Sales leads, prospects, and opportunities — which is which?
The trouble with defining specific sales terms is that sometimes there is no universal definition. But not knowing what the commonly understood meanings of terms are can lead to confusion, a rush through the sales funnel, and even missed chances to sell.
Getting the hang of terminology can be helpful. So can being on the same page with the rest of your sales team.
What’s the Difference? Prospect, Lead, Opportunity, and Their Definitions
Let’s go through the three terms and analyze how they’re described and defined in terms of the sale process.
Lead generation is the first step for sales professionals. Leads are the names on your list, referrals from other customers, the fruits of your inbound advertising efforts, and anyone who has responded to attempts to connect. It can be someone that came to you, a cold outreach, or a result of networking.
Before you can ever start worrying about getting a sale, you require at least one sales lead. They aren’t guaranteed sales, but they are possibilities worth sniffing out to see if more can come from talking with them.
There are three main types of leads:
- Information Qualified Leads (IQLs) are already starting to research their pain point but aren’t necessarily considering your solution. These people have given you their contact information to gain access to something you offered, such as your newsletter or free web series. They may or may not be the decision-maker of their company.
- Marketing Qualified Leads (MQLs) are IQL that have requested information about your offer. They aren’t sold on doing business with you, but they’re much easier to move through the sales funnel because they’ve shown interest.
- Sales Qualified Leads (SQLs) are made when MQLs decide your company might be a good fit and have shown interest in what you’re offering. They have probably signed up for a free trial or asked for a demo. These are hot leads and need immediate attention because they are the most likely to turn into customers.
In general, prospects are leads that have been qualified. They’re a good fit and are working toward a decision. You know that they are interested because you’ve talked to them and have figured out their pain points. They’re willing to continue the conversation, but that doesn’t mean they’re ready to buy.
Some people also define prospects as people or businesses that fit your buyer profile, meaning that you already know this lead needs your solution because you’ve done the research and just need to reach out with your offer.
Certain prospects will need more convincing and some will be receptive but will need to consult other people in their company before deciding. The prospect stage can be the most lengthy stage of the sales cycle.
Once you’ve done the work of sharing information on your solution and have determined that the business is a good fit, you have a chance to open the door to opportunity.
Opportunities arise when prospects are truly considering your product or service and you’re in serious contention for their business. They have a high probability of becoming a customer. It isn’t until this stage that professionals like you will see an actual sale on the horizon.
How Do Leads, Prospects, and Opportunities Go Through the Sales Funnel?
The sales funnel flows from leads to prospects to opportunities and finally to the sale. While the definitions may not be universal, the order certainly is.
It starts with a wide top where lots of leads go in. But as leads move through the funnel, they begin to either fall away because they aren’t a good fit or turn into prospects. A few come out of the small tip at the bottom of the funnel, having turned into opportunities for you to add some sales to your books.
Overall, you get more leads through legwork, more prospects through listening, and more opportunities through convincing them of your offering’s benefits.
Working for Lead Generation
To gain leads, you have to:
- Advertise and market your business,
- Ask for referrals,
- Utilize your existing contact list and connections
- Attend networking events
- Follow up on introductions
It’s the easiest stage to work. Try adding a form to your website or sending out email campaigns. You may also start posting interactive content on social media or offering referral incentives to draw people in.
Nurturing a Lead Into a Prospect
To move forward, you need to learn how to identify sales prospects you can nurture. Begin a conversation with them, which isn’t always easy. But the conversation is how you’ll qualify each lead and ultimately know if they are interested or not. When you get a chance to talk, assess their pain level — and whether or not they are ready to solve the pain point.
Consider logistical issues such as their budget, timeframe, buying cycle, and even their current provider. To get the most prospects, you have to show genuine interest and explain clearly how your offer can help. Ask questions, help them brainstorm, share content that shows you are a thought leader in your industry, and so on.
If they’re interested, you’ve just landed yourself a prospect. At this point, your job is to be there for them. Answer any questions, and continue to remind them of your solution.
Turning a Prospect Into an Opportunity
Prospects can take a while to turn into opportunities, but the process will reveal quite a lot. You’ll learn more about how they do business and what makes them tick.
As you have more conversations, you might discover that they just aren’t ready to commit. Prospects like this shouldn’t be discarded, but they probably won’t become opportunities right away.
A prospect becomes an opportunity when they have decided that your solution is in the running. Essentially, this is your chance to make the sale — not to learn more or share more, but to actually close the deal. While it’s not a guarantee you’ll succeed, you’ve done the work to move the customer through the sales funnel.
How Can Sharetivity Help Your Business?
If you’re not satisfied with your progress in generating leads or moving them through your sales funnel, we can help.
Sharetivity is a Social Selling Automation tool. Because traditional methods of reaching out to prospects are becoming less effective, adding digitally-powered social selling to your strategy is key. Sharetivity helps bring leads alive with crucial information even before sales professionals make contact, improving sales engagement. Check out Sharetivity today to learn more.