What does Lead, Prospect and Opportunity mean?

All these terms are important parts of the Sales Cycle – start with understanding what they mean, how and when to use what.

  There are a lot of terms and words in sales that sometimes need to be clarified. Some terms are very commonly used, but sometimes interpreted in different ways. This may lead to misunderstandings and messy data. Lead, Prospect and Opportunity are all terms connected to the Sales Cycle. They are all used to define where in the Sales Cycle we’re at.

Firstly, what is a Lead?

Leads are people or companies you’ve not yet qualified into being potential customers. An easy way to describe when it’s a Lead is when there has only been one-way communication between the Lead and your company. Either the Lead has reached out to you but you have not yet reached back, or the other way around.

The goal with a Lead is to establish a two-way communication and to qualify the Lead – which then determines if the Lead will make it into a Prospect or not.

Secondly, what is a Prospect?

A Prospect is a former Lead that has been qualified as a potential Customer. There should always have been a two-way communication where you and the customer have had a conversation in some way, and where that conversation then has lead you to quality the Prospect.

Why separate Leads and Prospects? Separating Leads and Prospects like this makes prioritizing easier and adds a qualification step to your Sales Cycle. Also – who wants their CRM to be cluttered with companies and people that are not qualified Prospects? Probably no one. So, if you have a sales team that spends a lot of their time chasing new leads –  we recommend looking at a CRM that separates Leads from Prospects and Customers.

Here’s a good one to check out 🙂

Finally, what is an Opportunity?

An Opportunity is a potential deal. The Opportunity tells us that we have identified a need to buy soon. Opportunities are found with Prospects and/or Customers and it’s the Sales Teams job to find as many Opportunities as possible. When an Opportunity is initiated, the Sales Team puts them into the pipeline and strive to close as many of them as possible as won. The Opportunity is the next step in the Sales Cycle after qualifying a Lead into a Prospect, since a Prospect only tells us they are a potential customer – we need the Opportunity to tell us that the Prospect is in the process of buying right now.