Four of the most common terms you will hear anywhere in sales are prospect, lead, contact, and opportunity. Sometimes they are used interchangeably, but each has their own distinct meaning that directly refers to the sales process.
So what exactly is a lead, a prospect, contact, and an opportunity? What do the terms mean, how do you use them, and what’s the difference? We broke it all down so everyone can understand.
Definitions of a prospect, lead, contact, and an opportunity.
What the difference is between leads, prospects, and opportunities.
When leads become a prospect, then an opportunity?
Defining prospect, lead, contact, and opportunity.
Before looking at the individual meanings behind the terms lead, prospect, and opportunity, it’s best to examine how they fit into the overall sales process and how they compare to other definitions like contact and deal.
What is a prospect?
Simply put, a sales prospect is an individual who is a potential purchaser of your product or service. However, a prospect has not yet engaged with your company or entered the sales process. Essentially, a prospect is a member of your total addressable market, fits your ideal customer profile, and has the means to purchase, but has not been engaged.
What is a lead?
A sales lead is a prospect who has successfully engaged with your company’s content or sales process. Leads are people who are potential buyers that are known to your company, have consumed some sort of content relating to your products or services, and have entered the top of your sales funnel.
What is a contact?
A sales contact is the next step in your sales process. After a lead engages with your sales content, as well as possibly even speaks with one of your sales reps and expresses an interest in purchasing your product, they become a contact.
What is an opportunity?
Once a contact engages with your sales team and expresses interest they should be qualified by a sales rep. If they are determined to be a qualified contact who would fit well as a customer, a sales contact officially becomes a sales opportunity. They then received dedicated attention from an account executive who attempts to win their business. Within an opportunity, there can be multiple contacts.
The difference between prospects, leads, contacts, and opportunities
Each term refers to the specific stage of the sales funnel that the person is in. As a particular individual progresses through your sales process, they are deemed different names to indicate their position and status. For example, someone at the top of the funnel is always a prospect, and a contact is always a qualified customer.
Since each term represents a different stage of the sales process, each individual may be handled differently by sales and marketing. As someone begins as a prospect and then becomes a contact and/or opportunity, the amount of personalization should increase. You likely have far more prospects than contacts, therefore automation is used to reach large swathes of customers with a personal touch, but should be avoided when communicating on a one-to-one basis.
This is where a CRM can help you keep the right balance between automation and personalization. Instead of sending out the same message to all contacts, you can manage customer segments from one place. Keep track of individual contact needs, and provide them with value when it’s most relevant. For example, if a lead mentions a specific challenge during a sales call, you can provide fresh content that provides relevant insights, which in turn positions you as a trusted advisor.
How prospect, lead, contact, and opportunity are used
To better illustrate the progressions, let’s consider the path of a hypothetical customer, Cam.
Cam Customer starts as a prospect. It may just be a name, company, and phone number in Salesforce. He could be a member of a list your team got from a tradeshow, a webinar, sales intelligence tool, LinkedIn, and so on. Cam may have not even heard of your company before, but your team has targeted him as a potential buyer.
Becomes a lead…
Cam begins to receive emails from your marketing team, opens a few, and eventually heads to your website where he fills out a form and downloads content. He’s now officially a lead. Your sales team targets him for more involved outreach, like cold calls or personal emails.
Becomes a contact…
One of your sales reps calls Cam and he answers. They have a great discussion and Cam exceeds all of the requirements to becomes a customer, maybe exhibit some buying signals and even display interest. Cam becomes a qualified contact.
Made part of an opportunity…
Since Cam is qualified and has an interest in buying, your sales rep decides its best to pursue a deal with them. Cam is deemed made a member of an opportunity.
Use these terms and meanings in order to create universal definitions that you can use to get everyone on the same page and streamline your sales process.