Some might think ‘lead’, ‘prospect’, and ‘opportunity’ mean the same, while others see them as different but not significantly so.
Grasping the differences between these categories is key to handling them effectively, which in turn can drive your business’s growth.
In our article, we’ll clarify what each of these three terms means, helping you understand their exact roles. Most importantly, you will know how to effectively move leads through your sales pipeline.
What is lead?
A “lead” is anyone who could potentially purchase something from your company.
It makes them the broadest category at the top of the sales funnel.
There are numerous ways to generate leads such as:
- searching LinkedIn for potential customers,
- exchanging high-quality content for email addresses,
- running social media ads,
- receiving customer referrals,
- making cold calls.
However, it’s important to note that leads are largely unqualified. This means not every person you come across is a lead. They must realistically have the potential to buy from you.
Still, many leads might not match your ideal customer profile; those who do are more accurately called prospects.
But remember that there are also different types of leads that can impact your business’s growth.
Check out our article to learn more about the difference between cold, warm, and hot leads.
What is the prospect?
A prospect is essentially a qualified lead.
Qualifying a lead involves determining if they’re a good match for your product or service.
This process requires comparing leads against your company’s ICP (Ideal customer profile) – essentially, a checklist of traits that describe your perfect customer.
For example, in a consumer market, your ideal customer might be an American woman in her mid-thirties with two kids and a household income of at least $75k. In a B2B context, it might be a decision-maker at a large U.S. company with a significant budget.
Qualifying leads can be done in several ways. The simplest is directly conversing with potential customers to understand their needs and assess if your offerings align with them. Online forms are another effective tool for gathering essential customer information.
What is opportunity?
An opportunity is a prospect who shows genuine interest in what you’re selling.
Not every individual matching your ideal customer profile will necessarily make a purchase. They might not need what you offer, could prefer a competitor, or may not afford your services.
An opportunity, however, is close to becoming a customer and is crucial in the lead vs. prospect vs. opportunity debate. They are the most valuable for your focus and efforts, as they have the highest chance of making a purchase.
Why does this matter?
You probably think “What’s the point?”.
In fact, understanding the differences between leads, prospects, and opportunities is more than just a matter of semantics.
Each term signifies a distinct stage in the sales funnel.
Recognizing these stages is crucial because it determines how you should approach and manage each category. Different stages require varying levels of attention and distinct strategies, which can significantly impact your sales effectiveness and business growth.
For example, a detailed sales presentation might be overkill for a lead but perfectly appropriate for an opportunity. This approach not only streamlines the sales process but also keeps it organized. Knowing a contact’s stage in the sales funnel clarifies the necessary actions for conversion, enhancing the overall success of your sales efforts.
How can you convert leads to prospects?
Identify the ideal customer profile (ICP)
For B2B, your ICP might be a specific industry or company size.
For instance, if you offer a cloud-based HR platform, your ideal customers could be medium-sized tech companies with a workforce of 100-500 employees. Consider factors like industry, company size, budget, and the specific challenges they face.
If you need help figuring out where to start check our article about how to create ICP for your business.
Engage with personalized communication
Reach out to your leads with messages tailored to their needs and interests.
For instance, if you’re targeting small business owners, your communication could focus on how your product or service solves common challenges faced by small businesses. Personalization increases the relevance of your message, making the lead more likely to engage.
If you are not sure about how this can help your lead generation process, read our article about the power of personalization + steal our top 3 personalized strategies.
Educate and nurture
Provide valuable content that educates your leads about your product or service and how it addresses their specific problems or goals. This could be done in the form of blog posts, ebooks, or webinars.
For example, if your company sells software for project management, you could offer webinars on improving team productivity, which is a key concern for your target audience.
Read our guide to learn how to use LinkedIn for lead nurturing.
Qualify through interaction
Engage directly with leads to assess their interest and fit. This can be done through follow-up emails, phone calls, or meetings.
For example, during a phone call, you might ask questions about their current challenges and discuss how your product can help, thus gauging their interest and potential as a qualified prospect.
Analyze responses to adapt the process
Monitor how leads respond to your outreach efforts.
Are they opening your emails? Are they clicking on links to your website?
Use this data to refine your approach.
For instance, if you notice that leads are particularly interested in certain types of content, like case studies, you might focus more on producing similar content to engage them further.
Wrapping up
The topic of leads, prospects, and opportunities can be quite confusing.
Now that you understand what these terms mean and their importance, you’re better equipped to turn leads into prospects and prospects into opportunities, enhancing your ability to consistently secure deals.
A final tip: consider using an agency’s help like Axellerato to generate quality leads consistently, and even nurture them to turn into prospects and opportunities. This will help you keep a clear view of the process, save tons of time and get the full schedule of booked calls.
If you are not sure where to start and need help with all this, book a consultation call with us.
