I recently met with a client who had landed a new position as sales director with a growing company. Sean was eager to ramp up his company’s sales revenue.
In our first meeting, Sean told me that his boss expected him to generate “a lot of new leads and prospects.” I asked Sean, “What is your definition of a lead and a prospect?” “They’re pretty much the same,” he responded.
Sean and his boss are partially right. Both leads and prospects can be converted into customers, but they are distinct relationships created by distinct sales activities. As Sean begins his new role, his success will depend on whether he is building a sales funnel, developing a sales pipeline, or both – and the resources he needs to meet his boss’s expectations.
Leads: The Top of the Funnel
Leads include a broad spectrum of individuals and entities. The processes for reaching them can be as low-tech as capturing contact information or business cards at a trade show to integrating online marketing automation platforms with a company website.
An online form that a visitor completes in exchange for access to specific content, such as an infographic, tool or other information, is one example of digital lead generation activity.
Prospects: The Pipeline to Sales
Prospects can be defined in either of two ways:
- Prospects are vetted, sales-ready leads, meaning that they meet your company’s criteria for a customer and that there has been two-way engagement between your prospect and a representative of your company.
- Prospects also may be defined as companies or individuals that have been identified as meeting your company’s criteria for a customer, whether or not two-way engagement has been established.
Based on these definitions, Sean’s role at his new company and the resources he needs to perform that role could be very different. Here are the questions Sean and I discussed to clarify his role.
- Does the company have digital resources, such as electronic content, inbound web forms, a marketing automation platform or online ads to generate leads?
- Does the company attend trade shows, conferences or meetings?
- Are there resources and processes for qualifying the leads that have been captured?
- What is the criteria for identifying a prospect, and/or qualifying a lead as sales-ready?
- What are the specific steps in the sales process, and what actions are taken at specific steps?
- What behaviors indicate that a prospect has reached a specific step in the buying process?
Sean’s boss doesn’t expect “lots of leads and prospects” — she expects new customers. Prospects and leads aren’t “pretty much the same.” They require different resources and actions.
After our meeting, Sean planned to have a conversation with his boss to discuss leads and prospects, as well as the company’s sales priorities and resources.
Whether you’re in a new position or taking your current sales role into a new year, the question is valid: funnel, pipeline or both?