Leads vs Prospects: What's the Difference?
When gathering data, one of the first questions people encounter is the difference between leads vs prospects. Let's demystify this once and for all!
You may be a marketer, or you could be a business owner. Either way, you know the importance of having a robust new business pipeline.
The vast majority of businesses go under because of cash flow problems. Leads and prospects are the keys to making sure that you have new business opportunities and different ways to make money.
You know they're important, but do you know the difference between leads vs prospects? If you don't, you could have trouble down the line.
Leads vs Prospects: Why the Difference Matters
On the surface, the difference between leads vs prospects may seem trivial. After all, they're both different ways of saying you could have a new client to bring on board. Despite this similarity, leads and prospects are actually quite different.
The reason why it's important to know the difference between leads and prospects is because of how it affects your sales pipeline and process. To make things simple, let's take sales out of the process and just think in terms of relationships.
You come into contact with a variety of people throughout your day and you have different ways of communicating with them. You'd greet your spouse differently than you'd greet a family member and you'd also talk to a personal friend differently than you would talk to a coworker.
Relationships and communication are the main reasons why it's important to differentiate between leads and prospects. You're going to interact with them in different ways, and need to tailor your message to each accordingly.
If you want to know the difference when it comes to leads vs prospects, let's look at each differently.
What is a Lead?
A lead is someone that's going to be at the very beginning of the sales process. These are people you may have sent a cold outreach email to, subscribed to your webinar, or made some sort of initial connection with.
The thing about leads is that they're a bit mysterious. You may know little else aside from their name, email address, and whatever other contact information they gave you. There's no real way to gauge their possible interest in your product or service.
Leads are the lifeblood of any business regardless of industry. They may not have agreed to anything yet, and they may not even end up being interested in what you're selling. But the bottom line is they present an opportunity, and if you're saying the right thing at the right time it can grow into something special.
What is a Prospect?
Think of a prospect as a next-level lead. They've made a connection, but they're also someone you know has a strong desire to purchase what you're offering.
A prospect needs to fit your target market in some way. They could be the right gender, income level, job title, or another target demographic you're trying to reach.
They should also have the means to buy or use your service. Someone that hits nearly everything you're targeting that doesn't have money to spend isn't someone that you would identify as a bonafide prospect.
Last but not least, they need to have the authority to make purchasing decisions. This is simple when you're doing retail, but when you're selling a service this can get tricky. A CMO, CTO, or someone else that has a fancy title but no decision-making power isn't a good prospect.
Which is Better?
If you're still deep in the leads vs prospects debate and want to know which one is better, you're going to be searching for a long time. The truth is "better" is a subjective term. A lead or prospect will be better for you depending on your business goals.
Every business needs leads to survive. If you don't have potential customers or buyers, you're in trouble financially. But a flood of leads that don't turn into prospects isn't an ideal situation.
If you're starting out and truly don't know where your target audience lies, you need leads. You may not know how interested they are, but they represent potential.
If you need to close some deals, a prospect is going to be what you're looking for. You need to make sales, and you need to ensure who you're talking to is interested in what you're offering.
How Do I Get Both?
Once you see past the leads vs prospects debate, you'll realize that you need both. You might start blogging for leads and have a robust digital campaign, but you aren't sure what else you need.
Here are some tips to help you get leads and prospects that can help your business.
Get Customer Referrals
Do you have some customers you know love your work? Are there people you can lean on to tell a friend about how much they love what you do?
Your customers aren't just good for buying things from you, they can also be a free form of marketing. Encourage them to tell friends and business associates about you. Give them a few business cards or pre-printed materials to make their job easier.
When was the last time you went to a networking event? If your answer isn't "sometime in the last month" you aren't networking nearly as much as you should be. Networking is essential for any professional to succeed and grow.
Networking isn't just a way for you to meet people in your industry, it's also a great way to lay the groundwork for potential partnerships. Some people think that events aren't worth going to if you can't meet paying customers, but meeting other businesses can be just as helpful.
Businesses and companies that could benefit from working on a project are leads and prospects too. Imagine meeting a bigger business that could use your expertise on some overflow work they can't handle. That could lead to more contracts and work in the future, and opens you up to their own network of professionals.
Now that you know the difference between leads and prospects, you're ready to make some of your own. If you're ready to improve your marketing efforts to get more of what you want, contact us today so we can help.