Prospect vs. Lead vs. Buyer Signal The Differences
Most people working in B2B sales know the concepts of prospect, lead and buyer signals. What the words really mean and what sets them apart, however, is something that a lot of people are not aware of.
One reason for this is that different CRM and marketing automation providers use these terms in different ways. Therefore, once and for all, we will now go through the difference between the terms: prospect, lead and buy signal and explain what role they play in the sales process.
A well-functioning collaboration between the sales and marketing department requires that all the people who work within these departments use the same language to ensure there are no misunderstandings.
What is a prospect?
A prospect is a potential customer that matches your description of the perfect customer. A prospectus can be either a contact person or a company. Sellers often use a sales intelligence platform (a company database enriched with information from open and public data) to find prospectuses.
What is a Lead?
A lead is a person who has in some way interacted with your offer by showing interest in your product, service or the sales or marketing material you have produced. Leads are usually generated primarily through a marketing automation system.
A lead differs from a prospect in that the company that makes the lead or the company where the lead come from do not have to match your description of a perfect customer.
Also, when a person is a lead, it is not certain that these individuals have the mandate to make a purchase decision for the company where he or she works if it is a company. In other words, the fact that a person within a company is a lead after downloading an ebook from your website does not always say something about how likely it is that the company will become your customer in the near future.
What is a buy signal?
A buy signal is an event in an organization that either a) make the client match your ideal customer profile, or b) gives you a well-founded reason to contact a potential client that already matches your ideal customer profile with a specific offer now. In order to monitor events that constitute purchase signals at companies, sellers mainly use sales intelligence services. Another more time-consuming alternative for monitoring purchase signals is to follow reporting in selected media and subscribe to updates on your prospects websites (if it is a company).
Where do prospects, leads and buy signals fit into the sales process?
Where and how the prospect, leads and purchase signals fit into a company’s sales process depends largely on whether the company focuses primarily on inbound and / or outbound.
The sales process for companies that primarily work with inbound usually starts with a lead. The goal of the company’s marketing and sales team is here to take the lead forward in the buying process in order for the person or company that constitutes a lead to eventually become a paying customer.
Sellers who work for a company that primarily works with outbound or with a combination of inbound and outbound often monitor a large number of prospects while actively working on prospecting (search for more people or companies that make up prospects). When a prospect sends out a buy signal, a seller can act quickly and offer a solution that fits the prospect’s newly emerging needs.
On a scale from best to worst, these words can be ranked like this: buy signal, prospect, lead.
A lead is in many cases either not interested in buying what you offer or your offer does not fit the company or person in question.
A prospect may look like a perfect customer on paper, but the timing may be completely wrong. For example, if you work with recruitment in the IT sector, a large IT company is a good prospect for you, but if the company just announced they will do large savings, it will never buy your services now.
A buy signal from a prospect that matches your description of your ideal customer profile is worth gold. The purchase signal enables you to appear as a rescuer in need by delivering an offer tailored to the prospect’s current needs.