Often mistakenly used to reference the same thing, these two terms are in fact quite different.
One belongs to the marketing department while the other is a function of the sales team.
One can be automated while the other is a manual process relying on human interaction.
The result of a lead generated, is someone who has expressed an interest in more information on your product or service.
The result of a prospect “qualified” is to have a need or requirement for the product, a budget established and a timeframe to acquire it in.
As you can see, they are very different but both have very important functions. Depending on the type of business you are and the products or services you deliver, you may be lucky to only require one or the other. However, in most cases you will need both Lead Gen and Prospecting.
The terms ‘Prospects’ and ‘Leads’ are often used in the same way to refer to the same thing, yet Lead Gen and Sales Prospecting are different. Let’s dig deeper into the two functions to better understand the difference.
- Lead Gen is a duty of the marketing team, while Prospecting is delivered by the sales department.
- Prospecting is when the sales team finds, qualifies and progresses “prospects” through the sales funnel.
- Lead Gen creates the “leads” that the sales team then qualifies to become prospects.
- Prospecting is manual and requires human interaction, while Lead Gen is predominantly Automated.
Hubspot produced a report in 2021 called the Sales Enablement Report which states that 40% of sales people indicated that prospecting was the most difficult element of the sales process, more so than Closing Deals even.
Lead Generation
Gathering the leads’ contact details on the basis of them showing some interest in your product or service.
This is the minimum required to categorise a “lead”.
Where the marketing department can help increase the likelihood of a “lead” becoming a “prospect”, is if they can gather further information at this stage.
For example questions like:
- How many staff or users do you have who require access to the product/service?
- Has a budget been established to procure the product/service?
- How many quotes or proposals are required from suppliers?
- Are you the decision maker or are there others?
- Timeframe for implementation?
The answers to some of these questions can help convert a “lead” into a “prospect” even before it gets to the sales team for further qualification.
Can the process be fully automated?
In some cases, generally with online purchases in the SaaS model with a per user per month subscription and payment by uploading credit card details.
But for most companies human interaction is required to close the business.
Many marketing departments find themselves caught between a rock and a hard place when it comes to what their colleagues in the sales departments want:
- Some will say, “we want more leads”.
- While others will insist, “we want better qualified leads”.
We can’t be all things to all men.
More leads is a particular strategy and methodology, while better qualified leads is another model.
Some of the best methods for Lead Generation include:
- Referrals – referrals from existing customers are top of our list. You don’t always have to wait to get referrals. It’s okay to ask for them. Or better still, build a reward scheme that rewards referrals when new business is closed. These are arguably the hottest lead source and most likely to close.
- PR – press releases, public speaking, presenting, news worthy stories and the like, that can be pushed out to your audience both in the traditional sense and indeed online. You can reuse this content on various platforms and create brand awareness.
- Email – mailshot campaigns with a well thought out follow up phone call strategy can be very effective, however, it requires strong telesales or telemarketing skills.
- Tradeshows & Networking events – can be a great source of leads. Just be careful not to get caught up chatting with colleagues in the industry rather than actually gathering leads.
- Media – radio and TV can be extremely expensive but also give valuable credibility to your brand. In other words, if you can afford to promote on the radio or the TV then you must be successful as an organisation.
- Paid lead generation providers – many of these types of companies exist and one should be cautious in selecting the right ones to partner with. Lead gen companies, content creators, distributors and list providers represent opportunities to source leads via 3rd parties.
So then what exactly is involved in turning a “lead into a prospect”?
Identifying potential prospects using various sources including social media like Twitter, LinkedIn, Facebook and Instagram (these are dependent on what best suits your business and industry).
Personal communication offers a far better return than automation or boilerplate mailshots.
Design a well thought out pitch for each type of lead source or demographic.
Nurturing – this is a process that can take a number of “touches” or attempts to reach potential prospects.
Many experts believe it can take up to 10 touches or contact tries before you have fully exhausted a lead or suspect. This can be through phone calls, emails or anything else you can think of to try to get them engaged in your process.
Even though in many cases a “lead” has been generated by your marketing department, you may find it difficult to actually reach them by phone or email until after a few attempts.
Do you give up or persist?
As we explained above, it can take as many as 10 attempts to reach them in order to get traction or even a response. However, at some point you do need to call it a day if you’re getting no replies.
What should you do then?
Pass them back to the marketing department to add to a mailing list to see if they can be resurrected at a later date.
They may receive a mailshot in 3 months’ time that peaks their interest to actually re-engage.
So to summarise what we are saying, both Lead Gen and Prospecting are incredibly important and necessary functions. Lead Gen comes first in terms of the process and is delivered by the marketing department. Then the “leads” are passed to the sales team to be properly qualified as “prospects” to hopefully close the sale and increase revenue for your company.
If you find a couple of things here that are valid and making sense, but you feel you could do with some help or advice on how to implement changes – get in touch with Outsource Sales Director
