When it comes to sales, a lot of jargon is thrown around. If you're not in the industry, it can be hard to keep up. In this blog post, we're going to demystify some of that jargon by defining leads, prospects, and opportunities in the sales funnel. With a clear understanding of these three terms, you'll be better equipped to monitor your company's sales progress and make informed decisions about where to allocate resources.
A lead is an individual or company that has been identified as a potential customer for your product or service. A lead typically goes through some level of marketing nurturing before he/she becomes a customer or client. For example, you may have a lead generation campaign where you offer a % discount off your product in exchange for an email address. Once you have that person's email address, you can add them to your marketing newsletter list and continue to market to them until they are ready to buy.
A prospect is a lead who has been qualified as a good fit for your product or service. In order to qualify a lead as a prospect, you will need to gather some basic information about them. This process is often referred to as lead qualification. The information you collect will depend on your product or service, but at a minimum, you should try to find out the following:
• What need does this lead have that your product or service can address?
• What is their budget for addressing this need?
• Are they the decision-maker within their organization?
If you are able to answer these three questions confidently for a lead, you can be considered a prospect. Here are some additional questions you can ask on a sales call to qualify your prospect.
An opportunity is a prospect that is actively engaged in your sales process with the intention of buying your product or service within a defined timeframe. In order for an opportunity to exist, several key things must be true:
• The prospect has been qualified as a good fit for your product or service.
• You have established contact with the decision-maker(s) within the organization.
• You have gathered all relevant information about the opportunity (need, budget, timeline).
• You have created and submitted a proposal outlining your solution to the prospect's need.
• The prospect is interested in moving forward and is considering your proposal.
If all of these criteria are met, congrats! You have an opportunity! Now it's just a matter of time (and sometimes price) until you can close the deal.
Leads, prospects, and opportunities are all key steps in the sales funnel. By taking the time to qualify leads and turn them into prospects, and then nurturing those prospects into opportunities, you can increase your chances of making a sale. Keep these definitions in mind next time you're monitoring your company's sales progress!
