Of course, the basic premise is that each term relates to how far through the sales process a non-customer is and what lead nurturing still needs to be done to turn them into a Customer.
The problem is their meanings overlap based on who you speak to and when you speak with them. What is a Lead and how it is different to a Prospect? When does a Subscriber turn into a Lead?
In this post we’ll clarify the differences between the terms and provide a simple, practical, working baseline that you can use to clearly define them in your business.
First a Little Background on the B2B Sales Process
Impulse buying is rare in the B2B sales process. Almost all purchases will be Considered Purchases because of the financial and business impact of making the wrong decision.
For considered purchases the following elements must to be in place before a sale will be made:
The need for the purchase must be explicitly acknowledged by the prospect.
No matter how much you know or believe that company x must have your widget y to succeed, if they do not explicitly agree, you cannot make that sale.
The timing for the purchase must be now, or at least known.
Most (all) businesses have many more things they’d like to do than the time or money to complete it. Your purchase must be near the top of that priority list.
Note that these are two elements in the BANT qualification process (Budget, Authority, Need, Timing) and they are critical in moving a prospect from one stage to the next.
The Five B2B Sales Stages
The five stages in the B2B buying process are:
- Subscriber = Visitor + Contact Details + Permission to Contact.
- Lead = Subscriber + Potential Need
- Prospect = Lead + Acknowledged Need + Acknowledged Priority
- Customer = Prospect + Commitment
Let’s dive into each in more detail.
What is a Visitor?
A Visitor is someone you don’t yet know anything about.
‘Visitor’ is really a website specific term but you should consider a Visitor anyone your business comes into contact with where you don’t know their name or anything about them.
Here are some examples:
- Someone who arrives at your website but doesn’t leave their contact details.
- Someone who talks to you at a tradeshow booth but doesn’t give you their card
- Someone who calls your business and doesn’t leave their contact details
What is a Subscriber?
A subscriber is a Visitor whose name and contact details you know, and has consented to be contacted by you.
Your goal for Visitors is to turn them into Subscribers.
At this point, you don’t yet know if they are a good fit for your business. You just know they exist.
Consent laws are different all over the world. But in Australia, anyone who willingly gives you their contact details has also provided implicit consent to be contacted by you.
Examples of Subscribers are:
- Someone who has downloaded content from your website
- Someone who has provided their business card at a tradeshow – providing a business card is implicit consent to be contacted
What is a Lead? (also called a Marketing Qualified Lead or MQL)
A Lead is a Subscriber that could conceivably buy your products or services. That is, they are the right fit for your business, now or in the future.
Subscribers turn into Leads by, explicitly or implicitly, indicating they are a good fit for your company.
You can use several approaches to make this determination.
This is where you score different elements of the Subscriber’s behaviour or demographics and convert them to Leads when they meet some threshold.
- Demographic: Their job title: “Student”, “CEO”, “Head of Sales, etc.
- Behaviour: What they have downloaded, etc.
Manual data review
You goal for Leads is two fold
- Educate them about the problems they perhaps don’t know they have, which you can solve.
- Stay engaged so when they are ready to solve their problem, you’re present and easy to contact.
Lead nurturing is the best way achieve both of these tasks.
What is a Prospect (also called a Sales Qualified Lead or SQL)
A Prospect is a Lead that (1) acknowledges they have a problem and (2) wants to solve it now.
The challenge here is to understand when they actively want to make a change that your products or services can deliver.
Again, you can make this determination in a couple of ways
- They view pages on your website that indicate they are ready to buy, e.g. pricing, about us, case studies, and other bottom of the funnel content pages.
- They take action by emailing or calling your business.
Your goal for Prospects is to further qualify them to confirm they have the budget and authority to make a purchase so you can create a Sales Opportunity.
What is a Customer
A Customer is a Prospect who has made a commitment to proceed on a purchase.
There are some old school business managers and business owners that would say someone is a Prospect until they have paid their invoice.
I’m a bit easier going, but in a B2B context, I would say someone is not a customer until they have made a definite commitment: signed the proposal or contract, provided their credit card, etc.
Verbal “go-aheads” are not enough and have a habit of falling through. I’ve even see signed agreements get delayed and never executed so you’ll need more than a verbal approval.
But what is an Opportunity (or Deal)?
In this list we’ve missed a couple of terms that maybe you were expecting: Opportunity and Deal.
An Opportunity is a specific business opportunity for which a Prospect has (or can get) an approved budget and is in the process of making a decision.
So a Prospect may have one or more Opportunities.
It’s at this time you should put them into your CRM as an Opportunity.