As a digital marketing consultancy, we often get asked what the difference is between leads, prospects (MQLs and SQLs) and opportunities and how to upgrade one to another. Many clients who are new to marketing automation, inbound marketing or even digital marketing in general are confused when they’re confronted with the terms and some even treat them all as if they mean the same thing.
Does all this terminology amount to jargon, or is there a noticeable difference that can make an impact on how you conduct your digital marketing strategy in general? Get ready, because we’re about to clear the confusion between a lead, a prospect and a sales opportunity.
An overview of the process
Leads, prospects and opportunities all form part of the buyer’s journey. They represent stages your customers go through before finally making the purchase.
Here’s a basic outline of the three customer stages and how they graduate from one stage to the next.
- A lead is someone that opts into your communications, or becomes aware of your solution, or somehow otherwise becomes known to your company.
- After educating themselves about your solution and further qualifying themself, the lead becomes a prospect or Marketing Qualified Lead (MQL) for you to consider for further encouragement.
- The prospect starts comparing your solution to others and starts evaluating. Likewise, your business starts to evaluate the prospect to see if they’re a good fit for your solution. They may become a Sales Qualified Lead (SQL).
- Once the prospect has agreed to consider your solution and your company has identified the prospect as a good fit for your solution, they become a sales opportunity.
- As a sales opportunity, it’s up to your sales reps to guide them into making a purchase and becoming a customer.
Let’s take a closer look at each stage and how they progress into the next.
What is a lead?
Let’s start at the beginning for much of your sales cycle and buyer’s journey - the lead.
A lead is a person who is newly aware of your product or solution.
A lead is a person who is newly aware of your product or solution. They are often brought in by clever marketing tactics and promotions, and have just begun to interact with your content. Thus, they have typically expressed some level of basic interest in your product, but have not proceeded to identify themselves as an ideal buyer, or as a person who has decided on your product specifically.
Whether they have interacted with your website, blog post, whitepaper, video or any other kind of content is largely irrelevant as long as they are still being educated about your product or solution.
In more stricter marketing terms, a lead is an individual or potential customer who is on top of the marketing funnel and is unqualified.
Leads can be generated through:
- Engagement from content
- Form signups
- People who have responded to cold calls
- Inbound marketing or your website
By educating the lead about your solution through content such as blogs, white papers, consultations, trials, webinars and other education materials, you increase the chances of upgrading that lead into a prospect.
What is a prospect?
If your marketing strategies have worked, some of your leads may become prospects.
Prospects are leads who have been educated about your product or solution and prove to be a good fit as a customer.
Prospects are leads who have been educated about your product or solution and prove to be a good fit as a customer. These individuals are now naturally progressing towards a decision through dealing with a sales representative.
In other words, once your lead contacts you with queries about your product, they graduate into a prospect.
Some companies, by virtue of their industry or business, have a different definition for a prospect. These companies broaden the definition to companies or individuals who fit a particular buyer persona, and are marked as prospects by this definition. It is important to note that these kinds of prospects should be incredibly rare as to not waste valuable resources in pursuing them.
Once a prospect has agreed to consider your solution and you’ve identified them as a potential customer who can benefit from your product, they finally become an opportunity.
You can encourage this process through comparative types of content such as:
- Case studies
- 1:1 telephone calls and emails
- Trials and demonstrations
- Data sheets
- Special deals and discounts
What is an opportunity?
You’ve put in the work. You’ve educated the lead. You’ve supported the prospect.
Now it’s time to make the sale.
An opportunity is a prospect that has agreed to consider your solution and is in the final stage before making a purchase.
An opportunity, or to be more specific, a sales opportunity is a prospect that has agreed to consider your solution and is in the final stage before making a purchase. Here, you’ve done your best to identify the opportunity as an ideal customer and have pointed out all the reasons why your solution is the best available for them.
The best way to identify a sales opportunity is by asking the three following questions:
Do they have a problem your solution can solve?
Every sales opportunity needs to have a problem or pain they need to alleviate. It is the job of the sales rep, or even through clever marketing, to identify what that problem or pain is and make the prospect aware of it.
Does the prospect have interest?
While prospects may have problems, they need to have a desire to solve them. If the prospect has no desire to solve the problem by using your product, they can never become a sales opportunity.
Is your solution an ideal fit?
If your solution can solve the problem, and your prospect has a desire to use your solution you only have one more barrier to overcome. If your solution is tailored for businesses with hundreds of employees, and the prospect is a three person company, they cannot qualify as a sales opportunity because they’re not the right fit. Some easy ways to identify fit include evaluating the budget, size, location and capabilities of the prospect in question.
By now, your sales representatives should have all the intel and resources they need to create a compelling call-to-action for your opportunity. Now it’s up to your sales opportunity to make the final decision and become a customer.
End of the funnel
We have reached the end of this blog post and by now, we hope you have a better idea of what constitutes a lead, prospect or opportunity. In many ways, these three stages are what your entire business either lives or dies by.
If you would like some assistance in qualifying your leads into prospects, or turning those prospects into loyal customers, consider Demodia for your digital marketing needs. With over a decade of experience with leads and customers, Demodia has the right tools, approach and strategy you need to make your business flourish.
Contact Demodia today, and we will be happy to set up a free consultation.