Understanding the Difference Between a Sales Lead and Prospect

Sales teams are the lifeblood of any organization. Whether large or small, businesses rely on sales. Seems like an obvious thing to say, but closing sales is also one of the hardest things to do. We could talk all day about marketing qualified leads (MQLs) or sales qualified leads (SQLs). But the primary goal must be focused on getting leads and prospects into the sales funnel.


Leads and prospects are ubiquitous terms used in marketing. However, when it comes to defining them, most of us get it wrong. More often than not, the words are used interchangeably, which should not be the case. If you do a quick Google search on definitions, you will be surprised how many sources fail to provide clarity. So first, we should distinguish between the two, so you can approach demand generation from marketing the right way in order to create marketing campaigns that aim to attract leads and nudge them through the sales funnel.****

What is a Sales Lead?

Lead generation is critical to sustained success and growth of all businesses. Typically, generating leads is the first step in the sales process. The easiest way to get our heads around the term is that a lead is at the start of the journey. A lead is someone who may be interested in a product or service that you provide, but you have no context as to what or why. And you certainly do not know when a sale is likely to be made.

Indeed, you probably do not have any information beyond perhaps name and email address. But you could be lucky and have location, age, sex, and job information! This is a basic lead, but they are also known as sales-qualified leads—leads that have been qualified and even profiled by your sales team —an SQL.

These leads have often been checked and verified by one of your sales teams. They ascertain whether they have a genuine need for your product or service and determine whether the lead is ready to be contacted by a sales representative to, ultimately, close the deal.

The most common type of lead that all businesses have is someone who has clicked through to your site and then entered their details into a data capture form such as a contact us form.

Typically, leads have been communicated to en masse. Campaigns are directed specifically to its target audiences through social media, email marketing, integrated campaigns, and more. From that campaign, an individual has likely clicked through to a website and provided some contact details.

To sum it all up: A lead is a person who has provided at least some basic information that suggests a potential interest in buying from you.

The main objective, once you have a lead, is to focus on learning more about them. This could be through enticing them into some form of engagement with you (two-way communication) and converting them into a prospect.

Who is a Prospect?

The main difference between a lead and a prospect is that your lead has moved beyond one-way communication and has now engaged with you. Such two-way communication suggests that the lead has real potential to buy from your business. This is when the lead becomes a sales prospect.

But let’s take a step back. A prospect, by nature of the term, is someone who has the potential to develop into becoming a customer. This is signaled by two-way communication: they respond to something you send them, such as an email, a phone call, or a good old-fashioned mail drop!

A prospect is a potential client who has shown interest in your goods or services. Ideally, the prospect has some challenges that you can leverage to create value, or conversely, disqualify them if they fail to perceive the value you intend to create.

The typical journey an individual goes on to transition from being a lead to a prospect is that the lead is nurtured down the sale funnel through a communication back from the business to entice them to respond further. Should the lead choose to respond to this additional contact—such as email—then the lead becomes a prospect as they have initiated two-way communication.

The main difference in the communication methods is that while a lead is one-to-many, a prospect involves one-on-one two-way communication.

Differentiating Between Leads & Prospects

Now, having defined a prospect and a lead, it should be clear that they are quite different in the sales process. Therefore, logically your marketing approach for the two cannot be the same.

As a marketer, it is imperative for you to understand that a lead has not attained the status of a prospect. Therefore, you have to skew your marketing activities to suit them. There is no blanket marketing approach for sales leads and prospects. Overall, the goal should be to progress a sales lead through the pipeline to become a sales prospect—it’s about sales and marketing aligning and working together. However, generating leads in the first place is often the hardest part, no matter what lead management process you follow!

For you to determine if a lead is a prospect, you have to qualify them before making contact. Do they fit specific criteria that you have pre-determined to ensure that they are right for your business? For example, you may require individuals to be from a certain industry, or be at a company of a certain size with a minimum annual revenue before reaching out to them. Falling below these thresholds could make the effort you put in to convert them pointless as they would never be interested in buying from you.

Typically, this may involve targeted and personalized emails (perhaps through an email marketing campaign), a meeting, and phone calls. For prospects, you have already realized their challenge and determined that they are sales-ready.

Simply put, for the lead, you aim to determine their challenge to make them interested in buying from you. For the prospect, the goal is to close a sale.

How Should You Approach Each of Them?

While we understand your need for persistence with your prospects and leads, you must also be aware that there is a thin line between being annoying and persistence when communicating with them. Therefore, you must determine that the person you are dealing with is the right contact—a decision maker—and then you can determine what level of persistence is required.

Persistence, when used in the right amount, can transition a lead to a prospect. Equally, persistence can also convert a prospect to a sale.

On the other hand, persistence can also be an obstacle for both the lead and the prospect. If you act too desperate or chase them to the extent of annoyance, that can be a turn-off for your lead or prospect. Lead management is critical to filling your sales funnel and generating sales for your business.

As a marketer, you must understand the peculiar needs of leads and prospects. If you are dealing with prospects, then you have to emphasize the benefits. Getting this wrong can cause friction between sales and marketing when you should be looking to align sales and marketing!

Identifying the Needs of Leads & Prospects

Remember, you have already identified the needs of the prospect. So, you must demonstrate what tangible business value you can provide them.

For leads, you must ensure that you are dealing with the right person. Remember that not everyone in your database will automatically become a prospect. A lead has simply identified themselves as someone who wants more information. This is where you must ensure that your database is up-to-date. Your CRM software allows you to segment your audience and identify those leads that require more research.

However, when handling a prospect, the essential criteria to use is to ascertain the stage of the buying process of the prospect:

Clearly understanding these questions will enable you to determine the amount of follow-up and persistence required.

Differentiating for Success

Numerous articles have been written on sales leads and sales prospects, but the most important thing a marketer must remember is that the two are at different stages of the sales process. Therefore, the marketing strategy must be tweaked to favor the stage they are in lest you lose a sale. Most of the time, one leads to the other, and your campaigns should seek to nurture and convert leads into prospects.