The two terms above are very common in the business realm, but they are not as easy to define as they may seem. They are deeply ingrained in many business processes. Due to this reason each company or business may have differing definitions. In order to ensure good continuity, the terms must get a common definition.
Let us start by looking at the definitions for each term.
What is “leads?”
This term makes it hard to define because it is covered in a wide variety of qualifications and standards. Basically, it is defined as an inbound form completion on the web. There are forms that are completed on the web as a way of asking questions. Those who fill and submit the forms are considered leads though they may not have any intention to make a purchase.
For sales leads on the other hand, they have been thoroughly vetted. They are checked with clarity to ensure that they are beneficial to the company; they are a focus group. They could have been involve in web form submission but have been selected due to their demonstrated interest to make purchases. These leads are prepared for contact.
The definition of lead using the dictionary can be a bit different. The Merriam-Webster dictionary defines lead as “a piece of advice or useful information especially from and expert”, or “a slight or indirect pointing to something”.
What stands out clearly is that, leads are informational in nature. If applied in the business realm, a lead can be defined as information that points towards a sale, indirectly.
What is a prospect?
There are those who consider prospects as contacts that fit in their buyer personas, though they may have not shown interest directly. To others, prospects are simply sales-ready leads, those that have moved to the sales team into their pipeline.
A simple explanation from the dictionary is “something that can develop or become actual” M. Webster dictionary.
If you compare this definition with the one for a lead, the latter is more closely related to the outcome. In simple terms, the lead will put you on the possible path for an outcome while prospect is the destination of that path.
What is the difference therefore?
It obvious from the explanations above that prospects are deeper into the sales process that the leads.
Another difference is in association with their engagement. To leads, one way communication process in engaged. On the other hand, prospects are characterized by two way communication.
This means that, you reach out to a company through a sign-up and you provide your information. The lead only receives information and may not act on it. A prospect is one that has been reached out by the sales representative and contact has been established.
The methods of communication are another key difference. You contact leads through large groups by mails or other means. Prospects are contacted on a more personal level. To the prospects, messages don’t come from a general address but from associated representatives.
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