Before becoming a paying customer or client, a person or organization must first pass through several stages of interest. In B2B sales, the terms leads, prospects, and opportunities are often used interchangeably, but they actually have different meanings.
Each stage requires a different type and amount of engagement. Meaning that you can’t give a lead the same type of attention as you would an opportunity. So, we can also say that understanding the differences between these three terms will save you time, energy, and resources. More importantly, it makes it much easier for you to more accurately assess where a potential customer is in their buyer’s journey, and how best to move them forward.
In this blog post, we will define each term and discuss how they differ in regard to B2B sales.
B2B Sales: Leads vs. Prospects vs. Opportunities
In the B2B sales funnel, there are some stages of engagement that are required before an organization can become a paying customer.
Each stage of the funnel pushes your qualified leads into the next stage and drops those that are not a fit for what you offer. For example, if you have 100 leads, maybe just 50 will be converted into prospects. And, of those that do become prospects, not all of them will turn into qualified opportunities.
By the time you get to the bottom of the funnel, you should only have a handful of qualified opportunities that are ready to buy from you. The further you move an organization down your B2B sales funnel, the more interested they are in your product or service. This also translates to the higher your chances are to close a deal.
What Makes Leads to Opportunities Different?
Now that we understand where each term falls in the sales funnel, let’s discuss what makes them different and what’s the best way to approach each stage.
Leads: Those who are simply interested
A lead is someone within an organization who has shown an interest in your product or service. They might have filled out a form on your website or subscribed to your newsletter. However, they haven”t been contacted by a sales rep yet.
For example, if you’re a SaaS company, someone who signs up for your free trial would be a lead. Even someone from a company who submitted their email address to see a gated, exclusive explainer video from your website would be considered a lead too.
In other words, a lead is someone who might need your product, but there’s no way to be sure until you’ve engaged with them further. Since it’s not a sure thing, the lead could be nothing, or there could be something that makes you want them to stick around and keep talking and interacting.
What makes them worth fighting for?
Leads can play an important role in B2B outreach because they can be a good source of information about people who have visited your website or subscribed to your newsletter. They help you understand your target market and what they’re interested in.
This means that they have already been exposed to your brand and are familiar with what you do. As a result, they may be more likely to connect with you and provide valuable feedback. This type of feedback is essential for product development and marketing purposes.
Leads can also turn into paying customers or clients down the line if nurtured properly.
How do you convert leads?
At this stage, the goal is to simply get in touch with the lead and see if they’re interested in learning more about your product or service. The best way to do this is through an email or phone call.
When reaching out, it’s important to be respectful of their time and not try to sell them anything just yet. Remember, they’re not ready to buy anything yet.
The best way to approach this is simply to introduce yourself and your company, explain what you do and how it will benefit them, and see if they’re interested in learning more.
Prospects: They want to be friends
The more high-quality leads you generate, the more chances you have of finding a qualified prospect. A prospect is a lead who has been contacted by a sales rep.
The salesperson reached out and tried to start a conversation. This means that when you’ve contacted a lead and they respond back, they become a prospect.
What makes them worth fighting for?
Prospects are worth fighting for because they have already shown an interest in your product or service.
They’re not just a name on a list. You’ve already started to build a relationship with them. You know what they’re interested in and you have a general idea of what they might actually need.
As a result, prospects are much more valuable than leads because they’re further along in the buyer’s journey.
How do you convert prospects?
The goal at this stage is to continue building the relationship and relate to them on a more personal level. We can also say that engaging and converting prospects is all about starting a conversation and trying to understand their needs.
This means that you need to find out more about their pain points, the solutions they’re looking for, and see if your product or service can help them.
This is where you’ll start to get into the nitty-gritty to figure out if there’s a fit. The important thing is to keep the lines of communication open and continue building that relationship in the consideration stage.
The best way to do this is by doing a one-on-one approach through a meeting, whether that’s in person, over the phone, or via video conference. Product demo videos, use case studies, or testimonials—any content that resonates more specifically with them, working backward from their perspective—is also an effective approach.
Opportunities: One step closer
An opportunity is a prospect who has been qualified as a good fit for your product or service. They are actively considering making a purchase and might be in the process of comparing different vendors or negotiating terms.
In other words, they have a need for your product or service and are convinced that you can provide it.
What makes them worth fighting for?
The obvious answer is that they’re ready to buy. They’re much closer to becoming a paying customer than a lead or prospect.
At this stage, you know that there’s a need and you just need to close the sale.
How do you convert them into customers?
The best way to approach this is to provide them with a proposal that outlines the terms of your product or service. This is where you’ll include things like pricing, delivery, and any other important details.
The goal is to provide them with enough information so they can make an informed decision. Once you’ve sent the proposal, it’s important to follow up and see if they have any questions or concerns.
At this stage, it’s also a good idea to start thinking about negotiating. This is where you’ll try to reach an agreement on price, delivery, and any other important details.
Build More Sales Opportunities
By understanding the difference between leads, prospects, and opportunities, you’ll be able to create a targeted outreach strategy that will help you close more deals. The important thing is to keep generating leads, reach out and start conversations, qualify them as prospects, and then turn them into opportunities.
But, at the end of the day, they’re all potential customers who are looking for solutions to problems that their organizations or business have. It’s always best to focus on being human and approachable first and foremost.
Also, remember that it’s the relationship that you build with them that will determine whether or not they’ll be willing to be moved through your sales pipeline.