According to a study by the Content Marketing Institute (CMI), 85% of B2B companies say lead generation is their top priority, ahead of lead conversion (84%) and lead nurturing (78%). While Lead Gen is a critical component of business sales performance, it is often plagued by jargon and many approximations… such as the confusion between the concepts of ” lead ” and ” prospect ” !
More than a terminology error, this confusion impacts the lead nurturing efforts and the conversion objective, because leads and prospects have a different level of maturity and therefore require a different treatment in order to achieve the grail of conversion.
In this practical guide, Twilead offers you a practical and actionable comparison to understand the differences and nuances between the lead and the prospect. We will then detail how to treat each of these potential customers to promote conversion. Let’s go !
What is a lead?
In the world of sales and marketing, the lead, which can be translated as commercial trackA customer is an individual or organization that has expressed an initial level of interest in your company, for example by filling out a contact form to download content, interacting with your posts on social networks, subscribing to your newsletter, etc.
Sometimes, leads are qualified as ” marketing leads “, in the sense that they represent prospects that still need to be ” worked on ” by the marketing team as part of a nurturing strategy to qualify them and eventually approach them with a sales prospecting tactic.
In short, the lead is an individual or an organization that has been made aware of the existence of your company through a marketing lever (search engine, social networks, advertising, recommendation from a peer in B2B or a relative in B2C, etc.), that has shown a more or less explicit interest in your offer and that has left you their contact information, including their email address.
It should be noted that the ” lead ” is a progressive concept. Marketing teams are not simply responsible for identifying leads and eliminating the non-leads . They must evaluate and measure the degree of interest shown by each lead, but also compare their profile to the company’s ideal customer profile to qualify them. Objective : prioritize the leads in a rational way to optimize the subsequent steps in order to approach the most ” hot ” leads first.
Can a customer be (re)considered as a lead?
To a certain extent, some customers can also be considered as leads. For example, a customer who has already purchased a product from you and signs up for your newsletter to receive content, promotions and exclusive offers must be converted again. It can therefore be integrated into the marketing and sales process to generate a new sale and thus boost Customer Lifetime Value (CLV).
In today’s uncertain economic climate, B2B companies seem determined to leverage their existing customer base to generate new sales, particularly through cross-selling (encouraging an existing customer to buy products or services that are complementary to their last purchase) and up-selling (encouraging an existing customer to opt for a product that is more expensive than the one they have purchased or plan to purchase).
The lead and maturity of the company’s technology stack
Each company may have a different definition of what a hot lead is. For example, a lead who simply downloaded a white paper or “liked” a few of your company’s posts on LinkedIn can be considered a lukewarm lead. On the other hand, a lead that has requested documentation or visited the pricing page of your website can be considered a hot lead. We will develop this point in the lead scoring section.
The maturity of the company’s technology stack plays a major role in its ability to prioritize its leads effectively. Indeed, a company with functional and integrated MarTech and SalesTech tools will be able to leverage relevant data like :
- Leads that visited the ” that matter ” web pages such as the company’s offer page, pricing page or customer testimonials page ;
- The number of times a lead has visited your web page ;
- Weak signals about a possible need expressed by the lead (or other collaborators of his company) on LinkedIn, etc.
What is a prospect?
A prospect is a potential customer who has expressed a clear and honest interest in your product or service offering and who meets all (or most) of your target criteria. Between the lead and the prospect, there is essentially a difference in the degree of maturity, because unlike the lead, the prospect shows promising signs of conversion.
Traditionally, we associate leads with marketing and prospects with sales, but this separation is no longer so marked with the emergence of concepts such as Sales and Marketing alignment, the ” Smarketing “Or Flywheel Marketing, where sales and marketing teams work closely together to generate leads, turn them into actual customers, build loyalty and encourage them to continue purchasing.
Typically, the prospect is a lead who has requested a product demonstration or has asked for a quote. It can also be a lead that has made or accepted an appointment with a sales person, or an actual customer who has explicitly expressed interest in an additional product or service.
Leads or prospects : confusion reigns in the company
Sometimes, companies take some liberties with the theoretical definitions of a lead and a prospect. For example, these two terms are used interchangeably. This is often the case for companies that are not very mature in the areas of lead generation and sales prospecting. They often rely on basic techniques to boost their sales performance, such as cold calling, cold emailing without targeting or buying customer databases.
In other cases, the intrinsic concepts of lead and prospect are there, but the terminology differs. The lead is sometimes called ” contact “, the prospect is called ” lead “. In other cases, we will opt for the related concepts of Marketing Qualified Lead (MQL) to qualify a lead, and Sales Qualified Lead (SQL) to qualify a prospect.
In any case, it is important for the company to clearly define its terminology and to define the chosen concepts to avoid any internal confusion. Its commercial performance depends on it !
How should a lead be treated?
There is no magic formula to convert a lead into a prospect, and for good reason… the factors that come into play are numerous : sector of activity, average basket, specificities of the target, size of your company, etc. However, there are a few essential steps that will help you maximize the chances of conversion. Deciphering…
Step 1: thank the lead who trusted you
You have launched alead generation campaign that is starting to bear fruit. Well done. But remember : the lead is not an end in itself. This is an avenue that will need to be pursued to generate a lead. What if you started by thanking your lead for taking the time to fill out a contact form or download an ebook ?
The benefits are numerous : you start this relationship with a positive feeling, you anchor your brand in the memory of your lead and you give him indications on the next steps. Here are some tips for thanking your leads:
- You can opt for a thank you email, a Thank You Page or better : both ;
- The thank you email can easily be automated. It would be a shame to miss out. Twilead can do it the right way;
- The thank you email should be personalized, at least by integrating the name and/or the first name of your lead ;
- If you have promised content (white paper, video tutorial…) in exchange for completing the form, this content must be sent immediately after submitting the form, in the thank you email ;
- Suggest to your lead to follow you on the networks.
Step 2: Encourage a second conversion
The moment of the first conversion represents a great opportunity to encourage the lead to take another step in their buying journey. The content requested by the lead is a good indicator of their interests. Take the opportunity to suggest other content that might be of interest to them, including an upcoming webinar or event you are planning.
Step 3 : Lead Scoring, to prioritize leads
Lead scoring is a method of classifying leads according to their degree of qualification and their conversion potential. According to a study by Marketing Sherpa, companies that practice Lead Scoring boost the ROI of their lead generation strategy by 77% ! Here’s how to do it :
- Define the criteria that qualify a ” good ” lead for your company. Example : the sector of activity, the size of the company (workforce), the budget, the urgency of the need, etc. ;
- Assign a score to each criterion (for example, a lead that belongs to a targeted industry may receive 10 points, while a lead that does not belong to that industry will not receive any points) ;
- Add the scores for each criterion to get a total score for each lead ;
- Classify your leads according to their total score (for example, leads with a score above 50 can be considered highly qualified and priority).
Once your leads are qualified (by marketing) and prioritized, they can be given to the sales team to start the prospecting machine. The marketing work is not over yet. You need to continue to work closely with salespeople to deliver relevant sales content to give density to their pitch.
To go further, you can consult our practical guide ” Lead Scoring from A to Z to boost your business in 2023 “.
How to treat a prospect?
All prospects are not equal ! And as the marketing and sales processes represent a certain cost for the company, it is essential to distinguish very early the prospects likely to buy from the others. This will save you a lot of trouble, for example :
- A prospect who does not have the budget to buy from you ;
- Your contact does not have the authority to make a purchasing decision in his or her company ;
- Your prospect has a need, but it is not urgent. His contract with his current provider or supplier ends in a year or more ;
- Your prospect has misunderstood your offer. In reality, you are not able to answer his problem.
By identifying these frictions early in the sales process, you avoid pursuing leads that won’t pan out, and you save yourself operational costs that will be even greater if your pipeline is large. Several methods can help you qualify your prospects. Of particular interest is the Budget, Authority, Need, Timing Framework, better known by the acronym BANT . In short, it’s about getting the following information to qualify your prospect before going further :
- Budget : how much is the prospect willing to invest to satisfy his need ? Is this budget compatible with your prices ?
- Authority : Does your contact have the authority to make a purchasing decision in their company ? If not, does it have the power to influence the person entitled to make a purchasing decision ?
- Need (need) : can your offer effectively solve the problem of your prospect ?
- Timing : is the prospect in a hurry ? Does he have to solve his problem within a reasonable time ?
” Rather than waiting days or weeks to qualify leads using a score derived from their behavior and engagement with marketing and sales resources, the sales team can go after the information that matters: their budget, the stakeholders in the decision, the match between need and offer, and the timing “Basha Coleman, Senior Marketing Manager at HubSpot, summarizes.
Of course, your prospect will not necessarily provide you with all this information explicitly. You will probably have to do some investigative work : monitoring on LinkedIn, events in which the prospect participates, public information on his company, etc. Also, rather than asking your prospect about his budget, you can ask him the cost of not solving his problem.
Once your prospects are qualified, you can start the sales machine and develop your sales pitch !