Understanding the Difference Between a Prospect, Lead & Opportunity
In the sales world, there’s a lot of jargon that can cause confusion. Among this list of terms are the labels sales teams put on potential clients—prospect, lead and opportunity. It seems like these definitions would be straightforward, but they’re hidden behind clouds of doubt.
The reason for the confusion between lead vs. prospect vs. opportunity has to do with the terms being deeply ingrained in business processes leading to company specific definitions. This becomes a problem when no one can agree on what these terms mean.
We’re to here to clear up the differences and get everybody on the same page. Laid out below are the definitions of a lead, prospect and opportunity, including the nitty gritty details of what these people mean to your business and how to handle them.
Figuring Out What a Lead Is
Let’s talk about leads. The easiest way to understand leads is to think about them in terms of journalism. If you’re writing for a newspaper and need a great story for the front page, what do you go looking for? That’s right—leads.
A lead is something that will hopefully bring you to a great story or in business terms, a great sale. Leads can be generated through a variety of methods:
- Through a list you’ve either created or bought.
- Through client’s referrals.
- Through people who respond to your cold calling or emails.
- Through inbound advertising.
What you should remember when it comes to leads is that they are people who have shown interest, but don’t necessarily want to proceed. Leads are the first label that potential customers receive at the very beginning of the sales process.
Understanding the Role of a Prospect
That brings up to prospects. If a lead is someone who has shown interest in your product, then a prospect is someone who is ready to proceed. This doesn’t mean that a prospect is ready to hand you over their money, it just means they’re interested in hearing what you have to say.
Continuing with our journalism metaphor, prospects are like tips that you get from a lead. It’s not a front page story, but it’s an exciting chance to continue the conversation. Prospects haven’t agreed to consider anything yet, but they also haven’t said no.
Knowing an Opportunity When You See One
The last step before a potential customer becomes a paying customer is opportunity. Opportunities have heard what you’ve had to say and are ready for more. When a person transitions from prospect to opportunity, be prepared to flex your sales muscles to seal the deal.
An opportunity wants to know their options and all the details of what you’re selling them. If you were a journalist, this would be the time to pitch your story. Landing the front page spot is still not guaranteed with an opportunity, but you’re pretty close.
Wrapping Things Up
Now that we’ve cleared up some of the confusion surrounding these commonly used terms, the sales process should get a whole lot easier. If you’re still confused, look at it like this:
- Leads – People you’ve never talked to before, names off a list, referrals or people who’ve contacted you.
- Prospect – A lead who said yes! They’re interested in hearing more about what you have to say.
- Opportunity – A prospect who is considering your solution and is open to hearing your sales pitch. This is the stage where they either buy or say bye.
Lead vs. prospect vs. opportunity—it’s as simple as that. With a firm grasp of sales world jargon, you’re ready to get out there and turn your potential customers into paying ones!