Like many business processes, prospecting and lead generation share enough similarities that they can look like the same thing from the outside. If you work in sales or marketing, though, then you know that this couldn’t be further from the truth.
Sales team's prospect and marketing generates leads. These functions can work together but they each have nuances that allow a business to optimize both operations.
To explain this, first, we need to understand the difference between prospects and leads.
Leads and prospects are not the same things. They both refer to potential customers but they’re actually at different stages in your buyer’s journey.
Prospects are the widest pool of potential customers. They haven’t expressed any interest in your business. However, there has to be a qualifying factor, like a list of emails that match your key demographic or a B2B contact list in your target market.
Prospecting is used by sales reps and consultants to establish first contact with customers in both B2B and B2C scenarios. For example, if a consultant starts a social media conversation with another business and then arranges a follow-up meeting, that’s successful prospecting.
Utilizing effective cold emailing software streamlines the initial outreach process, allowing sales teams to personalize communication at scale and enhance prospecting efficiency significantly.
It’s called prospecting because it’s a little bit like panning for gold. If you’re cold-calling, you’re sifting through rejections to get to the “gold nuggets” that are your viable customers. There’s often a low conversion rate for prospecting tactics like cold-calling & emailing.
The entire role of marketing is about funnelling people with a need for your product into your sales pipeline. Lead generation is the process of pre-qualifying these customers, and then moving them into the sales funnel.
These leads are passed on to sales teams, reps, or consultants to follow up and close deals. Lead generation is often automated via online advertising, email campaigns, social media marketing, or even live chat outsourcing and more.
The defining factor of a leader is that the customer has expressed an interest in your business. This could be by visiting a webpage, filling in a contact form, responding to a marketing email, and so on.
The main reason that people get confused between prospects and leads is that the terms are often used interchangeably. This gets even more confusing when the terms “warm” and “cold” are introduced.
In sales, “cold” refers to customers who have not had contact with your business. “Warm” means those who have. You would think that this means prospects are cold and leads are warm. Yet, you’ll often hear people refer to warm leads and cold leads.
Since prospects and leads are often separated between sales and marketing teams, the teams tend to separate the groups in more granular ways. So, in sales, you get terms like “warm prospects” (Prospect groups with a high likelihood of conversion).
Marketing, too, has its own terms. You might hear about “cold leads” (Leads that have expressed any minor interest, like viewing a product page.) It makes sense in context but it can get confusing when you don’t know the differences between prospecting and lead generation.
The more interest a lead shows in your business, the more valuable the lead is to your sales team. Effective lead generation should also qualify leads as far as possible before they are passed on.
Lead generation strategies tend to be data-driven. They use real-time business data to optimize marketing campaigns according to the business objectives. This means that campaigns can be set to generate high volumes of leads, lower volumes of higher quality leads, or to balance both.
Marketing teams will rarely use just one method to generate leads. Let’s look at a common scenario to see how a lead generation strategy comes together. Imagine your business manages servers for B2B clients.
On your blog, you post a thought leadership article about the difference between on-premise vs. cloud-based hosting options. Then, that page links to a downloadable whitepaper on cloud-based systems. To download, the customer has to register their email address.
That email address is now a qualified lead. Not only did they read the article, but they also wanted to know more about the cloud-hosted servers you manage. Of course, that article would also contain links to product or service pages, giving customers a direct way into your pipeline.
You can see from this example that lead generation has many moving parts. The best practices for your business will depend on your market, your product, and your core audience.
No matter what industry you operate in, these four steps will help you get the most out of your lead generation efforts.
This is key to any online content creation. Whether you're talking about a landing page, a blog article, tutorial videos, etc. SEO matters. Your rank in Google’s search engine algorithm will largely determine the volume of organic traffic you can expect.
Forgetting about sponsored ad content for a moment, the first three listings on a search result page (SERP) will take the biggest share of traffic. After this, traffic volumes drop off sharply. This graph shows click-through rates based on SERP position for branded & non-branded terms.
Click rates for position one start above 30% at their highest. After position three, we’re dropping below 10%. As you can see, anything that appears after the first page of results is getting almost no returns. Not all search terms are equal though.
Long-tail search terms contain four or more words. If you’re looking for higher quality, rather than higher volume, traffic. It can be more effective to target these kinds of terms. Customers searching for longer phrases are often further along the buyer’s journey.
What’s interesting about lead generation is that long-tail terms get more effective click-through rates (CTRs), compared to generic terms, as you move down the first few search positions. That’s because these terms are more niche, so they’re being used by customers with a higher level of interest.
Targeting these terms is a form of pre-qualifying leads. These kinds of leads will be easier to convert from your landing pages due to higher engagement. This means that this kind of traffic will give better conversion rates compared to higher volume generic traffic.
Ad campaigns are not an exact science and not every campaign will succeed. Targeting your advertising to specific audiences can increase engagement and send more qualified traffic your way. For instance, when marketing an office space in NYC, you will need to use target keywords such as “office space New York” or target the audiences who are locally residing in the area.
According to stats from FinancesOnline better targeting leads to up to 50% increased success rates for lead generation.
Creating a lead magnet is a proven way of collecting qualified customer details. A lead magnet is an asset like an eBook, market research report, or something similar that is free to download. Downloading requires the customer to register an email address though.
In the lead generation example, we talked about earlier, the whitepaper would be a lead magnet. The advantage of these free assets is that you know any email addresses collected come from customers with an interest in the topic.
This kind of pre-qualifying is highly effective for converting customers to a related product or service. If you address common pain points in the content that your product has the solution to, then you’ll be driving highly valuable pre-qualified traffic to your sales team.
A lot of the lead generation process can be automated once you’ve defined a strategy. Using the right software can lead to a much higher return on your investment. Leadfeeder, Hubspot, Salesforce, all the biggest marketing automation names have lead generation options.
These programs collect information about visitors to your site passively. This can remove the need for long-winded signup forms. You can then integrate this with your CRM system to create customer profiles for lead generation and ad targeting.
Having this kind of data integrated into your records management can give you much deeper insights into customer behaviours. Taking into account feedback alongside your customer satisfaction scores will let you refine this process as you go. For best results, remember to follow best practices to collect customer feedback.
It all starts with your ideal customer profile. This will be different for each business. Sales prospecting is all about defining the characteristics that make someone likely to have a need for your product.
These can be either very broad definitions or more narrow customer niches. Think about a SaaS business offering testrail automation software.
A simple list of business emails could be prospects. A list of emails of current SaaS customers would be more effective, though.
There are some general questions you can ask to start narrowing down potential customers. In the B2B scenario above, you might ask “Is the prospect a decision-maker?” Then you could narrow it down further by asking “Does the prospect have pain points that our service can solve?”
The more you narrow down the list, the more likely you can convert that prospect. Of course, to get more granular detail you’ll need more in-depth market research. Remember that prospects haven’t shown any interest in your business, so you’ll be making first contact.
This makes the process of prospecting much more hands-on than lead generation. You need a sales rep or advisor to make contact and develop a business relationship with the prospect. Then, they need to nurture that prospect through the buyer’s journey to conversion.
This will require multiple conversations, meetings, product demonstrations, etc. It’s not a one-size-fits-all approach, so you can’t rely on automation for the most part. Technology can still be helpful but having reps who know how to start a business relationship is key.
Building effective profiles is only one part of prospecting. Your sales team also needs to follow through with those prospects and convert them into customers. These four techniques will help you with successful prospecting.
In B2B sales, networking has always been the most effective method of growing your customer base. With the rise of social media, a must-have element to your branding strategy, all sales teams now have access to easy ways of networking and automatically sourcing prospects.
Platforms like LinkedIn offer intuitive sales tools that can group contacts by specific criteria. You can tune the software to your perfect customer profile and go from there.
Using these tools together with other social platforms can help you get to the decision-makers in a business.
According to research by Gartner, 88.9% of businesses use two or more sources of social media contact data. Often, single platforms like LinkedIn provide a lot of user profile information but not the necessary contact information. However, you can pair it up with a LinkedIn automation tool to help you manage contacts more efficiently.
At the same time, you can learn more about the prospects and their specific needs and interests. You can even identify secondary marketing opportunities like what are the best niches for affiliate marketing.
Most of the time, your business will have more than one product or service. At the very least, your one product will have different use cases. Separating your prospects by demographic or other key criteria can help you get your services in front of the right people.
Knowing more about each category of prospect allows for deeper personalisation in sales emails and offers. Even just including a recipient’s name in a subject line on your cold email outreach sequence can increase email open rates.
The deeper your personalisation goes, the higher customer engagement you can expect to see. Think about how marketing emails from Amazon use your customer name and suggest products based on your order history. Personalized content can help your business connect with clients.
Prospecting isn’t about pressure selling. In fact, it’s the complete opposite. The harder you try and sell in your initial contact with a customer, the faster you’ll push them away. Especially in B2B, decision-makers are used to generic sales calls and persuasive techniques are ineffective.
If you get to know more about your customer’s needs before you start selling, it’s easier to match them to a relevant product or service. You can then pursue the sale by addressing the customer’s existing pain points and providing a solution.
Sales reps often cite cold-calling as one of the most difficult aspects of sales. There’s a variety of reasons for this. The intimidating factor of making contact with someone who might not appreciate it, the psychological toll of rejections, etc.
Eventually, we learn to deal with these problems and push through to the valuable calls. Yet, there are ways to make cold-calling less cold. Building effective customer profiles, making first contact via social media channels, and pre-qualifying leads can all make cold-calling easier.
The key to making both your sales and marketing efforts work in harmony is having an integrated system to track customer data. When the two disciplines work together well, you create a positive feedback loop for your business.
Better marketing brings in better leads, personalised sales lead to more satisfied customers. Satisfied customers are more engaged with your business, which boosts future marketing efforts.
To keep it all working smoothly, it’s best to have a CRM system with neural network implementation to keep centralized records of your customer data. Giosg lead generation chatbots and live chats can be integrated into your CRM seamlessly and securely so that all the customer data is accessible to every team member on any device. That way, both sales, and marketing can work together to build up customer profiles and make use of the results.
Despite the key differences between prospecting and lead generation, these are closely related processes. Both marketing and sales affect client sourcing and client retention meaning that bringing both departments closer will help as you grow your business.