A team is only as strong as its ability to communicate. That’s why it’s essential to ensure your sales reps have a common understanding of sales terminology. Confusion around how to understand the difference between the 3 potential customer types is a common experience for sales teams. In this article, you’ll learn how to answer the question, “What are Leads, Prospects, and Opportunities in sales?” once and for all.
Lead vs Prospect vs Opportunity
As your potential customers move through your sales pipeline, the terminology used to describe them will change to reflect their level of engagement with your brand. Let’s explore the different types of customers and their characteristics.
What is a Sales Lead?
A lead is someone who has expressed interest in your brand or your products and services. These potential customers are at the beginning stage of their relationship with you. Your engagement with them could fizzle out, or it could turn into a closed sale. There is no way to know what the outcome of your interactions will be until you qualify your leads to determine how likely it is that they will move down your pipeline.
Here Are 4 Ways to Find Leads:
1. Get referrals from existing clients.
2. Draw inbound leads with advertising campaigns.
3. Start conversations through cold calling and cold emailing.
4. Create a list of leads using tools that help you find your ideal clients.
Your leads will be at different degrees of readiness to have a sales conversation depending on how they are qualified. You can classify leads according to the method that is used to qualify them. Classified leads fall into the following three categories.
3 Types of Leads
1. Information Qualified Leads (IQLs)
Information Qualified Leads are people who have exchanged their contact information for access to complimentary valuable content that you have provided, such as an ebook, a webinar, a case study, or a subscription to your newsletter.
These leads require additional interaction with your brand through nurturing and direct contact before they can be qualified.
2. Marketing Qualified Leads (MQLs)
Marketing Qualified Leads enter your pipeline as the result of lead generation activities including advertising and blogging.
These leads will also exchange their contact information in order to access additional free and informative content from your company.
But unlike Information Qualified Leads whose primary concern is researching more about their problem, Marketing Qualified Leads want to discover why your product or service may be the solution they need.
Marketing Qualified Leads are more receptive to a sales pitch because they are already considering your offers.
3. Sales Qualified Leads (SQLs)
Sales Qualified Leads have a strong interest in purchasing your products and services. These leads have done enough research about your brand and your offers to take the next step of signing up for a trial, requesting a product demonstration, or scheduling a discovery call.
Sales Qualified Leads believe that your solution could be exactly what they need to solve their problem. They require more experience with your brand and your offers to be certain of their purchasing decision, and they are open to having a sales conversation with your team.
What is a Sales Prospect?
A lead who fits the profile of an ideal customer and is engaging in ongoing conversations with a sales rep is a prospect. Prospects are progressing towards a decision, but they still need more information before they make a purchase.
Prospects can remain in this stage of their buying journey for a relatively long time, especially if the prospect is a large organization with several individuals who handle the decision.
During this stage, it’s important to continue to nurture prospects in between conversations with useful emails.
Pay attention to whether your prospect is progressing towards a decision to determine if your sales team should continue to invest time and resources into helping them move into the next phase.
But don’t make the mistake of ruling out excellent prospects who are slow decision makers too soon.
Perhaps you’re wondering how you’ll be able to tell if your Prospect is still worth pursuing. We’ll discuss what it takes to determine whether a Prospect is ready to progress or if you should rule them out in the next section.
What is a Sales Opportunity?
An Opportunity is the term for a potential customer who is most likely to become a customer.
A Prospect transforms into an Opportunity when your team has determined that they have enough information to make a purchase decision about your product or service.
When you have had conversations with everyone involved in making the purchase decision and you are confident that you have communicated all the critical information about your company and your offers, it’s time to make the sales pitch.
If your Prospect is disinterested in participating in the sales conversation, they are once again considered a Lead. They may be interested in seriously considering your solution in the future, so don’t cease all contact with them. Follow up at a future date to see if their circumstances have changed.
How to Turn a Lead Into a Prospect
Now that we’re clear on the difference between a Lead and a Prospect, let’s discuss how you can help your potential customers transform into Prospects.
To recap, a Lead is a person who is interested in your brand as the source of a potential solution for their problem, but they aren’t ready for a sales conversation. They need help to decide to find out more about how they can benefit from your product or service.
Helping your Leads transform into Prospects is a process called Qualification.
Here Are 5 Smart Ways to Qualify Leads:
1. Ask open-ended questions to learn more about what they’re looking for in a solution.
2. Send helpful content such as a newsletter or articles that you think they’d like to read.
3. Use a tool to collect information about them to determine whether they fit your company’s Buyer Persona.
4. Demonstrate your expertise and trustworthiness by offering solutions that suit the problems they mention.
5. Use social media to engage regularly with your audience and start conversations that could lead to ongoing contact.
The bottom line is to look for ways to be of service to your potential customers as early as possible in the sales funnel so that they will want to continue engaging with you.
How to Move Prospects Into Opportunities
After you have successfully qualified Leads and turned them into Prospects, the next step is to help your Prospects turn into Opportunities.
As you read earlier in this article, the Prospect stage is sometimes longer than you expect. This is the stage when your potential customers are so focused on your solution as the potential relief from their pain that they are full of questions and in need of assurance before they are ready to purchase.
The key to helping Prospects transform into Opportunities is to provide ample education while patiently gauging their response.
In order to accomplish this, you must have a solid marketing strategy in place. One of the most basic, yet incredibly important ways to educate your Prospects is through your newsletter. This is why it’s so important to build an email list.
Social media is also useful for providing education, building trust, and offering entertainment to your Prospects. Brands that make their Leads and Prospects feel good are brands that experience growth and longevity. So have a little fun with your Prospects on these platforms.
How to Find High Quality Leads Fast
One of the easiest ways to find high-quality leads and get the data you need to qualify them is with the Datanyze Chrome extension. Sign up free today to build a list of incredible leads at scale and use its built in icebreaker feature to help you begin meaningful conversations with Prospects that lead to sales.