It’s all in the communication. Regardless of how much research you may have done on a lead or a lead’s company, a lead is defined by one-way communication. Essentially, you’ve already reached out to your lead, but they’ve yet to reply. Don’t fret—the first part of your sales funnel is always (and should be) the biggest, and most leads won’t become prospects.
Qualifying leads as prospects and identifying which prospects are worth reaching out to is the second step in the sales funnel. The greatest dropoff in the sales funnel is generally this jump from leads to prospects, as qualification considers many factors, but most importantly the probability that a lead will eventually become a customer. A prospect, by engaging with your company, has indicated a level of interest; therefore, they are considered “qualified” as likely to become a new customer.
Prospects Vs. Leads: What’s the Clear Difference? | OneIMS
What are leads?
A lead is a potential customer who may or may not fit within your target market. Some leads are prospects, while others are not. Leads have not yet been qualified as prospects. Usually, youll know less about a lead than you will about a prospect. Many salespeople still cold call or cold contact leads to learn more about them to see if they qualify as prospects in order to move them through the sales funnel.
What are prospects?
A prospect is a potential customer who meets certain target market criteria. For example, a prospect might live in the right geographical area, fit the financial profile for a customer or match some other characteristic of your primary demographic. Prospects have not yet expressed an interest in your product or service or stated they want to make a purchase—they simply meet the target market criteria.
What are opportunities?
Opportunities are potential customers who have expressed an interest in your product or service. The designation “opportunity” is often the last step before “customer” in the sales funnel or customer journey. Opportunities are often the most valuable of all three types of potential customers, because theyre the most likely to make a purchase.
How do prospects, leads and opportunities connect?
Prospects, leads and opportunities are all part of the same sales cycle. Often, salespeople begin with leads, determine that theyre prospects, move them to opportunities and finally convert them to customers.
Its important to note that not every lead is a prospect, and not every prospect starts as a lead. Some leads do not make it to the prospect stage because the lead does not meet the demographic criteria. Additionally, some prospects start in the sales cycle as prospects rather than leads if the salesperson is aware of their demographic status as it relates to the characteristics of the target market.
Types of leads
Leads come in many forms since they can be just about any consumer in the marketplace. Knowing what type of lead youre working with can help you appropriately strategize to hopefully convert that lead into a prospect, then into an opportunity and finally into a customer:
A hot lead is a type of lead thats very likely to become a prospect because they meet most, if not all, of the following criteria:
You can categorize a hot lead as a prospect and begin leading them through the sales funnel, hopefully resulting in a sale.
A warm lead is a type of lead that meets some of the criteria of a hot lead, but does not match two of the specified categories. Most often, warm leads do not have an immediate demand for your product or service, or they dont have a specific set of funds available to make an immediate purchase. Generally, warm leads have an interest in your product or service, but arent able to commit to making a purchase right away.
A cold lead is a type of lead that only meets one of the budget, authority, need and demand criteria. While theres the potential for a sale, its less likely to happen than with a warm or hot lead, particularly if the cold lead does not have purchasing authority. Still, you might find these leads worth pursuing since circumstances can change.
Information qualified lead (IQL)
An information qualified lead, or an IQL, is a type of lead who is seeking out information about a certain product or service, but has not yet made any company or purchasing decisions. Often, these leads request information online like white papers, templates or other downloadable documents for free from your company in exchange for sharing their contact information. You can use that contact information to share more information with them about the products or services your company offers in the hopes of moving them through the sales funnel.
Marketing qualified lead (MQL)
Marketing qualified leads, or MQLs, are similar to IQLs. Instead of sharing their contact information specifically in exchange for information about a product or service, though, they share their contact information in exchange for any type of marketing tool, like access to your blog, a video or an e-book. Since theyre not seeking specific information about a product or service, they may take slightly more work to convert than an IQL, but theyve still expressed an interest in your company, so theyre worthy of some attention.
Sales ready lead (SRL)
Sales ready leads, or SRLs, are really opportunities rather than leads. These are the leads that call your company and ask to speak directly to a sales representative because theyre ready to learn more about the products or services your company offers and are on their way to making a purchase.
Sales qualified lead (SQL)
Sales qualified leads, or SQLs, are IQLs or MQLs one step further down in the sales funnel. In most cases, SQLs initially learned about the company through marketing materials. After a conversation with a salesperson, theyre interested in making a decision about your product or service.
Member service request lead (MSRL)
A member service request lead, or MSRL, is a type of lead your company gets from another source, usually from some sort of lead subscription service. These services often gather information from leads interested in learning more about the options in a certain industry or market. The service then shares those leads with companies like yours who pay for the information.
Who comes first lead or prospect?
How does a lead qualify as a prospect?
Is prospecting the same as lead generation?
What is a prospective lead?