines.
3. Understand Their Pain Points
It is indeed important to understand your prospects’ pain points. Without understanding their pain points, and challenges, it is insensible to introduce them to your products or services. You will waste your time, energy, and efforts on non-qualified leads. So, first, understand their pain point if you think that your product could be the solution to their problems. Then, you can consider them as your prospective buyer.
These are some of the ways to identify an ideal prospect. Consider these points while determining the right prospect for your business. Read the following heading to learn to use prospects.
How to Use Prospects?
Here are the steps to use prospects.
1. Know Your Prospects
What is the best way to know your customers? It’s listening to them actively and carefully. You will need to get as much information as you. One of the best ways to get more information from their heads is by asking open-ended questions. Open-ended questions will insist them to tell more about their problems. During the conversion, your primary goal should be to understand their needs, problems, challenges, and demands in detail.
2. Generate Prospects Interest in Your Product or Services
The next step is to generate their interest in your product or services. So, how can you do that? Here’s how to do it. You can increase the interest of your prospects in your products and services by showing them the benefits. You can show them how your product or services can benefit them and solve their problems.
This is how to use prospects for better results. Read the next section to check what a sales opportunity is.
What Is a Sales Opportunity?
When a sales representative finds that prospects’ problems can be easily solved with the help of their product, it is often called an Opportunity. The gap between the prospect’s needs and the current situation can be called a Sales Opportunity.
Sales representatives call this situation an ‘Opportunity’ because they get an opportunity to pitch their products and services to the customers. Customers at this stage are more likely to buy your offerings because they fit well in the BANT framework. They are also known as potential clients for a business. Opportunity is the last step before ‘Customer’ in the sales funnel.
Read the following section to see what comes first: lead or prospect.
What Comes First: Lead or Prospect?
The answer to this question is quite simple and clear: lead always comes first. There are three stages of a sales funnel: Leads, Prospects, and Opportunities.
Leads come at the first stage of a sales funnel. It means a person who has recently learned about your products or services. But still don’t know whether they are the ideal customer for your product.
Then comes Prospects. Prospects come at the second stage of a sales funnel. When we upgrade a Lead, we call them a Prospect. Prospects are people interested in your products or services. Besides, they have already attended your sales meetings.
At the last stage of a sales funnel, we have an Opportunity. The gap between the prospect’s needs and the current situation is known as a Sales Opportunity. This is because sales representatives get an opportunity to introduce their products and services to potential clients. At this stage, the chances of turning the potential clients into customers also increase.
Continue reading the next section to know is lead generation sales or marketing.
Is Lead Generation A Part Of Sales or Marketing?
We usually get confused about the role of Lead Generation in a business. Lead Generation is mainly a part of the Marketing Process, but to some extent only. After the Lead Generation, it becomes a part of the Sales Process. Let’s understand this in detail.
The marketing team uses different marketing methods to generate leads for the sales team. There is no need for a sales team until they generate enough leads. After generating enough leads, they assign leads to CRM. Then the sales team uses those leads to close them and generate more revenue for the enterprise. In simple terms, both departments are aligned with each other regarding lead generation.
First, the marketing team runs multiple campaigns to generate leads. Then, the sales team nurtures those leads to convert them into paying customers.
Are you still confused between customers and leads? Read the following section to learn the difference between lead and customer.
What Is the Difference Between Lead and Customer?
The major difference between a lead and a customer is the information. We don’t have detailed information about them when we talk about Leads, and we only know that they are interested in our product or services. On the other hand, when we talk about a customer, we know a lot about them, such as needs, demands, budget, authorities, etc. Usually, customers are the one who has already opted for your product or services or planning to opt.
Another significant difference between a lead and a customer is their position in the sales process. A lead comes at the very first stage in the sales process, whereas, customer comes at the last step in the sales process.
We know they match our company’s buyer persona when talking about the customer. But, when it comes to Leads, we don’t know whether they are the ideal fit for our products or services.
Read the following section to know the difference between leads, contacts, and opportunities.
What Is the Difference Between Leads, Contacts, and Opportunities?
Understanding the difference between Leads, Contacts, and Opportunities isn’t tricky. Let’s understand this in the best possible manner.
As we all know, Lead is the first stage of the sales process. Whereas, Contact comes after Prospect and before opportunity. At last, opportunity is the final stage of a sales process. Let’s dig deeper.
In the first stage, we only have a little information about the person, such as their name, email address, contact number, job title, etc. After that, when the sales representative upgrades the lead to prospect, they get more information about the customers. The data could be their needs, challenges, problems, budget, etc. Most importantly, in the Prospect phase, the lead also shows some interest in the services.
After the prospect phase, we have the contact phase. When the lead expresses some interest in the offering, and you keep following up with them, they become a contact, and this is because you are now actively in touch with them.
And, opportunity occurs when a salesperson sees the problem and has a chance to fix it with the help of their products and services.
This is the clear difference between leads, contacts, and opportunities. Continue reading the next section to know the difference between lead vs. prospect.
What’s the Key Difference Between Lead vs. Prospect?
Here’s the key difference between lead vs. prospect.
Different Stages in the Sales Process
One of the key differences between a lead and a prospect is the position in the sales funnel. The lead comes at the top of the sales funnel. On the other hand, prospect comes after the lead and before opportunities.
Different Levels of Engagement
Another critical difference between a lead and a prospect is that both have different levels of engagement. The lead comes at the first stage of the sales process with one-sided communication. In contrast, a lead becomes a prospect with the help of two-way communication.
Different Methods of Communication
The last difference between a lead and a prospect is that both have different methods of communication. The lead works with one-side communications, and in comparison, a lead becomes a prospect with the help of two-way communication.
These are the key differences between a lead and a prospect. Read the next section to learn how prospects, leads, and opportunities are connected to each other.
How Do Prospects, Leads, and Opportunities Connect?
Prospects, Leads, and Opportunities are part of the same sales process, and all three terms are interrelated to each other. For instance, you can identify a prospect without a lead, and without a prospect, you can’t find opportunities.
It’s important to understand that not every lead is a prospect for a business, and not every prospect begins as a lead. Not all leads become prospects because they don’t meet the required criteria, such as demographics, etc. To sum up, Prospects, Leads, and Opportunities tend to work together, and a sales process isn’t complete without all these elements.
Do you want to know how to convert a lead into a prospect? Read the next section to learn about it.
How To Convert a Lead Into a Prospect?
Follow the steps to convert a lead into a prospect.
1. Qualify Your Leads
Lead Qualification is an integral part of a sales process, and it helps sales representatives to decide whether the potential customer is likely to act or not. In short, it is finding whether they will buy the product or not.
So, the first step is to ask the right questions to your leads. Your main aim should be to gather as much information about them and identify whether they qualify. Here are some questions you can ask your leads:
- What business challenge can this product help you solve?
- What has prevented you from trying to solve the problem until now?
- What does your budget look like for this project?
- Are you using any solutions to solve this problem? If so, why are you switching?
- What is your principal priority in terms of solving this problem? Which functionality would be most important?
2. Nurture Your Leads
After qualifying your leads, the second step is to nurture them. Now, you have got the leads that have the potential to convert into customers. The question is – How to Nurture your Leads? The basic step is to introduce them to your products or services. In short, you need to educate them about your offerings. You can share your blog, YouTub videos, social media profiles, etc.
3. Collect Information About Them
The last step is to collect more information about them. This information will help you identify whether they are the perfect prospect for your business. You can collect information like email addresses, social media profiles, phone numbers, job title/position, location, or anything else which might be important in the sales process.
This is all about Lead, Prospect, and Opportunities. We finally looked at the main differences between lead vs. prospect vs. opportunity in Sales. We learned in detail about each aspect of lead, prospect, and opportunity. In this guide, we looked at each difference between lead, prospect, and opportunity in Sales. We hope you have now understood the actual meaning of lead, prospect, and opportunity.
That’s all for this guide. We will see you with another informative guide on Sales and Marketing.