In Lead Scoring and Segmentation, Marketing and Sales Alignment

As marketing rapidly evolves with marketing automation and predictive lead scoring, metrics and definitions evolve. Lead and Prospect are two words we hear a lot in marketing and sales roles but they very rarely mean the same thing. From company to company, even within the same company in different departments, prospects and leads are constantly defined differently.

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It’s actually critical to both marketing and sales success that these have a clear, measurable meaning. For example, within ReachForce, we talk about Marketing Qualified Leads, Sales Accepted Leads and Sales Qualified Leads. We don’t use the term “prospect” as an item we measure, but in conversation we talk about sales prospects all the time.

There’s a reason it’s so important: as leads flow through your marketing campaigns and hit “success” steps and move over to sales, each member of the marketing or sales team is responsible for some number that drives the right amount of predictable marketing and sales success.

For example, a marketing qualified lead or MQL might be regarded as someone in the right sort of role at the right sort of company, plus shows some behavior (clicking in an email and downloading a whitepaper, reading about one of your solutions) that indicates they are ready for sales. We create a predictive lead scoring matrix and once the lead hits the score threshold (for us, 100) , they hit an MQL stage and our marketing automation system alerts sales. An MQL is a checkmark for marketing against our targets. These MQL score items are carefully planned and plotted for the most likely predictive indicator of a good potential customer, and are part of what makes marketing automation so popular.

A Sales Accepted Lead “SAL” is one where sales contacts an MQL, and decides, yes this is a lead sales should work. The lead may then go through budget and readiness qualifying to determine if this is a sales qualified lead “SQL” that should be worked to a closed/won revenue opportunity.

It’s also important to define what is not a marketing qualified lead – in our case we look for role fit, company fit, and some interest indicators. That’s it. Determining available budget or whether a decision to purchase have been made, those are sales lead questions. Make sure that if you are being measured by your contribution of MQLs that you and your boss have the same definition. In companies where this has not been well-defined, leads and prospect definitions should be so there is no confusion.

So what about prospect? For us, it’s a generic word for a potential customer and can mean someone anywhere on the marketing or sales step of the revenue funnel, or even someone we haven’t engaged with yet. But other companies may – and often do – have different definitions. Still confused? Read on to see how other B2B leaders define these terms.

Dean Cruse, Internet/enterprise software VP of Marketing @deancruse:
Prospects are people who have shown some interest in your product or service, either by responding to a campaign, finding you through an inbound link, organic search, etc. They could also be subscribers to your blog, followers to your Twitter account, etc. who have an interest in your company’s point of view, or the market you serve. They could also be existing customers for one/some of your products who could be prospects for additional products. Prospects have opted-in to your message – until then they are just contacts on a list.

Leads can also come in from one of the above sources. Prospects can also be nurtured into leads through a variety of content-related programs (blogs, whitepapers, newsletters, events, articles, …). A lead is a person that has been qualified to a point where a sales person can take it over to work. Sales and marketing must agree on the definition of a qualified lead and it will vary based on the business.

Brande Bradshaw, Strategic Enterprise Sales Executive @bcoltb:
A lead is not yet a prospect.  Leads are people who you have some information on, you think they could potentially be a good fit, needs nurturing, someone you are cold calling and emailing with relevant information to get a meeting.

A prospect on the other hand is someone you’ve had a meeting or initial conversation with and this person can be categorized as a good fit.  Still needs nurturing and some coaching but they are engaged and moving through the sales process.

Mike Pilcher, SaaS VP Sales and Marketing @mike pilcher:
A lead is an individual contact with a person at a company who has the potential to purchase, or influence the purchase of your product. Usually in-bound focus.

A prospect is a company that has multiple stakeholders (hopefully represented by multiple leads) with the potential to purchase your product. Usually outbound focus.

In both cases a “lead” and a “prospect” are proxies for deeper definitions that change with your business cycle. Any definition needs to be company-specific incorporating concepts such as sales cycle, budget, existing customer, new product, product value, etc. @jonmiller2

Jon Miller, SaaS VP Marketing @jonmiller2:

This webcast from Marketo (presented by Jon) is actually what got me thinking about this.  Check out Marketo’s definition of each and be sure to watch all of this 45 webcast; it is PACKED with great information.  It’s worth your time, I promise.

Interesting…Which one do you agree with?  Or what do they mean to you?  And would your marketing and/or sales counterpart have the same definition?  Please share your thoughts!

 


 

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Showing 5 comments
  • Keith Bossey

    Great question. This came up as we were rolling out CRM. In my estimation, a prospect relates to a person that needs to be educated and nurtured. A lead is the precursor to an opportunity. A lead is the result of an inquiry from a prospect, that when properly qualified, turns into an opportunity or not. This is my definition, and judging by the wide range of answers from people better qualified than I, it doesn’t seem that I’m right or wrong.

  • Amy Hawthorne

    Hey Keith,

    I don’t think there is a universal definition for either. So you’re not right or wrong. :)
    Each organization must decide and agree upon what a lead and a prospect mean to them. This is the only way to ensure marketing and sales are aligned and working towards the same goals.
    If nothing else it’s interesting to ask your marketing or sales counterpart what each means to them. Does everyone have the same definition?

  • Don Beeson

    Hi Amy

    A lead is something to follow up on. They come from different sources had can be categorized by type (Open, Working, Nurturing, Dead) but have some attributes of a company you can serve and serve well.

    A prospect is a “sales ready” lead that has been converted to an opportunity where there is some indication of Need, Authority, Time line and Budget.

  • Apoorv Parijat

    Just done watching the Marketo webcast Jon has linked to. Amazing piece. Definitely going to buy the book.

    Thanks

  • Khushroo Lal

    like a brief and best till date description….. thank you