How Prospect and Leads Are Different

How Prospect and Leads Are Different

What is the difference between a prospect and a lead? That depends upon your information source. Prospects and Leads are part of the sales funnel. Let’s look at how sales funnels work to define how prospects and leads differ.The Sales Funnel

Sales funnel definitions and depictions will vary by company, but we’ll start with the basics. In broadest terms, the sales funnel is the steps your potential customers go through as they traverse the sales process.

Awareness

The funnel is wide at the top, as you may have a broad range of folks looking at your website or checking out your business. Maybe you pulled them in with a Google Ad or an Instagram post.

A colleague or association member may have recommended you to them. Or maybe they received a cold call from one of your highly talented sales reps offering to help solve one of their many business problems.

Regardless of how you got their attention, they now have an awareness that you exist, and this accomplishment alone should make you proud.

Interest

Awareness of your company may be as far as some of those potential customers get, though. They know you exist, but don’t have a need or even an interest in your product or service right now. The sales funnel narrows at this point.

Those that do have an interest in your products move further down the sales funnel. They start looking around, gathering more information about your products, services, and brand identity.

You might think that this is where you should swoop in and give them the hard-sell before they lose interest or move on to a competitor’s product. In fact, you’ll want to move them to another layer in the funnel gently.

Here is where you need to start a conversation with them. Show these potential customers that you know a little about their pain points–the challenges or problems they have that you can solve.

Notice how this can apply to anything from a software solution to this season’s sweater top. For example: Approaching a customer looking at a table full of the latest fashion, you would let them know what the current color and style trend is. Ask them if it’s a color they think looks good on them.

If not, then, you let them know you have another color in a different style on this table over here, and would they like you to find their size and put it in a fitting room?

The process differs only slightly with a B2B interaction. As a sales professional, you understand that there is growing frustration in your prospect’s industry in regards to the speed of software systems when handling large database queries, as the amount of data tracked and analyzed continues to skyrocket at an exponential scale. Is this a problem with which they are acquainted?

You have a specific data analysis package that addresses that exact issue. Can you give them just a brief overview and then schedule another time for a more in-depth conversation regarding its applicability to their situation?

You can now position yourself as a knowledgeable guide. Show your prospect how your products and services solve the problem at hand.

Now your sales funnel gets a little narrower again. They either believe your solution, be it the green sweater or the data analysis software package. Or, it’s the end of the road for them.Decision

It’s decision time. Your potential customer may be considering his options. She may be researching competitors’ products.

Now, this is the time to swoop in with a strong call to action and a value proposition – free shipping, an extended technical support period, buy three get one free. Arm your customers with whatever information they need to make that final decision, and ask for the sale.

Action

Bottom of the funnel. Here is where your customer buys your product or service. They may have purchased what you are selling, but now you want to create customer loyalty as well as referrals for continued customer growth.

Take action by thanking them, offering them continued support, or requesting feedback on how you did–all to bring them back for more purchases or referrals to create more leads.

So, wait, is the lead at the top of the funnel, or is that what they turn into once they move down through it?

Prospects

A prospect may or may not know about your business or product yet. Prospects have not initiated any contact with you or your company, but based on your knowledge, you think they may have a problem you can solve. Prospects are at the broadest part of the funnel.

Leads

Now, the challenge is, how do you qualify this prospect to make them a lead? Qualifying a sales lead is where your genius sales team comes into play.

Your salesforce can strike up conversations with these contacts, to determine whether your product is the right solution to their problem or if they even have a problem.

You can also outsource this piece of the funnel. Organizations like Volkart May specialize in helping medical technology, and B2B companies connect to company decision-makers.

That way, your sales team becomes more efficient at their jobs by focusing on closing the sale.

Moving Through the Funnel

Regardless of whether your organization refers to potential customers as leads or prospects, your job is to move them down the funnel as quickly and efficiently as possible.

Make sure you are talking to a decision-maker, and that they have a problem you can solve. Show them how you can solve it, and then help them understand your products are the most valuable solution. Turn those prospects into leads, and those leads into satisfied repeat customers.