What is a Lead vs Prospect vs Opportunity?

Learn the differences between a lead vs prospect vs sales opportunity, as well as how to attract and nurture each, in our handy guide.

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.

Lead vs Prospect: What’s the Difference?

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:

  • Receiving an email response from a lead requesting more information
  • Receiving an inquiry for a free trial or demo of your product
  • Importing a lead to your pipeline that has been qualified through a third party, sometimes by your marketing department

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).

Prospect vs Opportunity: What’s the Difference?

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:

  • The prospect says they want to make a purchase
  • The prospect says they have a specific need that the product could fill
  • A follow-up appointment is made between you and the prospect
  • A prospect comes into the office or makes inbound contact after the call

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.

What Is a Lead?

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:

  • Marketing Qualified Lead (MQL): A lead that the marketing team has identified as potentially sellable due to demographic and behavioral characteristics.
  • Sales Assisted Lead (SAL): A lead that has been reached out to by the sales team and responded positively, typically over email.
  • Sales Qualified Lead (SQL): A lead that has gone through a discovery call with a salesperson and has been verified as a good fit for the product.
  • Cold Lead: A lead in your sales pipeline that has not been qualified by the marketing team or reached out to by the sales team.
  • Bad Lead: A lead in your pipeline with incorrect, outdated, or otherwise inaccessible contact information.

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 Lead (MQL)

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 Lead (SAL)

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 Lead (SQL)

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.

Cold Lead

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 Lead

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.

What Is a Prospect?

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.

What Is a Sales Opportunity?

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.

How to Score Leads for Efficient Selling

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:

  • Demographic/Company Details: Check the lead’s age, sex, occupation, and interests to see if they align with your ideal customer profile.
  • Engagement With Your Company: Score any behaviors that serve as a positive response to your business.
  • Online Behavior: Score things such as liking your social media pages or pages similar to yours, or posting in groups related to your industry.

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.

Review Demographic & Company Details

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.

  • Come Up With an Ideal Customer Profile: Use a tool like HubSpot’s Make My Persona to decide on a target demographic.
  • Identify Desirable Demographic Details: Use your ideal customer profile to decide what demographic details you’re looking for.
  • Assign Points to Each Detail: Assign point values to each demographic detail that fits your customer profile.
  • Set a Threshold For Qualification: Figure out a point threshold that makes a lead “qualified.”

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.

Score Engagement With Your Company

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:

  • Interacting on social media
  • Signing up for a newsletter
  • Responding to an email
  • Filling out an online form
  • Making an inbound call

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.

Track Their Online Behavior

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:

  • Liking pages for businesses similar to yours
  • Posting in groups related to your industry
  • Personal connection with people in your company

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.

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Additional Reading:

For more information on lead scoring, and how best to get it done, check out our guide on lead scoring. In it, we lay out the entire process and offer some helpful examples.

How to Turn a Lead Into a Prospect

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:

  • Qualify on First Contact: Gauge their interest in purchasing the first time you get them on the phone by asking pointed questions about why they engaged with you.
  • Set Follow-up Appointments: Close your first contact with a call to set up a follow-up meeting or call.
  • Get a Commitment: Get the prospect to lay out their ideal deal, and figure out what it would take for them to make a purchase.

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.

1. Qualify on First Contact

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:

  • Where did you hear about us?
  • Which of our products caught your eye?
  • Have you already bought or shopped for a product like ours?
  • When were you looking to make a purchase?

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.

Pro Tip:

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.

2. Follow Up & Set Appointments

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:

  • “Before we hop off the phone, I’ve got time at 3 p.m. tomorrow to give you a run-down on our process. Can I put you down for that slot?”
  • “I understand you don’t have the time to get too deep here, can we set an appointment between 1 p.m. and 3 p.m. sometime this week to talk more?”

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.

3. Get a Commitment

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:

  • How much of the product would they need?
  • When would they need it?
  • What price would they need to get a deal done (if price is negotiable)?
  • Why would they be buying it?

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.

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Additional Reading:

If you want a deeper dive on the lead qualification process, check out our ultimate guide on lead qualification. There, you’ll find a step-by-step process to follow, along with some helpful tips and examples for reference.

Bottom Line: Lead vs Prospect

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.

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