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In sales, terminology sets the framework for how we do business. The terms “lead,” “prospect,” and “opportunity” can often be used interchangeably, but they are not the same. In order to better communicate with the people you’re selling to and prioritize your efforts, you need to correctly identify which of the three they are as well as where they are in the sales pipeline.
These two terms are often confused with each other. A lead enters your pipeline in the first stage of your sales process and represents anybody who fits your ideal customer profile with available contact details, but hasn’t been contacted by you or your sales team. Then, and a lead becomes a prospect when you confirm the person has an interest in your product or service and is therefore worthy of further nurturing. In other words, they’ve shown that they are “sellable.”
Here are the ways you can confirm sellability and turn a lead into a prospect:
Each of these interactions signifies buy-intent, which means you can now mark a lead as a prospect and move them from the lead generation stage to the first stage of your lead nurturing process, often a discovery call. This distinction is important to note because you should only invest time nurturing a prospect if they have shown intent to buy.
However, it’s also important to note that some of this terminology is fluid. For example, leads can be broken down into multiple lead types, which we discuss below. Sometimes, a top-of-funnel lead is referred to as a marketing qualified lead (MQL), whereas a prospect that has shown some level of sellability is referred to as a sales assisted lead (SAL).
While a prospect is anybody who’s demonstrated interest in your product or service, an opportunity is someone who’s actually been qualified directly by the salesperson and shown high probability of closing. Typically, this is done over a discovery call where a salesperson will ask specific questions to determine things like budget, authority, need, and timeline. Those with high intent to buy are marked as opportunities in your sales pipeline and moved into later lead nurturing stages.
Just like the lead-to-prospect change, this can happen in a few different ways:
Each of these show an opportunity to make a sale, and so the prospect is now considered a sales opportunity. The importance of this transition is that sales opportunities will hold the highest priority of the three, and noting this will help you pay proper attention to the people most likely to convert.
Again, some of this terminology can be fluid and is often dependent on the sales organization. For example, a sales opportunity can sometimes be considered a sales qualified lead (SQL), which we discuss in further detail below.
A lead is anybody who fits your ideal customer persona and has either given you their contact information through inbound lead generation or has it publicly available for direct outreach. However, there are typically multiple types of leads that help you segment your sales pipeline to follow up with the most important contacts. To make the most out of each lead, it’s important to know which of these types of lead they are:
Typically, you’ll move a lead through each stage of this lead funnel through lead scoring and lead qualification methods. Usually, marketing qualified leads will be scored by the marketing team and passed to the sales team if they meet a certain threshold. Then, sales leads will be qualified by the sales team through direct interactions like a discovery call.
Marketing qualified leads are leads who have demographics that fit your ideal customer profile and have also taken a behavioral action that signals interest in your product or service. To do this, you’ll typically create an ideal buyer persona and require a lead to meet a certain number of demographic data points. Then, you’ll score leads based on behavioral interactions like an email subscription or free download.
Usually, inbound leads are considered MQLs because they have already taken a behavioral action like signing up for your email list. With these leads, the goal is to convert curiosity into interest so they are already warm when a salesperson reaches out to them.
Sales assisted leads are leads that have been contacted by a salesperson and responded with interest, typically over an email. Usually, this happens when a marketing qualified lead provides their contact details, and then a salesperson follows up to see if they’d like more information about their product or service. However, a lead can also be a SAL if they’ve been contacted directly by a salesperson through outbound lead generation efforts like a cold email and responded with interest.
Sales qualified leads are leads that have been qualified by a salesperson through a discovery call. The salesperson uses the discovery call to confirm the lead is a good fit by asking them questions that verify budget, timeline, and decision-making power. As a result, you already know their timeframe and reason for considering a purchase.
However, this step can be somewhat interchangeable. Some industries can close with the email alone, whereas others will want to get some commitment over the phone, then send an email to clarify next steps. A sense of urgency is generated by offering a timeframe of opportunity, and that is the best way to generate immediate interest in making a purchase.
A cold lead is a lead that hasn’t been qualified yet. Nobody associated with your business has contacted them, so you’ll be the first one to make contact if you do. These are the toughest leads to deal with, as they haven’t been introduced to the idea of your product, and you don’t know if they are even in the market.
Bad leads are names on your list that don’t have proper contact info, or the information is outdated. The reason we want to properly identify a “bad lead” is because you’ll hear a lot of excuses regarding them. If a lead isn’t interested, asks a lot of questions, or is a little rude over the phone, they aren’t a “bad lead.” Unless the contact information on your lead is outright wrong, you should pursue them with the same tenacity as any other.
If you really are dealing with a lot of bad leads, consider using an email lookup tool or a Google search to find contact information for that lead. We detail how to do this in our article on how to find prospect email addresses, so check that out for specifics.
A prospect is a lead that has responded positively to direct contact from a salesperson, usually through an email or short call. Prospects can also sometimes be considered sales assisted leads (SAL) because initial contact from the sales team has been made, but they’ve been unable to fully assess fit.
Marking a lead as a prospect represents a shift from the lead generation stage to the lead nurturing stage of your sales process. This means you can confidently spend more time reaching out and nurturing the prospect because they’ve been qualified by both the marketing team and the sales team.
A sales opportunity is a prospect that has shown significant interested in making a purchase and has a high degree of fit. This is usually determined over a lengthier discovery call where a salesperson connects with the prospect directly and assesses their needs. Those with a high likelihood as well as ability to purchase are marked as opportunities in your CRM software as they continue to move down your sales pipeline.
These are your highest priority leads, and they show the highest odds of converting. Since their level of interest is highest, nearly every piece of correspondence will come with an offer to close at this point. While being over-aggressive for a close near the beginning of the process can be off-putting, opportunities have given you ample reason to be reaching out more often with an offer to get things handled.
Of course, some organizations refer to a sales opportunity as a sales qualified lead (SQL). However, the criteria for becoming either a sales opportunity or an SQL is the most scrutinized and requires direct outreach through a discovery call or something similar.
One of the ways to improve your conversion is to score your leads. Lead scoring is the practice of giving each lead a point-based score that takes into account how likely they are to make a purchase. The factors considered typically include:
Once you’ve decided what factors you want to score, you’ll want to assign point values to each. You can even set a point threshold to create a tier list for leads that dictate how aggressively you contact them. The factors listed here are the most common to include, so we’ll get into a little more detail on how they increase the likelihood of a sale, and how you can score them.
Demographic details like age, sex, occupation, etc. that match your target demographic are the first scored items on the list. Since you are targeting your marketing, and your product, to fit these details, leads that fit the bill should be scored higher. Similarly, if you’re a B2B seller, you can score company details like number of employees, reported revenue, and industry.
Typically with demographic details, you’re going to assign each detail a single point. Sometimes, you may want to make their occupation or industry worth two points since it gives them a reason to buy your product. Then, you’ll decide on the number of points that a lead will need to be considered “qualified,” justifying proactive contact from your sales team.
Whenever a lead engages with your company, they are showing specific interest in what you have to offer. As a result, you’ll want to score behaviors like this a little higher than just being the right age or having the right job. High-scoring engagement usually looks like the following:
Instead of just giving a single point, you may want to give a lead two-to-five points depending on the type of interaction. This will be added to the points given for demographic/company details. We listed them in order of how you should score them, with a Facebook “Like” being the least noteworthy, and an inbound call being the most.
Online behavior is anything you can see the lead has done that signals interest in your product, or similar ones. Depending on your industry, this can look a little different, and hold more or less weight in your scoring system. Think something like:
Each of these can mean a lot for some industries, and not as much for others. While they aren’t high-score actions, they are noteworthy one-to-two-point items in many different sales situations. Give negative point values to behaviors that seem like spam (the lead fills out forms in a suspicious way, sends spam-like email correspondence, or anything else that hints that direction).
Add these points to the total with from the other two categories, and check if the lead’s score meets your chosen qualification threshold.
We’ve outlined some first steps when handling certain leads and prospects, but now is the time to take you step-by-step through the lead generation process of converting a lead into a prospect, and then into an opportunity. The steps are as follows:
This three-step process is the basic formula for progressing through both of these transitions. The steps are specific enough to determine what your goal is with each contact, but broad enough to ensure that you can customize them to fit your industry. Let’s take a closer look at each.
The goal with your initial contact is simple: qualify your lead’s interest and ability to purchase your product. We need to figure out if they are just poking around, if they are genuinely curious about the product, or if they are already considering a purchase. This can be done over discovery call if you haven’t had one yet, or a needs assessment via email or phone you have.
The way we do this is by asking questions. After you get your greeting out of the way, you should have a script including some basic qualification questions. You can include as many as you’d like, but remember to frontload the important ones in case you can’t keep your lead on the phone. Consider questions like these:
Each of these serves its own purpose, and they can help inform the rest of the process. Asking all of them will get you all of the necessary information to mark them as a sales opportunity. You know how they heard about you, what they liked, how well they know the market, and when they would like to buy.
Not only can these questions help with the lead on the phone, they can also help you refine your marketing strategy. By asking each client where and how they learned about your product, you can identify strong points in your marketing campaign and invest more in them.
Now that we have a prospect, we want to set defined dates for discussing the sale further. So, at the end of your qualification call, always offer a range of dates and times for a follow-up appointment. While asking what time is good for them can work out okay in some instances, it’s better to make a direct offer, like these:
If the prospect doesn’t agree to a set follow-up appointment time, we want to make sure we are following up proactively. This process can differ between industries, but generally, you’ll be sending an email at least every other day. In addition, you’ll want to be calling the prospect just as frequently. Typically, you’ll do both in tandem, and stop after three-to-five failed attempts.
The goal with all of your follow-up correspondence is to get commitment from a prospect. This is the best way to upgrade a prospect into the best sales opportunity. What we mean by getting a commitment is that we want to know exactly what it would take for the prospect to buy our product. This means asking for a few details:
Basically, if you have at least two of these pieces of information from your prospect, they have officially become a sales opportunity. Getting the customer to share these answers with you gives you the green light to pursue them a little more aggressively, as we discussed above. Send them emails that clarify next steps to make a purchase within their timeframe, call to remind them, and keep them aware of any promotions that you are offering every time they come up.
While the terminology may not seem that serious, we hope this article makes clear how and why you should label people in your pipeline. Each term should invoke a different response, and represent a different part of your sales process. Once you properly identify leads, prospects, and opportunities, you will have a much easier go at organizing your lead generation and nurturing efforts.