In sales and marketing, lead generation and lead prospecting are vital processes that lay the foundations for the identification and nurturing of a progression of potential customers. While the two terms are regularly used interchangeably, they represent unique and distinct stages in the customer-acquisition journey.
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Lead generation is the first step in the customer-acquisition process. It involves the systematic engendering of interest, curiosity, and appreciation among a broad audience. The core objective of lead generation is to cast a wide net to capture extensive and diverse contact information. Its goal is to crowd the top of the sales funnel with a large number of potential leads who can be targets of the filtration and move along through the next stage of the purchase journey. These leads may have expressed some quantum of interest, but they are not generally to be viewed as ready to make a purchase.
Lead prospecting, on the other hand, follows lead generation. It is the process of qualifying and evaluating the leads generated. The goal of lead prospecting is to narrow down the list of leads by convertibility. This allows the sales effort to be prioritized on those with a higher probability of conversion. Lead prospecting involves: researching; analyzing; and scoring leads based on specific criteria, demographics, behaviors, budget, and timing. This process assists sales and marketing teams to focus their efforts and resources on leads that have a genuine interest.
This article will further differentiate lead generation vs lead prospecting in terms of goals, KPIs, and tactics.
What Is Lead Generation?
Lead generation lies at or near the start line of the marketing and sales process. It is designed to identify and attract potential customers. This results in potential customers/clients who are generally referred to as leads or prospects. These are individuals, organizations, or companies that have expressed moderate and internally unfiltered interest in sourcing a product or service.
Lead-generation activities often start by creating awareness about products, services, or brands. This elevated awareness can be delivered through several marketing channels such as: content marketing, social media, search engine optimization (SEO), paid advertising (PPC and more passive modes), and direct email marketing.
To learn more, see our full guide on Lead Generation.
What Is Lead Prospecting?
Lead, or sometimes sales prospecting, or simply prospecting, is a critical second phase in the customer-acquisition process, following lead generation. The word used in this context derives from the process of seeking in-ground resources to mine. All ground is equally interesting at first glance, but deciding where to dig is an evidence-based process that assesses the potential for paydirt before digging. Where lead generation involves capturing contact information from a broad pool of potential customers, lead prospecting is the process whereby the leads are narrowed down and evaluated to assess them to identify the most promising opportunities for ongoing effort toward conversion into paying customers.
Lead Generation vs. Lead Prospecting: Goals
Lead generation and lead prospecting are linearly related and distinct stages in the customer-acquisition process. Both have unique goals and objectives and only a narrow transition zone where they overlap. Lead generation goals are:
- Creating awareness about a product, service, or brand among a broad market attracts potential customers from a crowded audience. It aims to inform and guide these potential customers who may not previously have been aware of the offering.
- Serves in the gathering of contact information from potential leads: names, email addresses, and/or phone numbers. The objective is to initiate a reliable and preferred point of contact and to establish a channel for communication that the prospect sees as low-friction and to which they will be responsive.
- Cast the widest possible net to capture an extensive pool of potential leads. The focus is on quantity, where the quality threshold is targeted with an established interest in the offer, of various degrees. This aims to generate a high volume of leads who have expressed some level of interest, to be graded and actioned according to the established criteria for follow-on efforts.
- The process is not passive in finding the interest but aims to pique the attention of prospects by offering valuable content or incentives that may activate interest. Enticing individuals to take action by downloading an e-book or signing up for a newsletter can present the information that triggers awareness as well as capture the already interested.
- Aim to expand the reach of marketing campaigns and increment brand exposure. This involves applying various, carefully chosen channels using content marketing, social media, and online advertising.
Lead-prospecting goals differ considerably, but essentially take up where lead generation finishes. Its goals are:
- Qualify leads by evaluating their potential for conversion to paying customers. It assesses factors like: budget, authority, need, and timing to make a purchase—the BANT criteria.
- Narrows down the pool of leads generated during lead generation. This is done by grading prospects and focusing attention on the best, to efficiently use resources and deliver high marketing ROI. Identifying the most promising opportunities for conversion reduces the effort wasted on low-value or unachievable sales.
- Assign a priority level to them, based on apparent readiness to buy, the apparent value of the potential purchase/contract, and alignment with the ideal customer profile (ICP). Effort in follow-up is proportional to priority level.
- Ensures that sales efforts are directed toward leads with a high likelihood of conversion, optimizing the use of resources. Readiness to hand over from marketing effort to sales follow-through should align with a priority level.
- Improve conversion rates and increase the efficiency of the sales process. Lead prospecting focuses on quality over quantity, aiming to maximize the ROI from lead-generation efforts. Where a prospect fails to match its qualification level, a feedback loop that reviews the prospecting procedures and grading can tune the process to deliver better outcomes next time.
Lead Generation vs. Lead Prospecting: KPIs
Lead generation and lead prospecting each have their own distinct set of KPIs that allow the evaluation of success. These enable evaluation of strategies and optimization of efforts and facilitate a seamless transition from attracting the attention of potential customers to their conversion into paying clients. Lead-generation KPIs are typically considered to be:
- Number of leads generated.
- Conversion rate—which calculates the percentage of website visitors or engaged prospects who become connected and “active” leads by submitting contact information. A higher conversion rate indicates the effectiveness of your lead capture methods.
- Cost per Lead (CPL)—which measures the dollar cost of acquisition of each lead delivered by lead-generation campaigns.
- Lead quality.
- Engagement metrics such as click-through rates (CTR) or time spent on content and social-media interactions.
Lead-prospecting KPIs differ fundamentally from those of lead generation. These are:
- Lead qualification rate that measures the proportion of leads that meet predetermined criteria to be considered as qualified prospects.
- Lead scoring, or assigning scores to leads based on their predefined characteristics and behaviors.
- Sales-ready leads, which indicates the relative level of qualified leads that are deemed ready for direct-sales outreach.
- Conversion rate, which tracks the percentage of prospects who eventually become paying customers.
- Time to conversion, which measures the average time it takes for a prospect to move through the prospecting process and become a customer.
- Customer lifetime value (CLV), which measures the long-term value of customers acquired through prospecting efforts.
- Feedback and collaboration between marketing and sales teams.
Lead Generation vs. Lead Prospecting: Tactics
Lead generation and lead prospecting each require distinct tactics and strategies. Understanding the tactics associated with each stage is essential for successfully guiding potential customers through the sales funnel. Lead-generation tactics are generally considered to be:
- Content Marketing: This involves creating and sharing client-valued and relevant content to attract and engage potential leads. Blog posts, articles, videos, infographics, and webinars are common content types provided.
- Social-Media Marketing: Leveraging social-media platforms to promote content, engage with the audience, and drive traffic towards lead generation exploits assets like contact-capturing landing pages and sign-up forms, behind which should be provided the content marketing materials.
- Email Marketing: Building and nurturing email subscriber lists through newsletters, promotions, and lead magnets develops a powerful tool for capturing prospect interest.
- Search Engine Optimization (SEO): Optimizing website content to elevate the ranking in search engine results pages (SERPs) and attract organic traffic requires a focus on targeting relevant keywords and providing comparatively more valuable information that generates hits.
- Paid Advertising: Running targeted advertising campaigns on platforms like: Google Ads, Facebook Ads, and LinkedIn Ads will reach a wider audience and direct them to landing pages or lead capture forms. This can be through PPC or more passive forms.
- Gated Content: Offering resources such as: e-books, whitepapers, and templates in exchange for contact information encourages lead generation.
Lead-prospecting tactics necessarily follow on from lead generation. The tactics are:
- Lead Scoring: Assigning numerical ranking to leads based on well-thought-through aspects of behavior, demographics, and engagement allows for the prioritization of better-quality leads for personalized outreach.
- Lead Qualification: Implementing processes to evaluate leads against predetermined criteria, such as BANT, separates the leads that are considered more easily/quickly converted.
- Personalized Outreach: Craft tailored messages and communications to reach out to leads based on their interests, needs, and pain points, driving deeper engagement.
- Social Selling: Engaging with leads on social-media platforms by sharing relevant content, participating in discussions, and building relationships. Social selling helps establish rapport and trust. Remember that many more people read the information than directly engage, so the connectivity effect is greatly amplified.
- Account-based Marketing (ABM): Focusing marketing and sales efforts on specific high-value accounts or prospects, with more-intensive, personalized campaigns and communications tailored to these.
- CRM Systems: Leveraging CRM software to track and manage leads, interactions, and prospecting activities greatly aids communication by preventing annoying repetitions, poor coverage, and neglected prospects.
- Email Sequences: Implement automated email sequences for lead nurturing and follow-up, tailored to move prospects through the sales funnel.
- Sales Enablement Tools: Equipping sales teams with tools like lead intelligence, sales collateral, and training resources will greatly enhance their prospecting efforts.
Lead Generation vs. Lead Prospecting: Marketing Channels
The choice of marketing channels plays a pivotal role in the success of lead generation and prospecting. Various marketing channels are used to attract and engage potential leads during lead generation, while other tools are employed for evaluating, qualifying, and nurturing those leads during lead prospecting. Lead-generation marketing channels are typically:
- Content: This is a versatile toolset for lead generation, creating and sharing blog posts, articles, videos, and infographics. These serve to attract and engage potential leads and they are generally agnostic as to distribution platforms; websites, blogs, and social media.
- Social Media: Social-media platforms like Facebook, X (Twitter), LinkedIn, and Instagram are considered effective for lead generation, selected according to audience type/demographics. Businesses use these platforms to share content, run paid-advertising campaigns, engage with their audience, and direct (and reward) traffic to landing pages or lead capture forms.
- Email: Email is a powerful channel for lead generation that involves building and nurturing email subscriber lists. Email campaigns are designed to drive traffic to lead-generation assets and encourage lead capture.
Lead prospecting marketing channels are typically:
- Email: These are a vital channel for lead prospecting to nurture leads, provide relevant and stimulating information, and move prospects through the sales funnel. Personalized email outreach is a central plank of lead prospecting.
- Social Selling: Social selling is engagement with leads on social-media platforms, building highly visible and quite personal relationships, and sharing content that addresses potential clients’ needs and interests. Rapport-building and brand recognition can be developed far beyond the contacted individual, particularly where the connection involves sought-after advice and solutions.
- CRM Systems: CRM software is a central tool for lead prospecting, helping sales teams to organize leads, track interactions, and manage prospecting activities effectively.
- Account-based Marketing (ABM): This closely focuses marketing and sales efforts on specific high-value accounts or prospects. It involves increasingly personalized campaigns, communications, and outreach that are highly tailored to individuals and specific target accounts.
- Sales Enablement Tools: These provide sales teams with lead intelligence, sales collateral, training resources, and communication platforms to enhance their prospecting efforts.
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