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Understanding the Difference Between a Sales Lead and Prospect
Understanding the Difference Between a Sales Lead and Prospect

by: Stephanie Lanik

Strategic Marketing Coordinator
Leads and prospects are two popular terms that you’ll often hear in sales and marketing. However, when it comes to defining them, most of us get it wrong. More often than not, the two words are used interchangeably, even though they don’t actually mean the same thing.
Many businesses have their own company-specific definitions for these terms and to make matters even more confusing, marketing automation and CRM systems also contribute their own – sometimes differing – definitions for leads and prospects.
In fact, many companies can’t even agree on whether leads or prospects are more qualified in the sales process. Some say leads are qualified prospects, others say prospects are generated from leads, and yet, some even say that prospects are equal to sales leads.
For the sake of unity, there needs to be a common understanding of the two terms at a company level (at minimum). Continuing to use them without some sort of shared understanding can (and will) be damaging to all parties involved. What elements make a lead? What elements make a prospect? Where do leads and prospects fit in the sales process? Any and all companies need a clear answer to these questions.
To tackle the overall confusion, here are some clarifications to help you understand what actually sets these two apart from each other, including the specific definitions of a lead and prospect. Having a clear understanding will help you successfully outline your buyer journey and targeting strategies.

What is a Sales Lead? (TOFU: Top-of-Funnel)

“Lead” is a potentially broad term that has varying qualification levels in the sales process. The easiest way to get our heads around the term is that a lead is at the start of the journey. It’s essentially any contact that has not been qualified or engaged.

A person first becomes a “TOFU” (top-of-funnel) lead after completing some kind of call to action or inbound web form, including contact forms and quote requests. These are commonly referred to as marketing-qualified leads (MQLs) who have initiated communication with your brand. The lead’s engagement is usually minimal. So, although they may have expressed interest in your product or service, they aren’t necessarily ready to make a purchase.

The point is: a “Lead” isn’t a sure thing.

Once it’s become clear that a lead is a good fit for a company and what it has to offer, they are considered sales-qualified leads – leads that have been qualified and even profiled by your sales team – a SQL. These “sales-ready” leads are ready for contact by your sales reps to, ultimately, close the deal.

To sum it all up: A lead is a person who has provided at least some basic information that suggests a potential interest in buying from you. Your main objective, once you have a lead, is to focus on learning more about them. This could be through attracting them into some form of engagement with you (two-way communication) and converting them into a prospect.

What is a Sales Prospect? (MOFU: Middle-of-Funnel)
In business terms, a prospect is a potential customer or client qualified on the basis or his or her buying authority, financial capacity, and willingness to buy, also called sales lead. The non-business definition of a prospect, according to the Merriam-Webster Dictionary, is something that can develop or become actual.

You can see that the word “prospect” is closely linked to an outcome. The verbiage around the term explains the potential for immediate growth and actualization. In other words, a prospect is farther along the sales process than both MQLs and SQLs, with an increased likelihood of reaching an outcome.

However, it’s important to understand that there is a fine line between what makes a true prospect and what doesn’t. Research from Sales Strategist, Mark Wayshack analyzed that 50% of the prospects are not perfectly fit to purchase your offerings. Many home business owners end up wasting time on the sales process because they don’t qualify the right leads before trying to sell to them, or they spend too much time on unqualified leads. There’s one statement that will help you move forward: You should clearly see how your product will solve a problem and create value for the prospect. If this is not clear figure it out or move on.

Determining if a contact is a sales prospect is the first step in the selling process. In order for a lead to become a prospect, they need to fit three criteria:

  • Fits your target market.
  • Has the means (money) to buy.
  • Is authorized to make the buying decisions.
These are the factors you have to determine in your research and your sales conversations in order to move your leads down the funnel.

So, in a nutshell, a prospect is a qualified and interested lead who, through two-way interaction, has demonstrated they are preparing to make a purchase decision.

The Clear Difference Between a Lead and Prospect in Sales:
Now that the two terms have been defined, it should be clear they are quite different in the sales process, one being that sales prospects are further along in the sales process than even the most qualified leads. However, beyond this point, there are two key distinctions between prospects and leads…

Sales & Marketing Funnel

Download our free “Sales and Marketing Funnel” infographic to help guide you while you move your potential buyers down your sales funnel.

Engagement and Communication!

In your sales and marketing, leads and prospects are two different categories of people — who require two different types of engagement and communication. Leads are characterized by one-way communication, while prospects are characterized by two-way communication.
Sales leads — characterized by one-way communication. They reach out to a company – through a form or sign-up – and provided their information. Once the company has that information, they enter the lead into a nurturing process, where the lead then receives one-way correspondence from the marketing department with additional provided information and calls to action with hopes of driving further engagement. This type of communication is all about generating awareness. Should the lead choose to respond to this additional contact—such as email—then the lead becomes a prospect as they have initiated two-way communication.

Sales prospects — created after a sales-ready lead is contacted by a rep. They’re ready for two-way communication with your brand, either through scheduled phone calls or in-person meetings. Messages come from associated reps and are highly personalized to the recipient. Calls to action for prospects usually center on keeping the dialog going (scheduling a call, requesting a quote, etc.). This type of communication is all about turning their interest into a relationship and moving the relationship through the sales funnel.

Key Points to Remember!

In the sales process, you gather leads first, qualify them into prospects, and then move them through your sales funnel or process. When you understand the difference between a lead and a prospect, you’re one step closer to getting inside the heads of your customers — empowering you to customize your communications and ultimately close more sales.
Sales Lead
  1. TOFU (Top-of-Funnel)
  2. Promising Sales Contact
  3. Unqualified Contact
  4. Different Levels of Qualification
  5. One-Way Communication
  6. Contacted in Large Groups or as Part of an Automated Program
  7. Mass Communication from General Source
Sales Prospect
  1. MOFU (Middle-of-Funnel)
  2. Linked to an Outcome
  3. Qualified Lead
  4. Qualified for Purchase Intent and Ability
  5. Two-Way Communication
  6. Contacted on an Individual or Small Group Basis
  7. Personalized Communication from Individual Rep
Overall, the goal should be to nurture those sales leads through the pipeline and convert them into a sales prospect—it’s about sales and marketing aligning and working together.

Do you currently have a ineffective lead nurturing strategy?

Read on to see some of the most common mistakes that we see in an ineffective lead nurturing strategies–and how to fix them.
Start Closing More Deals!
Hopefully, this article has helped bring some clarity to your sales process. Now, take what you have read here and use it to more accurately adjust your marketing campaigns based on the position of the potential buyer in the sales funnel and to CLOSE MORE DEALS!
Not sure where to start? Let us help you turn your leads into valuable prospects. Visit or contact us at or simply click the button below to learn more!
Written by: Stephanie Lanik
– Strategic Marketing Coordinator at Techtonic Sales –
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