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Sales prospects are potential customers for a given company that have gone through a process of qualification and who have expressed at least a small amount of interest in doing business with the company. The typical sales representative is very attracted to the prospect, in that much of the groundwork is already in place for making a sale and securing a new customer for the business. A properly qualified prospect has an excellent chance of earning sales for the salesperson and moving on to become a recurring customer of the company.
While the criterion for determining what constitutes a sales prospect varies somewhat from one sales environment to another, it is important to realize that prospects and sales leads are not the same classification at all. A sales lead is nothing more than basic contact information. Leads usually have yet to be qualified as far as meeting the credit and financial standards set by the company, or even establishing that the lead has any interest in doing business with the company.
By contrast, a sales prospect does represent a solid opportunity for a sale. In order to achieve the status of prospect, the sales lead must first be evaluated to ensure the lead is credit worthy Once this has taken place, the salesman will move on to engage the lead in dialogue about the goods and services offered by the company. If the lead expresses interest in learning more and is open to continued dialogue with the salesperson, the lead has been converted into a prospect.
The goal of every salesperson is to qualify leads to the point that they become a sales prospect. This is because “cold” or unqualified leads rarely jump straight to the status of customer. When a contact has become a prospect, this means rapport has been established between the salesperson and the potential customer that has an excellent chance of resulting in a sale.
Many companies use software or specific guidelines to track the progress of prospects. Progress may be measured in where the prospect is determined to be in the overall sales cycle. One that has expressed a solid interest but is awaiting a credit check is generally considered to be in the early stages of the cycle. Steps such as allowing the salesperson to demo the product or service, passing a credit check, and allowing the salesperson to submit a proposal or quote all move the sales prospect through the cycle and closer to becoming a customer.
It should be noted that not every sales prospect moves through the cycle at the same pace. The salesperson can influence the movement to a great degree by creating a sense of urgency for the potential customer. When a sales prospect perceives a real and immediate need for the goods or services offered, chances are the process of moving from prospect to customer will take a relatively short time. However, completing the migration from to customer could take months or even years.
Oasis11- Isn’t that more of a lead than a prospect? When a potential customer contacts competing businesses to offer a formal sales proposal that really is not a qualified prospect.
I think over time, it could be but not at the moment. A customer must be pre-qualified in order to determine if they are a qualified prospect or not.
Anyone can call a company up and ask for information. It certainly makes the caller a lead, but not a prospect.
While I agree that sales prospects take time to qualify and complete the initial sales qualification process, I hardly think that it would take years. A business must perform the sales qualification process in an efficient manner, which may take a few months for large accounts.
Many potential sales prospects also offer companies a bid proposal in which competing firms have the opportunity to obtain business from the prospect.
The competing firms develop a sales presentation and present a competitive proposal. The more competitive the proposal the more likely the prospect will successfully become a qualified customer of the firm.