Prospect vs lead: how do you differentiate between the two?

While these terms often get tossed around interchangeably, they represent different types of potential customers. Mixing them up can lead to confusion and missed deals, especially if your business has a more complex sales cycle.

But don’t worry — we’re here to help you out!

In this article, we’ll explore the key differences between sales leads and prospects. We’ll then check out how they relate to sales opportunities and uncover strategies to convert leads and close more deals.

Ready to unlock the secrets to maximizing your sales potential?

Let’s get started.

Prospect vs Lead: What Is the Difference?

The terms prospect and lead represent distinct phases of a sales funnel. Here’s an overview of what differentiates a sales lead from a sales prospect stage:

What Is a Sales Lead?

A sales lead is a person (or company) who could potentially make a purchase from you. They sit at the top of the sales funnel. As such, generating leads marks the beginning of your sales journey.

However, at this stage, your leads aren’t qualified, which means not all of them will be viable enough to convert into paying customers. A lead or potential prospect who engages with your marketing content in some way will be termed as a marketing qualified lead.

There are different types of leads you may come across. Here are a few examples:

1. People who engaged with your websites (page views, blog visits)
2. People who subscribed to your email newsletter (email marketing)
3. People who engage with you on your social media accounts
4. People who approach you through customer referrals
5. People who attended your webinar and expressed interest in your offerings
6. Leads purchased from third-party websites like Zoom Info and Apollo
7. Outbound leads (companies or contacts) that you perceive to be a good fit and reach out to proactively before they show interest

What Is a Sales Prospect?

A prospect is someone who’s making their way through your sales funnel. A qualified lead is classified as a ‘contact’ in Salesforce. However, sales reps typically refer to all qualified leads as prospects to one another in their forecast meetings, 1:1 meetings, and so on. 

These contacts or prospects are interested in your product and could benefit from it. While a prospect might be interested in your brand, they might not have explicitly expressed interest in purchasing from you. 

To qualify a lead into a prospect, you must interact with them and determine if they match your ideal customer profile (ICP) and if there is a potential product fit with their business needs and requirements.

An example of a typical prospect or a sales qualified lead is someone you had (or set up) a meeting with and have information on, and you believe they are a good fit. 

Now that we’ve sorted the prospect vs lead situation, it’s time to move further down the sales funnel and take a closer look at sales opportunities.

What Is a Sales Opportunity and How Does It Differ From a Prospect or Lead?

Depending on whether your target audience is B2C or B2B, the definition of a sales opportunity may differ.

In a B2B scenario, an opportunity typically refers to a company qualified as a potential customer after an initial discovery call/conversation. The prospect is your main point of contact at this company. Sometimes, there will be multiple prospects within one opportunity or organization.

Meanwhile, in B2C scenarios, a sales opportunity is a qualified prospect deemed highly likely to convert into a paying customer. 

Your ideal customer should match your target buyer persona and have a pain point you can address precisely to qualify them as an opportunity. A qualified prospect will be interested in tackling their pain point with your offering.

Some organizations refer to a sales opportunity as a sales accepted lead (SAL). Since a sales opportunity has moved further down the sales funnel, the probability of it converting to a paying customer is high. 

But how do you finally convert your sales opportunity into a closed deal?

Your sales team will need to adopt proactive lead nurturing strategies.

Examples of sales opportunities include:

1. Someone who has experienced a demo of your products or services
2. Someone who started a free trial
3. Someone who expressed an interest in a specific product and has the authority to make a purchase decision
4. Someone who has had a meeting or sales call to discuss their requirements in greater detail and has been qualified by your sales team
5. Someone who has shared a timeline for making their decision

And that’s it! You now understand the difference between leads, prospects, and sales opportunities.

But then, you must be wondering:

Why does all this matter?

Let’s answer that for you.

Why Should You Know the Difference Between Leads, Prospects, and Sales Opportunities?

Keeping tabs on your lead vs prospect vs opportunities is like having a map for your sales journey. It helps your sales team have better pipeline visibility, identify a potential customer, and channel their efforts into converting them. 

By not wasting time on someone who does not match your buyer persona, your sales team can efficiently use their energy, time, and resources to close more deals with targeted sales prospecting.

Tracking the different stages also helps streamline your sales pipeline management and organize your sales processes. When your team knows where each contact stands, they can make the right moves at the right time to convert those contacts into customers. 

Additionally, a clear distinction between leads, prospects, and sales opportunities can help you streamline the delegation of responsibilities. For instance, you might want different teams or salespeople to handle a lead vs prospect and opportunities based on their unique capabilities.

In some companies, entry-level salespeople or Sales Development Representatives (SDRs) are solely responsible for tracking leads and scheduling meetings for Account Executives. The Account Executives are then tasked with qualifying leads and turning them into opportunities. 

Note: You shouldn't necessarily ignore leads. Instead, implement a different strategy for interacting with them than engaging with prospects/opportunities.

Okay… Now, what are the best practices for converting your leads into sales opportunities?

3 Best Practices for Converting Leads into Sales Opportunities

While not all leads will immediately commit to a purchase decision, those who do will evolve into sales opportunities.

Now, here are the best practices for converting your leads into sales opportunities through sales prospecting:

1. Identify Pain Points: Understand the lead's specific need or pain point and align it with your offerings. Even qualified leads may not openly discuss their pain points, requiring adept questioning and relationship-building.
2. Assess Interest: Assess genuine interest in resolving the issue. Persistent problems may seem manageable, but expressions of struggle indicate genuine interest. Gauge interest levels with targeted questions.
3. Evaluate Your Leads: Evaluate if the lead aligns with your solution. Assess whether you can genuinely deliver results and if there's a match between your business and the opportunity. Stick to the leads your business is designed to serve.
   

So, how do you finally convert your leads into sales opportunities or paying customers?

5 Techniques for Converting Leads into Sales Opportunities

Once you have a lead who might be interested in your offerings and seems like a good fit, it’s time to implement the right sales prospecting strategies to convert them into a sales opportunity. 

Here are a few smart tips that can help you nudge your leads further down the sales funnel and turn them into paying customers:

1. Devise a Lead Scoring System

First, your sales and marketing team must target the right candidates. Lead scoring can help you identify these candidates. 

Lead scoring is about determining, based on certain characteristics, how likely a lead is to actually make a purchase. You can perform lead scoring manually or use a specialized tool to simplify the process.

Ask yourself the following questions:

1. Is this person interested in what we're selling?
2. Do they need our product?
3. Can they afford it?
4. Is now the right time for them to buy?
5. Are they the ones who make the decisions for their company? (especially for B2B clients)
   

The leads that fit the bill are the ones worth pursuing. Even if a lead does not satisfy all your eligibility criteria, you should still try to take a crack at it.

2. Embrace the Power of Discounts and Giveaways

Offering giveaways or product discounts is a smart strategy for attracting interest in your products and services and converting a lead into a paying customer.

The giveaway doesn't have to be huge or expensive; it should just remind them of your company.

Interestingly, giveaways aren't just about turning leads into sales. They can also help you figure out what really grabs people's attention about your brand. 

With the info you gather, you can fine-tune your messages and offers to turn those leads into even more sales. For example, personalize your emails and make it seem like the discount is just for them. You can also create a special coupon code exclusively for your email subscribers.

3. Follow Up Proactively

Consistent follow-ups are crucial for turning leads into customers. A quick email or phone call to see if your potential client has any questions can kickstart the whole conversion process.

But here's the thing: one follow-up might not cut it. A study indicates that nearly 80% of potential opportunities are lost due to a lack of follow-ups. 

The same study states that only one in 50 deals are closed with a single follow-up. Also, about 80% of sales need at least five touch points after the first contact to close a sale.

And that’s not all! You need to respond quickly to any queries your leads may have. Also, ensure that you resolve their issues fast before they consider your competitors' solutions.

4. Nurture Your Leads

Lead nurturing is all about building connections with your leads and keeping the momentum throughout the sales journey. According to a recent study by Marketo, solid lead nurturing campaigns can boost conversions by up to 50%.

So, how do you nurture your leads?
Consider the personalized sales approach!

For example, emails, SMSs, and social media DMs are great for personalized communication with your leads. That’s because you're not just shooting off generic messages into the void; you're addressing your leads by name and speaking to their interests. With every message, you pique their interest and give them more reason to decide.

And that’s not all. Emails can help you gather data about your potential customers’ needs and expectations. After seeing what gets leads to open and click your emails, you can use that info to tailor your marketing campaigns. And if a lead starts to go cold, you can even bring them back into the fold with targeted ads.

5. Leverage the Right CRM Add-On

Maintaining clean and up-to-date data (such as contact information), tracking your leads accurately, and ensuring data consistency across systems are key to streamlining your lead conversion process.

A CRM solution like Salesforce can assist you with better pipeline management, marketing automation, lead tracking, timely follow-ups, and streamlined communication. This ensures that no opportunities are missed and that prospects transition through the sales funnel more swiftly.

However, a traditional CRM might not offer all the sales capabilities you seek.

Why?

Because traditional CRMs can be complex and inefficient for your sales and marketing team — resulting in inconsistent data entry and compelling reps to rely on manual, cumbersome spreadsheets.

What’s the solution, then?

A CRM add-on like Scratchpad. This tool simplifies the sales process and eliminates the inadequacies of your CRM.

Optimize Your Sales Pipeline With Scratchpad

Scratchpad is the only Salesforce add-on you need to maintain an organized and visually intuitive sales pipeline without overhauling your existing practices.

‍

‍

Here are some of Scratchpad’s impressive capabilities that can help you streamline and simplify lead qualification and other sales processes:

• AI Sales Assistant: Actively monitor your virtual sales calls, autonomously update Salesforce with crucial details (MEDDIC), generate easily shareable sales call summaries, and transform conversations into valuable insights. 
• Unified Sales Workspace: Combine sales notes, tasks, Kanban boards, and more in one place — offering a sales rep or sales manager a centralized hub for managing all prospecting activities.
• Unified Deal Tracking: With Rollups, you can effortlessly consolidate scattered sales data into a cohesive overview, eliminating the need for complex spreadsheets.
• Zero Boards: Daily to-do lists so that a sales rep remembers to follow up on leads and opportunities in the pipeline and leaders get better visibility and context into deals at risk.
• Deal Spotlights: Conditional Highlighting and Deal Spotlights allow leaders and reps to inspect entire pipelines in one place and spot gaps or missing information in a certain deal at a glance. 
• Command: A simple shortcut for you to search and update any Salesforce field from anywhere on the web.
• Deal Rooms: Automatically create and manage Deal Rooms in Slack for better collaboration and visibility into all aspects of your deals at each stage, ensuring a faster sales cycle, smoother handoffs, and a better customer journey.
• No-Code Automations: Update Salesforce faster and get insights into gaps in your open pipeline.

Before we wrap up, let’s tackle a few other questions you might have about leads and prospects.

3 FAQs About Prospect and Leads

Let’s examine some finer details, such as the lead qualification framework, lead generation, and more. 

1. What is a Lead Qualification Framework?

A lead qualification framework is a structured set of criteria for evaluating and categorizing leads based on their likelihood of becoming paying customers. It helps sales teams prioritize their efforts by focusing on leads most likely to convert. 

Typically, a lead qualification framework includes various factors such as demographics, behavior, engagement level, budget, timeline, and fit with your ideal customer profile. 

The framework often involves a series of qualifying questions or assessments to determine if a lead meets the criteria to advance through the sales funnel. It guides your sales reps to streamline the lead qualification process and allocate resources efficiently.

Some of the common lead qualification frameworks that sales teams often use to identify a potential client include:

1. BANT (Budget, Authority, Need and Timeline)
2. MEDDIC (Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain and Champion)
3. MEDDPICC (Metrics, Economic Buyer, Decision Criteria, Decision Process, Paper Process, Identify Pain, Champion and Competition)
4. FAINT (Funding, Authority, Interest, Need and Timing)
5. ANUM (Authority, Need, Urgency and Money)

2. What Is Lead Generation?

Lead generation is the process of attracting and capturing potential customers for your products or services. It involves various marketing strategies (such as outbound marketing, inbound marketing, and demand generation) to generate consumer interest and gather contact information for further engagement. 

Generating leads through inbound marketing entails reaching out to your target audience through content marketing, social media marketing, email marketing, and digital marketing. On the other hand, you can also generate leads using outbound marketing tactics such as advertising, trade shows, and cold calling. The ultimate goal of lead generation is to build a pool of qualified leads that you can nurture and convert into paying customers.

3. What Is the Difference Between a Sales Qualified Lead (SQL) and a Marketing Qualified Lead (MQL)?

MQLs and SQLs represent different stages in the lead qualification process. MQLs are leads that have shown interest in a company's products or services based on their interactions with marketing efforts. 

While MQLs have shown some interest, they have not yet been vetted by the sales team and may require further qualification to determine whether they are a good fit for your offerings.

Meanwhile, SQLs are leads thoroughly vetted and identified as ready for direct sales engagement. These leads have met specific criteria set by both marketing and sales, such as budget, authority, need, and timeline (BANT). 

SQLs represent a higher level of interest or intent to purchase and are considered more likely to convert into paying customers. As they have shown a readiness to engage in the sales process, they are passed on to the sales team for further nurturing and conversion.

Note: An IQL or information qualified lead is at the very beginning of their research process and often considered as a cold lead. An information qualified lead will share their contact information in exchange for information about your product offerings, primarily a downloadable asset. An IQL may not move to the next stage after receiving the initial information about your business.

Embrace Sales AI and Say Goodbye to Missed Opportunities 

Understanding the differences between a lead, a prospect, and an opportunity is key to mastering your sales pipeline. 

But what’s more exciting is that innovative sales AI tools like Scratchpad help you effortlessly track and manage every stage of your pipeline. This ensures no potential sale slips through the cracks. 

So why settle for anything less? 

Take control of your sales process, boost your efficiency, and close more deals than ever before with Scratchpad.

‍Try it for free today!