Lead vs Prospect: Key Differences and How to Target Qualified Prospects
You may have already been told that you need a lot of leads for your business. Others may have advised you to focus on prospects, as these are the people most likely to buy from you. This can leave you wondering: What’s the difference between a lead and a prospect?
The Difference Between a Lead and a Prospect
When discussing leads and prospects, the two terms might seem quite similar. However, the difference lies in the likelihood of purchase. While a lead is someone who has interacted with your business in a minimal and one-directional manner, a prospect, on the other hand, has engaged in two-way communication or shown more interest, indicating a higher likelihood of becoming a customer.
What Is a Lead?
A lead represents a potential customer who could eventually become a loyal and satisfied client, but there is also the possibility that this person may never make a purchase or engage with your business.
What Is a Prospect?
A prospect is a lead who has shown genuine interest in your products or services. They have engaged with you meaningfully and match the profile of your target customer.
A prospect has noticed your business and wants to learn more. They are ready to actively engage with you, so it’s important to establish marketing systems that guide these prospects through your sales funnel until they become customers.
Leads vs. Prospects: Which Is Better?
Prospects are like passersby—people who may show some interest but haven’t actively engaged with your business. Leads, on the other hand, are like the people who enter your store—they’ve taken an initial step to engage, showing a higher level of interest and potential for becoming customers.
It’s good to capture leads for your business, but your goal should be to quickly assess these leads to determine if they can also qualify as prospects. You can then focus more energy on nurturing the prospects, as the expected benefit is higher.
Think of it this way: you might have hundreds of leads in a single quarter, but if none of them progress along the buying journey and purchase anything, that number has no value. In contrast, you may have only 15 qualified prospects during that same period, but each one is more likely to buy. In this scenario, it’s better to have 15 highly qualified prospects than 100 unqualified leads.
Not all leads are equal, and revenue growth often relies more on prospecting than lead generation in your business.
How to Target Qualified Prospects in Your Sales and Marketing Activities
Extract the Maximum Data from Every Interaction
When someone first interacts with your business, learn as much as possible about them. When a visitor signs up for your mailing list, track how they came to your site, which links they clicked, and which signup form they submitted. Record everything you can about their preferences.
Track Their Customer Journey
Pay attention to what prompted someone to join your list, as well as the next interactions you have with them. Again, the main difference between a lead and a prospect is that a lead never acts beyond that initial signup. If they continue to interact and engage through your marketing efforts, they are good candidates to qualify as prospects.
Keep Your Buyer Persona in Mind
If you sell a high-priced product or service, don’t focus your marketing efforts on people who aren’t willing to pay that price. For instance, let’s say you sell consulting sessions for €1000, online courses for €250, and eBooks for €20. If someone only buys your eBooks and never clicks on the emails promoting your courses, they’re unlikely to spend €1000 on consulting. This doesn’t mean you should stop sending them emails, but it means most of your time and energy shouldn’t be focused on these types of leads.
Similarly, if you only want to work with large companies, focus on the decision-makers at these companies. Don’t spread your efforts on solopreneurs or people working for small businesses.
Use a CRM to Optimize Your Efforts
Tracking your leads and nurturing them to become prospects can seem like a considerable effort, but a powerful CRM with sales and marketing automation can do much of the work for you.
Track Contacts at All Stages of the Sales Pipeline
If you’re looking at your mailing list and trying to sort leads from prospects, it’s time to implement tools to help you gain clarity. Many specialized software solutions allow you to define your sales pipeline, identify and track your leads at each stage of the sales funnel, and most importantly, determine who your business’s leads and prospects are so you can focus your energy on those most likely to buy your products and services.
Conclusion
Attracting customers rather than leads requires a well-defined strategy. Focus on identifying and nurturing qualified prospects to maximize your sales efforts and increase revenue. By implementing these practices and using the right tools, you’ll be better equipped to turn your leads into loyal customers.
