It’s quite the surprise that even in this day and age, defining leads, prospects and opportunities still remains a process bound by unending trial and error. This is because there’s a vast disparity among organizations, industries and functions in how they define these terms.
Such a vast disparity that we figured a fortune teller may have a better chance of accurately telling you how to classify your “leads”. So we went ahead and built one for the purpose of drilling in an all-important message — the necessity for a cross-functional lead qualification and prioritization framework, and in turn, the importance of a solid marketing-sales alignment.
Meet Slintel’s Very Own Lead Fortune Teller
Now that you have a general idea of what differentiates a lead, a prospect and an opportunity, it’s time to define the three within a more universal context.
Lead vs Prospect vs Opportunity
Leads, prospects and opportunities can mean different things to different functions. What inbound considers as a lead can be poles apart from what outbound does. And it is often that the two find themselves at loggerheads over who gets the credit.
In this post we’ll be looking at leads, prospects and opportunities from a holistic lens that encompasses inbound, outbound and marketing narratives, and removes friction between them.
But how do we achieve this?
By defining leads, prospects, and opportunities the right way.
What Are Leads?
Ideally, a marketing lead can be defined as any decision maker or business within your TAM that has made initial contact with your brand’s marketing real estate. They arrive via inbound channels that marketing has created and optimized to attract and convert audiences.
Since AEs don’t operate at lead level, for sales, leads are an outbound game. Anyone your outbound team is reaching out to should technically be classified as a sales lead.
Since leads are defined quite differently for both marketing and outbound, and across industries, it becomes tricky to convene at a universal definition for it.
However, we should strive to arrive at a rough definition that enables both marketing and sales to work more efficiently together.
In doing so, a lead can be defined as any decision maker or organization that has an actual use for your product or service. Basically this is your entire market or Total Addressable Market (TAM).
However, most leads in your TAM are still in the unaware stage, where they’re yet to familiarize themselves with a product like yours. So prioritizing leads that have the best chance of moving the quickest from the unaware to the decision stage is crucial if businesses want to be at their productive best.
This brings us to the second part of the equation— weaving lead prioritization into this definition. For marketing and sales to work together to chase the right leads, data becomes an integral part of this definition.
As a result, this definition becomes more of a framework, where data is used to disqualify leads that aren’t warm enough to be pursued. Not just any data, but literally all the relevant data in the world that you could possibly use (aka buyer intent data).
So using the right data, marketing can disqualify and prioritize the inbound leads coming in, that are edging towards this 3%. At the same time, the outbound team can use data to find this dynamic 3% of key accounts.
What Are Prospects?
Once a lead has moved from making initial contact to exploring your product in-depth, through your marketing real estate, they become prospects.
When leads perform activities such as downloading product collateral, signing up for free trials, and newsletters, they seek to learn more about your product. And in turn, they move towards making a purchase decision. This is when marketing generally classifies a lead as a prospect.
When an outbound rep successfully gets a lead to agree to demo your product, or show sufficient interest towards making a purchase in the near future, they become a prospect in the eyes of the sales function.
As I said earlier, different industries and organizations may have different trigger events that classify a lead to be a prospect.
A great analogy for prospects is the scenario of when a romantic relationship gets serious — both parties — buyers and sellers — become genuinely curious and concerned about each other.
Now curiosity and concern (towards your product, of course) are variables that the buying intent framework tracks and turns into comprehensive sales intelligence. So rest assured, whenever there’s a ripple in the ocean, you get to be the first to stab at it.
Buying intent tools help you track these ripples across the internet. Pair it with interaction data collected across your website using marketing automation tools, and you can gauge buyers’ levels of curiosity and concern with impeccable accuracy.
Prospects actively go out of their way to learn more about a product or service in order to reach a stage where they’re knowledgeable enough to make a purchase decision.
Now if a decision maker has moved from the unaware stage to a level of curiosity and concern that is just short of them outright going and buying the product, you’ve got yourself a prospect.
We’ve already gone through the motions of what can be deemed prospect-worthy in our fortune teller charade. So feel free to revisit it if you may have forgotten.
What Are Opportunities?
Marketing generally doesn’t define opportunities. This is more of a sales-exclusive term.
But in any case, if marketing were to define opportunities, they would be those prospects that successfully got past your marketing real estate filters, interacted with the sales team, and were thereafter deemed worthy enough to make an immediate purchase.
Any prospect vetted by your sales team that has shown their readiness to make an immediate purchase decision in favor of your product is considered an opportunity.
To be more precise, various lead qualification frameworks such as BANT, CHAMP, and ANNUM are used to disqualify and sieve out prospects from opportunities.
Once the prospect has hopped over the curiosity and concern barrier and into the land of hope called opportunity, there’s still some work to be done.
Prospects enter the opportunity stage once they’re informed enough to make a purchase decision. This is when they start booking demos, interacting with sales teams and outwardly showing their readiness to take that final step of making a purchase.
But they still need to be convinced to choose your product as their pick of the bunch.
Buying intent preps you with a knockout blow of insights that helps shepherd good-fit opportunities into the hallowed land of buyers.
The New Way
The buying intent paradigm has become the new world standard for efficient lead categorization. Not just for one particular function but for practically the whole organization as a well-oiled unit. So we urge you to read more about it.
Now using the cross-functional definitions of these three terms, marketing and sales teams should be able to agree upon creating a unified funnel. Doing so will enable both marketing and the outbound sales team to align and work together to prioritize and warm up the same high-intent account in a coherent manner for AEs to fully focus on.
This means more high-intent opportunities flowing into the funnel and within your AEs grasp for more smooth-sailing closures!
If you’d like to learn more about building an all-encompassing buying intent framework, you can check out our B2B sales funnel post, where we teach you how to build the ultimate sales-marketing framework that keeps on giving.