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What is the Difference Between Sales Leads and Prospects?
In sales-and marketing-related articles, the words “sales lead” and “prospect” are often used as synonyms, but, in reality, they describe different things. Moreover, not all sales and marketing people agree on what counts as a “sales lead” and what doesn’t. To clarify the difference between sales leads and prospects, we went through various sources, looked into multiple definitions and finally came up with an explanation.
Starting with the sales process in mind
While talking about sales leads and prospects, we must think about our sales process first. Usually, it starts with the identification of people and organizations who may be interested in your product. Then, the selection of customer acquisition channels.
There are many different ways how to acquire clients, and we won’t go further into this now, but, let’s say, that you’ve used several channels, everything worked out fine, and now you have a bunch of people who are interested in your product. What do you call them? Are they sales leads or prospects?
Various sources = different definitions
We checked several sources for business terminology to look for the definition and, apparently, there’s no single explanation of what is a “sales lead” and what is a “prospect.” Different sources offer different definitions. Here are some examples:
- Business Dictionary describes a sales lead as an “inquiry, referral, or other information, obtained through advertisements or other means, that identifies a potential customer (prospect).” A prospect, according to Business Dictionary is “a potential customer or client qualified by his or her buying authority, financial capacity, and willingness to buy.”
- Investopedia claims that a “sales lead” is not a “sales prospect” but gives no separate explanation to what a prospect means. According to Investopedia, “a sales lead is a prospective consumer of a product or service, created when an individual or business shows interest and provides contact information.”
- According to HubSpot, “prospecting is the process of searching for potential customers, clients, or buyers (they are called prospects) in order to develop new business.” Leads become prospects if they are qualified as potential customers.
- The Balance claims that a “prospect” is a potential customer that has been qualified as fitting certain criteria.” A lead, according to them, is an unqualified contact.
There are many different opinions and different explanations, but despite this, a certain pattern can be distinguished.
Our research showed that the vital point in learning the difference between sales leads and prospects is to understand what happens once you identify your potential client:
- If your potential client shows interest and provides you with contact information – he or she is a sales lead.
- If you gather this contact information via advertising or other means – your potential client is a sales lead.
- If you then go further and qualify this potential client – he or she is a prospect.
What is a sales lead?
Sales leads are potential clients who have expressed interest in your product or service. If you’ve identified and obtained information about your potential clients by other means, you could call them sales leads too.
What is a prospect?
Sales leads turn into prospects when they are qualified, meaning that they meet certain criteria and align with your target buyer persona.
In short, you get leads first, qualify them into prospects, and then move them further through your sales funnel.
Sales lead, marketing lead, suspect
If you’re working in sales or marketing, then it’s important to learn this fundamental difference between a sales lead and a prospect and to know that some other definitions can also be used.
For example, the term “marketing lead” is used to describe the outcome of a marketing campaign with the purpose of acquiring information about potential clients.
Also, instead of trying to figure out the difference between sales leads and prospects, some companies use such terms as “marketing-qualified lead” and “sales-qualified lead.”
A marketing-qualified lead is, for instance, a person who has shown some interest in the service or product but isn’t planning to make a purchase soon.
A sales-qualified lead is a person who is interested in buying right now.
Some sales experts go even further and avoid the term “sales lead” altogether and prefer “a suspect” instead. According to the Balance, a suspect is someone you’ve just seen on your lead list and haven’t called yet.
Do you agree with our explanation? How would you describe a sales lead and a prospect?