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Sales Prospecting Vs. Lead Generation
Written by: Victoria Yu
Victoria Yu is a Business Writer with expertise in Business Organization, Marketing, and Sales, holding a Bachelor’s Degree in Business Administration from the University of California, Irvine’s Paul Merage School of Business.
Edited by: Sallie Middlebrook
Sallie, holding a Ph.D. from Walden University, is an experienced writing coach and editor with a background in marketing. She has served roles in corporate communications and taught at institutions like the University of Florida.
Updated on November 17, 2023
Sales Prospecting Vs. Lead Generation
If you’ve been doing your homework, you might have noticed that sales prospecting and lead generation are quite similar on the surface: both these processes help draw in new customers for your business. So what’s the difference?
Though both sales prospecting and lead generation have the end result of bringing in new customers, the processes and agents utilized by the two are different. They represent the separate functions that use these methods – sales and marketing, respectively.
These two activities aren’t interchangeable, so a smart business owner should make full use of both to cover all bases and draw in the most amount of customers. But to do that, you’ll need to know the concrete differences between them. To that end, this guide will walk you through the nuances between sales prospects vs lead generation so you can properly make the best of both.
Lead generation is when the marketing team identifies and captures leads for a business, usually using widespread digital marketing campaigns.
Sales prospecting is when the sales team personally identifies, reaches out, and sells to qualified leads in hopes of converting them into customers.
Though they both work to eventually generate customers for the business, lead generation and sales prospecting differ greatly in who uses them, their inputs and outputs, how many leads they handle, place in the sales funnel, and time scale.
What is Sales Prospecting?
Sales prospecting (or just prospecting) is when a salesperson identifies, researches, and reaches out to a potential customer for a business with the hopes of making a sale. Prospecting is used by the sales department to directly target and persuade potential customers one-on-one, and consequently requires quite a bit of personal attention and elbow grease on the rep’s part.
The input of the sales prospecting process is a single potential customer (lead) targeted by the sales rep. Once the rep talks to and nurtures the sales lead, the output is a highly-qualified sales prospect, sales opportunity, or even a full-fledged customer. In other words, prospecting aims to take a lead as far down the sales funnel as possible.
(Not sure what a sales prospect or sales opportunity is? A prospect is a lead that’s been determined to fit criteria matching your business’s ideal customer, and an opportunity is a prospect who has shown interest in the product or service and has a high chance of purchasing. For more detail, check out our guide on Leads vs Prospects vs Opportunities.)
The sales rep usually finds leads through lead databases, online research, or networking and reaches out to them one-on-one using methods such as cold calling, cold emailing, or cold messaging through social media.
Upon first contact, these leads might not even know about your business, so the process of nurturing their interest and warming them up to the idea of a sale might take days, weeks, or even months, depending on your product.
What is Lead Generation?
On the other hand, lead generation is a wide set of activities used by the marketing department to attract many potential clients at once by creating ads, content, and lead magnets pointed at large amounts of consumers, usually over the internet.
(There are two types of lead generation: inbound lead generation and outbound. For more detail, check out our guide on Inbound vs Outbound Leads.)
Lead generation campaigns are done one-to-many, aiming at attracting as many people from a specific target audience by creating content with wider appeal. Some lead generation tactics are ads, content marketing, mass marketing emails, website content, and search engine optimization.
The input of the lead generation process is potential leads who are interested in your brand or product. Marketers appeal to this interest through ads and content, eventually coaxing the consumer to leave their personal contact information (name, email address, or phone number) in exchange for more content.
The exact steps a business takes to get a lead’s information are represented by its lead generation funnel.
With this personal information on file, the consumer becomes a concrete lead and is forwarded to the sales department to be nurtured into a customer. In other words, the output of lead generation is leads that go into the sales funnel.
Lead generation isn’t something that can be done in a day. The marketing department might take weeks or months to distill the company’s ideal customer profile, identify its target segment, create content that appeals to those target customers, and then set up the processes to disperse the content.
After that, there’s no rushing lead generation: customers will develop an interest in the company and product organically in their own time.
On the bright side, once a lead generation tool such as a website landing page, email marketing campaign, or SEO campaign is set up, it usually doesn’t require much upkeep from the marketing team and can operate perpetually.
What’s the Difference Between Sales Prospecting and Lead Generation?
As a brief refresher, let’s summarize what we’ve established about sales prospecting vs lead generation and put the information side-by-side.
|Sales Prospecting||Lead Generation|
|Who uses it?||Sales reps in the sales team||Marketers in the marketing team|
|What are its inputs?||Leads||Potential leads|
|What are its outputs?||Prospects, opportunities, and customers||Leads|
|How many customers can it create?||One at a time||Many at a time|
|Where in the sales funnel is this activity?||Middle and bottom of the funnel||Top of the funnel|
|How long does it last?||One sales cycle||Runs automatically once set up|
Looking at the table, it’s a bit easier to see the differences between sales prospecting and lead generation.
While lead generation is used by the marketing team to create multiple quality leads at the top of the sales funnel, prospecting takes one of those leads and coaxes them further down the funnel to become a prospect, opportunity, and eventually customer. In other words, the output of lead generation is the input of sales prospecting.
Regarding timing, a lead generation campaign takes longer to set up but runs for a long time once it’s set up. How long a lead generation campaign runs depends on the type of campaign: an SEO or email campaign probably only lasts for a month or two at a time, while a website landing page could run for years, pulling in hundreds of thousands of leads hands-free.
On the other hand, by focusing on selling to only one lead at a time, a sales rep can streamline them down the entire sales process in one fell swoop. Consequently, though, the number of customers generated is limited by how many leads and personal conversations your sales rep can juggle at once.
Lead generation and sales prospecting are quite different from each other in who uses them, what they do, when they do it, and how they do it. But the one thing they have in common is their goal of finding high-quality customers, making a sale, and growing a business.
Instead of choosing one or the other, a smart business owner should instead use both of these tools in tandem by generating plenty of leads with lead generation and converting those leads into customers with sales prospecting. If aligned properly, these two activities will ensure an always-full, fast-paced sales funnel that rakes in the big bucks.
You should ideally use both for your business, but which one you focus on first depends on your imminent business needs.
For example, if your business is in the red and your sales funnel is completely empty, you should focus on sales prospecting to quickly find and make a few sales to keep your company afloat.
But once your company is stable, divert some time and attention to lead generation tactics, which take longer to set up but will create a stronger, steadier customer flow in the long run.
Outbound lead generation is when the business contacts the customer first, which sounds a lot like sales prospecting. However, the same differences in focus and effort per lead apply.
For example, both sales prospecting and outbound lead generation might use cold emails to reach out to potential customers. However, while an outbound lead gen strategy might send a thousand cookie-cutter emails to a thousand leads, a prospecting sales rep would likely only send one personalized, handwritten email to one lead that they’ve researched in extensive detail.
Ideally, you should aim to utilize both prospecting and lead generation for your business, whether B2B or B2C. However, which one you focus more on depends on your business.
Broadly speaking, B2B businesses have fewer potential buyers in their industry, so a B2B company should take more care in identifying and approaching them using sales prospecting. Any B2B lead generation tactics should focus on inbound lead generation that captures and profiles prospective buyers through gated content and interest forms, rather than intrusive and annoying outbound lead generation tactics that might ruin your reputation and sour relations before they even start.
On the other hand, B2C companies have exponentially more potential buyers, so one-to-many lead generation campaigns would be more cost effective than attempting to personally sell to each customer. Any B2C sales prospecting tactics should be saved for bulk orders or very high-ticket items that would justify the sales rep’s personal attention.
This isn’t a real word. It’s a mutated amalgamation created by people who mixed up sales prospecting and lead generation.
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