The Difference Between Prospecting and Lead Generation and Why It Matters for Your Sales Team
There exist multiple client acquisition methods that allow for a steady influx of new business leads. Although B2B sales lead generation and prospecting are united by a common goal, they aren’t synonymous. These terms differ according to the strategy appliоed behind each of them as well as the ways of their implementation.
Here’s the main difference between prospecting and lead generation.
Prospecting aims at driving short-term results, such as appointments and sales. It’s a quick way to close a new client, which is efficient if you have a thin pipeline.
Lead generationembraces a variety of steps, aiming to cultivate long-term relationships with your potential clients. It focuses on creating interest in your products and services by interacting with the leads and supplying them with useful information. As a result, leads get in your sales funnel and turn into loyal customers.
Learn more about the aforementioned activities by investigating each of them separately.
A B2B sales lead is a person or company that might become your customer since they previously showed some interest in your offer.
Leads usually provide their contact details in exchange for the unique content published by your firm. Such an approach allows them to access specific information to solve their business needs. Thus, if they manage to benefit from your data, they will be likely to come back again to make a purchase or order your services.
Defining Lead Criteria
It's essential to determine the lead’s willingness to make a purchase. Find out whether your potential customers are hot, warm, lukewarm, or cold with the help of the lead qualification criteria mentioned below.
Why lead criteria matter
Even if your audience has revealed interest in your product or service, there is no guarantee that their intentions are serious. As it is very difficult to predict whether your leads will buy from you, it is crucial to qualify them according to the criteria mentioned above.
How to decide on specifications
We’ve prepared a list of questions for you to define whether you’re communicating with the right lead.
Quantitative goal What targets is your company willing to reach by the end of the year and what is your top priority now?
The company’s previous steps What have you done to achieve your goals? Which approach worked best for you, and what strategy proved ineffective?
The company’s plans for the future What will be your next steps towards reaching your target? Are you going to develop a different approach to the strategies that failed to bring you the desired result?
The company’s resources Do you possess the resources necessary to execute your plans?
The company’s challenges What possible obstacles can hinder the development of your business? What will help you to make sure that you’ll succeed next time?
Remember, speaking about the possible challenges is essential to make your lead realize they might need your help. If they already tried a few things, but they didn’t work, don’t hesitate to make an offer right away.
Lead Generation Techniques
Business to business lead generation performs a marketing function as it solely focuses on collecting the contacts and growing customer base. Here are a few techniques to help you build strong relationships with your potential clients.
Invest time and money in effective lead nurturing Imagine a person asking their companion to marry them on their first date. Isn’t it absurd? Nevertheless, many businesses still lose an enormous number of sales opportunities due to a desire to profit fast.
If you want to be successful, spare no effort to nurture your leads consistently. Moreover, you are supposed to enhance your relationship at every stage of the sales funnel, not only at the beginning.
Develop top-notch content Everything you put out online should contain valuable information that can easily help your leads see tangible results. Use gated content to get their contacts and be sure to update your blog with interesting materials and practical advice regularly.
Remember that each publication you produce should correspond to your well-thought content strategy in accordance with the awareness stage of the buyer’s journey. Moreover, it’s essential to get social and become a thought leader in your industry to build credibility.
Send emails based on your leads’ preferences Come up with the content that perfectly matches your leads’ needs or increases their interest in your offer. For instance, you can send a series of email sequences to move them down the sales funnel.
Apply special tools and software to track their responses and analyze what materials they found most attractive. Such an approach will help you improve targeting and increase the ROI of your email marketing campaigns.
What is a sales prospect?
A lead that meets the qualification criteria mentioned above becomes a prospect. Such people or businesses have expressed their willingness to accept your offer in order to have their problems solved. It’s crucial to offer them an excellent solution at this stage and turn them into clients or postpone communication for the time being if they don’t make a purchase.
Defining Sales Prospect Criteria
Have you heard that 47% of SDRs in North America considered getting feedback from a prospect their #1 challenge? Although these motivated individuals are already interested in your offer, not all of them will become your clients. The following criteria will help you to sort out the best candidates.
Why prospect criteria matter
The sales process isn’t easy, and prospecting is its most demanding part. According to a study conducted by HubSpot in 2018, 37% of SDRs expressed a similar belief. The fact is, losing a potential customer who used to express interest in your product or service is heartbreaking. Nevertheless, there are numerous reasons why this might happen, and they are usually far from inappropriate sales strategies.
For instance, most of today’s consumers are tech-savvy, so they prefer browsing the data independently before making a decision. According to CSO Insights, 45% of potential customers claimed that they wanted to do the research themselves without asking an SDR for help. Moreover, 95% of B2B clients are likely to investigate a company online before they buy anything. This means that modern salespeople should apply innovative approaches to convert prospects into clients.
How to decide on specifications
Use a BANT approach to estimate the quality of your prospects. Here are the crucial criteria:
Budget (can they afford your product/service?) Allocating a clear budget for the purchase means that your leads are ready to work with you.
Authority (are they a decision-maker?) Finding the main decision-maker(s) allows for a constructive dialogue when a salesperson is able to reveal the authority’s motivation to buy.
Need (does your offer directly address their pain points?) Aligning your offer with the lead’s most significant needs increases your chances to hit the target if you provide a great solution.
Timescale (what time is most convenient for your lead to make a purchase?) Establishing a clear purchase timeframe is essential if you are selling an expensive product, so find out when your potential clients can make a payment.
If your prospect fails to fulfill at least one of the aforementioned criteria, they aren’t going to become your customer. However, it's not necessary to part ways with them for one day, they might change their perspective and want to work with you.
Sales Prospecting Techniques
Despite the growing tendency to do independent online research, 60% of prospects are eager to contact an SDR during the consideration stage. Thus, becoming a top-rated expert in your field is a must since you should be able to answer a plethora of questions.
Sales prospecting techniques include calling, direct messaging on LinkedIn, personalized emailing, and asking for referrals.
1. Make a call to reach out
Did you know that circa 69% of prospects turn into customers after a salesperson calls them a few times? Indeed, a phone call can be a powerful sales tool if you use appropriate questions. Those aren’t typical sales scripts; those are more like conversation starters, engaging your prospect in a meaningful dialogue.
11-14 questions would suffice for learning about your potential client’s pain points, challenges, and desires. According to the current statistics, such a query can increase the odds of success by 74%. Be consistent and keep in touch with your prospects on a regular basis to change their status to “hot.”
2. Send personalized emails and messages
Take some time to investigate your prospect’s profile and write an email that will warm their heart. Don’t use mass emails since spam filters will most likely reject them. Personalization is a great way to attract your audience’s interest and create a desire to click on your offer. Indeed, 80% of customers prefer being contacted in writing. Thus, don’t disappoint them with a one-size-fits-all offer.
Of course, you can use ready-made templates, but make sure to adjust their name and brand. Impress them by specific content offering a solution to their problems. Also, show them how much you know about their niche and prove your expertise with a few examples.
Furthermore, it’s very important to launch mobile-friendly campaigns because a vast number of modern consumers read on the go. Additionally, you can apply direct messaging on LinkedIn to promote your B2B services.
3. Ask for referrals
Convert your clients’ positive feedback into more profit by asking them for a referral. They will be happy to spread the word if they are truly satisfied with your services. In the B2B world, 91% of buyersrely on word-of-mouth when looking for a good vendor, supplier, or partner. Thus, such an approach will not only bring you new prospects but also reinforce your reputation. While getting a referral is free, a sale closing ratio is from 50% to 70% in such cases, which is a gold mine.
As you can see, there’s a significant difference between prospecting and lead generation.
Lead generation is a marketing activity, while prospecting is connected with sales. Both of them work best when united by a well-thought strategy. When closely aligned, these activities bring outstanding results since they effectively move qualified leads down the sales funnel.
Apply lead generation in the following cases:
Building awareness of your products or services
Creating an interest in your offer among your target customers
Investigating the level of interest your leads currently express in your products or services
Building, maintaining and improving relationships with your potential customers
Testing various lead attraction methods, such as providing compelling up-to-date content
Gradually moving your leads down the sales funnel
Use sales prospecting in the following cases:
Exploring your prospects’ interest by offering them to purchase your services or products
Wanting to close sales as soon as possible
Working with a list of selected target clients waiting for a specific offer
Having a relevant value proposition perfectly matching your prospects’ expectations
Being ready to ask direct questions and responding to possible objections or even getting rejections
Select the right approach to create a pool of new happy customers by identifying and responding to their needs. Your sales strategy is supposed to include both prospecting and lead generation. Moreover, it’s important to avoid duplicating work in your sales and marketing departments. Try uniting their efforts so that they don’t tread on each other’s toes.
Remember, businesses that manage to implement such an approach are 67% more likely to succeed in closing deals than those that fail to do so. As a result, their client retention rates increase by 36%. Additionally, they enjoy sales closures 38% more often and experience 27% faster profit growth.
Need more information on the difference between prospecting and lead generation?Visit our blog to learn about sales prospecting and the most efficient lead generation techniques. Continue reading other posts from Belkins, such as:
Since starting his career in sales & marketing, Dmitry never stopped searching for new opportunities that can turn the tables on sales development and the ways that shape B2B relationships. He is always eager to share his findings with the audience.
Subscribe to our blog Get the ultimate insights on the B2B trends and hands-on tips from sales professionals. Receive updates on new articles and more.