Most people think that “sales lead,” “prospect,” and “opportunity” are the same thing and are used interchangeably. But, in reality, they are different and used for different scenarios in the sales cycle. While all are interlinked in some ways or the other, their distinct characteristics cannot be ignored any further.
This post primarily addresses the fundamental differences between these terms and how they are interconnected. We can discuss the best strategies and practices to convert a lead into a prospect, and a prospect into an opportunity. Also, there are stages and characteristics of an opportunity, which creates the backbone of the sales’ cycle of a brand.
Sales leads sit at the top of the sales funnel, but they are not qualified yet. Keep in mind, that the efficacy of your sales plans lies in how effectively you are converting your leads. They are the people who are in touch with your brand somehow, but the potential sales lead is aware of the service and products of your company. But that doesn’t say anything about how interested they are as a potential customer. Having a sales lead only means that you win a chance to convert that lead in the long run. In fact, lead generation is the first and crucial step in the sales process.
Right after the sales leads, comes the prospects. Prospects are the people or contacts who have been qualified to move down the sales funnel. There is a high chance that they will benefit from your services or products. For that matter, they have shown interest in the first place. A prospect is the one which goes into your sales pipeline and is seen as someone who gives an enthusiastic response to your lead nurturing process and is most likely to buy from you.
When a qualified prospect has a high chance of becoming a customer (paying), he or she is considered a sales opportunity. That’s where you need to apply your marketing moves. Your product or service must address a clear pain point of the prospect, for which he must be interested in the offer. It’s important to understand your sales opportunity to the core. In order for the prospect to become a sales opportunity, sales representatives must clarify why it is a wonderful offer for the prospect. A prospect must feel confident about your offer and see the deal as good enough to close.
For a business to thrive and the sales team to close regular new sales, it is important to know the difference between the terms. After all, you will encounter a variety of potential customers, but not all of them will be converted as you plan. Some will be in the sales leads stage for years and no matter what you do will not convert. They are often called dead leads when they completely stop giving results.
With a sales lead, you are still unsure whether he or she will become a potential customer. On the contrary, prospects are always your probable customers. These prospects are even more important than leads in the sales funnel.
Let’s find out what goes into turning a lead into a prospect.
Turning leads into prospects
For the conversion of a lead into a prospect, the former has to walk through the company’s sales qualification process. As the leads go through the process, you will be able to assess whether your company’s product or service is the right fit for your potential customer. There are three stages to the lead qualification process, through which your potential leads become prospects:
Stage 1: Organization-Level Qualification
Does your lead meet the criteria of the company’s buyer persona or the ideal customer profile? If yours is a B2B company, you have to see whether the complete organization of the lead matches all the key elements that you want to work with. That is industry, company size, and location. If any of the key elements is missing, your lead does not match he buyer persona of your brand. In that case, the lead will be considered disqualified or low quality lead.
Stage 2: Opportunity-Level Qualification
Even though a lead clears your organization-level qualification, they have to pass the opportunity level. You have to decide whether the prospect can actually utilize the company’s offering. Will the offer, service, or product truly benefit them? If you get a yes and it feels like this lead is the right match, you can proceed to the next stage.
As the lead reaches the stakeholder level of qualification, you know it is no longer a lead but a potential prospect. The prospect has a genuine interest in your product or service and needs it. This is the final stage where the contact makes the final purchasing decision.
A lead is qualified as a prospect after completing the qualification process.
Unlike lead, the opportunity is a qualified prospect with a great chance of closing. Turning a lead into a prospect and further into an opportunity involves a lot of nurturing.
Stages Of Sales Opportunity
Prospecting, or qualifying, is a crucial stage of a sales opportunity. You won’t be able to go further without identifying an opportunity that exists. Also, you must ensure that there’s a greater possibility of having it.
The main goal of the prospecting stage is to decide whether the potential opportunity is worthy of your time, effort, and resources. Are you making the right call about it? Is there a real opportunity or not? If there’s an opportunity, study consumer behavior, and evaluate it honestly. You must know whether you can win it and whether it is worth winning. Finally, if the opportunity is a great fit for your company, you can proceed with it.
Not all opportunities will be clear-cut and easy to assess; some may demand your time and evaluation. Some customers may not have any budget in mind yet, and others may be thinking of making the purchase in the far future. So, if you do not have a potential deal yet, you have to keep track of long-term opportunities. Do not forget or neglect customers who require help or extra time.
Now, you don’t want to commit to deals that don’t suit your offer or are not promising at all. It’s okay that many opportunities will fall out of the pipeline at this stage.
After identifying a good sales opportunity, it’s time to find out the specific situation of the client. A good sales representative will try to address the pain points of the customer. Accordingly, they can provide a fitting solution to the customer.
You have probably already received general information about these opportunities from the first stage. But in the discovery stage, it’s time to pin down the specifics of these opportunities. What is the budget of each potential customer? What are their timelines? Can you offer them the specifications they need? You may find out at this point that some of these opportunities are not right for your company, and you can remove them from the pipeline.
Are you getting all the metaphorical green lights and a fantastic sales opportunity? Then you must make a proposal or offer. Your offer can come to the prospect as a formal quote or a variety of pricing options. In proposal mode, it is important for customers to get all the information they need to make decisions about the purchase.
Closing is the final stage of the deal’s negotiations. This is the stage where you want to have a signed contract with the prospect, along with logistical details prepared and agreed upon in your contract template. The logistic details contain manufacturing or delivery plans.
You have to understand that at any point in these stages, some deals may be abandoned or lost. It’s time for an assessment of why the deal did not work out. After that, you can take action to improve the process for the next customer. If the opportunity went to a different company, then it is investigation time. You must find out why your competing company got the deal and how you can do better in the future.
Sometimes the budget or timeline shifts for a potential customer, and they can not commit at that moment. Stay in touch with these customers to find out if any opportunities come up in the future.
Without a doubt, winning a deal is the best outcome. But, it does not end here. After winning a deal, you must follow up with the customer on a regular basis. This is called “nurturing,” which ends up giving you a satisfied customer base.
Now you can keep track of all the leads, prospects, and approved sales opportunities with the help of ConvergeHub. This CRM is designed to build an ideal sales pipeline for your company, aiming you toward success.