“In your opinion, what’s a Lead?” In almost 90% of our workshops, that’s our first question to participants. Why? Because there’s no industry standard definition for the term ‘lead’. In common practice, there are many ways to designate someone thinking of buying your product. Whether they’re just an address with no other details, or a serious potential customer with the necessary budget and the intention of making a purchase soon. Our customers speak almost interchangeably of leads, prospects, contacts, customer inquiries, opportunities, and suspects – to name but a few in a long list of terms! We always ask them lots of very targeted questions – to avoid misunderstandings. Not only between customers and us as a marketing agency, but also – and more importantly – between the customer’s marketing and sales departments. This is a classic area where different views of what a lead really is can raise false expectations and produce disappointments.
So what’s the solution? A clear and unequivocal definition, for starters. It doesn’t actually matter what you call your leads – the important thing is that everyone has the same view of what they are. Over the last few years, the following terms have become more common and help to narrow down the definition of a lead a bit further.
Definitely doesn’t sound very positive, does it? Like a suspected criminal. But all we’re talking about here is the target group – people who belong to the right audience and who we “suspect” might be interesting (and interested!). They’re not customers yet, in fact it’s unlikely there’s ever been any contact between them and you. But you’re pretty sure your product or service will be of interest to them because of the target group they’re in.
As we’ve seen, the word ‘lead’ is often used as a catch-all term. But actually, it’s a contact that may well “lead” to a sale and is therefore well worth pursuing. A lead always has some indications that the person might be interested, such as the fact that they’ve downloaded a white paper or clicked on something specific on your website.
A prospect is someone who has expressed interest in your product or service. They might have downloaded a product brochure, visited you on your stand at a trade show, or come to see a product demo. The prospect is definitely interested, but you don’t yet know if they’re qualified to make a decision, if the budget is available or if they’re serious about making a purchase.
The way we see it, a prospect becomes an opportunity once they’ve said they need a product or service like yours, they have initiated a project to look at the issue (or soon will), and allocated the budget to it. It’s a serious opportunity to make a sale.
So that was short and sweet – our guide to differentiating all the terms for a lead. As I mentioned before, it doesn’t matter what you call each of these four states – the important thing is that everyone’s on the same page about expectations and about who needs to do what to move up to the next category – from a prospect to an opportunity, say. Each stage should be clearly defined and communicated to everyone involved.