Every so often someone asks me, “What’s the difference between prospecting and lead generation?”
I believe knowledge is power, so I’m going to break both of them down so you can excel in both areas of your sales.
Let’s start with a couple definitions:
A lead is just a name and some variety of contact information.
It could be a connection through social media, it could be an email, a phone number, an address… But that's all lead is: somebody and some way to get in touch with them.
A prospect on the other hand is derived from the idea of a prospective customer.
A prospect is somebody who is a prospective customer for you. An individual who has some level of qualification going on, indicating they have a higher likelihood of wanting to actually purchase from you.
Now let’s get into the details...
Lead generation is often more passive or a shotgun approach than prospecting.
It's research to find lists of potential individuals, setting up opt-in funnels, or putting out content to attract people to you. And you can get more qualified leads if you set up the right kinds of strategies (Giveaways in exchange for information are great as long as the giveaway will only attract the ideal client). However, generation is often a matter of going out and finding people you can reach out to as prospects.
You can buy lists of leads as well. I find those are typically a waste of time and money no matter what industry we’ve tried them.
Networking is also a great lead generator, but again, tends to be a bit more scattered. You don’t necessarily know who will be in the room when you show up, so while it’s less passive, it’s also less focused.
Side note to this.
If you're going to go networking, don't be a douche about this.
Don't just grab everyone's cards and add them to your mailing list and start doing outbound marketing to them! They’re not necessarily interested in you marketing to them. These are people you met once, so instead of just adding them to your mailing list, set a meeting. Get to know them, or ask if they would mind being added to your mailing list before you just go and add them. Otherwise you have leads going nowhere, not prospects and you'd much rather have prospects on your mailing list.
On the other hand, prospecting is more sales-oriented and focused. While lead generation is oftentimes one-to-many, prospecting is more one-on-one.
Prospecting is having an ideal client profile, going through your leads and reaching out to the ones that have something in common with your ideal client profile. Prospecting is reaching out to actively attempt to set the appointment. Prospecting is going out or reaching out to actively target an office or company or consumer who matches your ideal customer profile.
PS. Reviewing your list of leads & discarding them one after the other and not calling anyone because they don’t fit your perfect idea of a prospect is not prospecting. It’s wasting time. Get off your butt!.
When you are prospecting, you're taking your list of people who said they are interested and selecting the individuals who match your client profile most closely. Then you actively reach out to them: send them an email, call them, drop a card in the mail. The whole point is to try and start a conversation.
Prospecting is usually a two-way communication. They give you feedback and you give them additional information so you two can determine the next step together (usually this is getting them into an appointment).
Understanding the difference between Lead Generation and Prospecting gives you more understanding of where you're at in your sales process.
When you're in lead generation, you're a step further removed from actually getting the sale. Whereas, when you're in prospecting mode, you've already done some qualification and you're starting to try and move this person into an actual sales appointment because you know it will be a worthwhile appointment. Too many sales reps leap into appointments with anyone and everyone and cut prospecting out of their vocabulary. That’s a mistake and a massive waste of time.
When you set out your calendar for the week, I want you to break the two time periods out. What time are you going to spend in lead generation?
What time are you going to spend prospecting?
For most sales people, closing is rarely the biggest problem they have. A lack of adequate prospecting activity is usually the problem.
The problem is usually a lack of enough high level prospecting activities.
So where do you fall on the scale if you don't have enough sales?
Are you doing enough prospecting?
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