The Difference Between Leads and Prospects: What You Need to Know

Sales are all about relationships. Every customer or client starts as a complete stranger.

It’s only through a consistent sales process that you can take a stranger and move them down the funnel, from lead to prospect, and into that hallowed place called conversion land.

The terms “lead” and “prospect” are just two of many terms used to describe the status of a business relationship. The difference between leads and prospects is explained in this blog.

A lead is someone who may fit your target market but is not ready to buy just yet. Through your own research, you’ve handpicked (literally, or through automation) a pool of people who may fit your target market.

It all begins as a complete stranger for each and every customer or client. It's only through a consistent sales approach that you can convert a stranger into a prospect and then into conversion land, from lead to customer.

The status of a business relationship is referred to by terms such as "lead" and "prospect."

A lead is a potential customer who does not yet feel ready to buy. You've handpicked (literally or through automation) a group of individuals that may be suitable for your target market as part of your own research.

However, if they don't react or are unable to buy right away, they'll be a lead. These leads are sometimes known as "cold leads" when they continue to ignore your attempts to contact them.

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The Difference between Leads and Prospects: Why Does it Matter?

The difference between leads and prospects is that they are two distinct groups of individuals in your sales and marketing.

The difference between leads and prospects is that it requires two different types of communication in their sales and marketing departments.

Informing leads about your product is all about raising awareness of it and encouraging interested people to engage with you. Prospects may be contacted through email, phone, social media platforms like LinkedIn.

So, let's talk about communication. Leads are people who have only engaged in one-way communication with you. They are:

• On your email list, there may be people you don't know.
• Connections you've messaged on LinkedIn
• In the comments section of a blog post, there are several individuals who leave their thoughts.
• People who have liked or shared your social media posts
• Names on a list you purchased from a marketing firm

Leads have the potential to turn into customers, but they haven't spoken with you or your sales team yet. There's a lot of one-

Prospects have expressed an interest and are ready to engage. A prospect, for example, is:

• Someone you've spoken with on the phone
• If you've written an email to someone, they might have responded.
• A lead who has visited your website after clicking a link in an email
• Someone who meets the requirements of your target market, with whom you've had preliminary contact at a trade show
• Someone who inquired about your product or service in a social media discussion

Prospects are placed a little further down in the sales funnel than leads.

The Difference between Leads and Prospects: Overcoming the Line

If you want to get more clients or consumers, you'll need to convert your leads into prospects. In sales, qualification is the process of converting leads into prospects.

To become a prospect, a lead must satisfy three criteria: they must be compatible with your target market, have the desire to acquire what you're selling, and have the power to do so.

These are the variables you should consider while researching and conducting sales talks in order to progress your leads down the funnel; let's take a closer look at each.

They are relevant to the demographic you want to reach.

If you've done your marketing correctly, you'll know a lot about your target market.

Target markets used to be all about demographics, such as middle-aged suburban women or millennial gay men.

However, the contemporary way to think of your target market is that they have a need or desire to acquire what you're selling.

As a result, someone who was formerly known as "lead" becomes known as a "prospect" when you can show that they have some motivation to locate anything similar to yours.

Example: You work as a sales and marketing consultant for self-published writers.

A lead is someone who expressed interest in self-publishing, such as a member of a Facebook group for self-pubbed romance authors but has yet to publish a book.

A prospect is someone who has published an ebook on Amazon and wishes to increase sales; however, they require assistance with sales and marketing.

They are prepared to make a purchase

According to research, the subject that clients want to talk about most in their first contact is pricing.

It's for good reason: if your service isn't within their budget, it'll be difficult to convert them into a sale. A price-related refusal, on the other hand, doesn't necessarily imply "no, always" — just "no, for now."

If you nurture these leads over time and they become prospects, there's a chance you can eventually turn them into customers.

If you encounter this issue repeatedly, it might point towards an issue with your pricing or your target market selection.

Example: You're a medium-sized digital firm with a lead: a solopreneur developing a new product.

You learn that they don't have the cash to pay for your package, therefore they'll most likely benefit from finding something cheaper.

They have the power to purchase

A prospect must be the decision-maker when it comes to adopting your product — otherwise, they're just a lead.

Inquire about the responsibilities, pain points, and objectives of a lead during your sales conversation.

It should become evident from their answers whether they have the authority to make a purchasing decision or not.

Example: You're a freelance video producer for non-profits. You get in touch with a marketing assistant at a big nonprofit organization, and you set up a phone call.

The contact information of the marketing manager is revealed on the phone, so you'll need to get it and contact them.

Turning leads into prospects takes a methodical approach.

Understanding the difference between a lead and a prospect is one step closer to getting inside your customers' minds, allowing you to tailor your communications and ultimately close more sales.