Lists, Prospects and Leads – What’s the Difference?

May 17th, 2021 by

I get many calls from marketers looking for data. Many people use the terms list, prospect and lead interchangeably. But, that could not be further from the truth.

The term list is the broadest. There are lots of people on a cold list; all kinds of people. In the “old days of spray and pray”, advertisers mailed to everybody and hoped that some their efforts would pay off. Well, not everyone on a cold list is your prospect. The truth is that marketing to non-prospects can actually weaken your brand’s impact.  Not only that, it’s a tremendous waste of time and money.

In lead generation, the key is to take that cold list and narrow down the possibilities to create a workable list of solid prospects. These prospects can be used for direct mail, telemarketing, email or digital advertising.

Lead Generation needs to be a daily exercise.

In general, a prospect is a person whom you believe could be a potential customer.

  • Why might they be a potential customer?
  • Do they resemble your current customers?
  • Are you comparing demographics such as age, income, or home ownership data?
  • Are you looking deeper at purchase triggers or lifestyle information to help massage the data into viable prospects for your business?
  • Do they have the credit to afford your product?
  • Are you using credible research or survey data to help shape your prospect universe?

Using Data to Define Your Prospect List

What kind of data can you use to help you define your prospects?

Many industry trade associations sponsor consumer opinion studies that their members can access. For example, the Water Quality Association produces a Consumer Opinion Study every two years. This gives their members credible survey data that pinpoints the top buying groups: New Homeowners, Families with Children, Homeowners with Credit, Home owners with a focus on the environment.

Even though the research has shown that a high percentage of these groups are buyers of water treatment products, these prospects may not necessarily be keen on purchasing from you today. But they are still good prospects. By keeping them in your funnel and marketing to them more than once, you can increase the probability that they will purchase from you.

Or, you can model your own customers to see if you can clone them. Many prospect list providers will do this for you at no charge.

The cost for prospect data ranges from 5 cents per record to 25 cents per record, depending on complexity of the prospect name and quantity.

Once the prospect exhibits some kind of interest in your product, we can move them from prospect to a lead. In this case, you have generated the lead yourself. We call this a self-generated lead. These leads are yours and yours alone. Your job is to work them.

Self-Generated Leads

These are the best leads. A prospect has responded to your marketing outreach. They have filled out a form on your website, indicating that they want more information about your product.

Now that they have filled out the form on your website, you need to contact them right away. According to a study by Lead Connect, 78% of customers buy from the company that responds to their inquiry first. That means that time is of the essence when it comes to working with interested leads.

Hot Lead

Hubspot defines a hot lead as a qualified lead who is highly interested in your product. They are ready for direct contact asking for the sale.

According to Hubspot, a hot lead

  • Has expressed a level of interest with your product.
  • Your product fulfills a need
  • They can afford or can authorize the purchase of your product.
  • Has a clear timeline to purchase the product

You will want to give this to your best salesperson and have her close the sale right now.

Warm Lead

A warm lead is an individual who has expressed interest in your product or company. Right now, they may not have a sense of urgency or a specific timeline for their purchase.  A warm lead is someone who is aware of your product and is interested in buying from you. They just may not be looking to buy right now.

A warm lead is definitely someone you want to keep at the top of your pipeline. These are leads you want to nurture. After all, you’ve already done so much work getting them to this point.

There are some tried and true methods for working warm leads. You may want to offer them a product demo or show them customer success stories. Consider personalized emails, remarketing, and sharing content that shows how you provide value to them.

And, since they’ve been having a hard time pushing that “buy” button, you might consider a special short-term offer to help close the sale.

A Comment About Buying Leads

If I had a dollar for every prospect who called my office looking for exclusive Hot Leads, I’d be rich. Chances are that if a company generated a list of people who want to buy a new roof, had the money in hand and wanted to buy that new roof today, they would be working it themselves.

For those leads that don’t pan out, lead generators may sell the cast-offs to other companies as “aged leads”.

For some businesses, these aged leads can be a good source of new prospect data. But remember, you will have to work them from the beginning since they are not familiar with your company or what you do.

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