A Lead can be an individual or an organization, who has the potential to become a customer to your company or organization. The meaning of lead changes from organization to organization and from domain to domain. Defining a lead properly is very crucial for any organization.
Because the sales team cannot contact reach each and every lead brought up by the marketing team, there must be a mutual understanding between the marketing team and sales team in defining Lead.
Use Case1: Company trying to offer credit card.
Let us consider an example where a company is trying to offer credit cards to its would-be customers.
There are two possible scenarious here.
Scenario 1: The definition of a lead in this scenario can be a contact of an individual who is an employee and who is earning decent money so that he could pay the amount back and also his CIBIL score should not be bad.
With the above mutual understanding, the marketing team will be able to save a lot of time for the sales team as they are providing not just leads, rather they are providing qualified leads to the sales team. The leads generated on these criteria is called Marketing Qualified Lead.
There is no guarantee that a Marketing Qualified Lead becomes a customer to the company. Because the Marketing Qualified Lead has not yet expressed any interest in the product. So, it is the responsibility of the sales team to contact the qualified lead and pitch the product to him. If the sales team is able to know that the customer is interested in the product, then the sales team marks the qualified lead as a prospect. So, the difference between lead and prospect is that a prospect is nothing but a qualified lead who has shown interest in the product.
Scenario2: The customer himself showing interest in purchasing the product by
a) Filling the credit card application online,
b) He himself calling the customer care
c) He is responding positively to the social marketing ads,
d) He just came to the company website to see the features and discounts offered by the credit card and the website requested him to give his mobile number so that an agent would call him to walk him through the features and the customer provided his mobile number.
e) He attended an event and he has given the contact information to the company agents who described the features offered by the credit card.
So, in this scenario, what the sales got is a Sales Qualified Lead.
Now, once he responds positively with the Sales team, then the Sales team marks him as a Prospect. As we know that prospect is nothing but a qualified lead who is showing interest in the product.
So, to summarize, in scenario 1, the sales team got Marketing Qualified Lead(which is not bad at all) from the marketing team. And in scenario 2, the sales team got Sales Qualified Lead as the customer is ready to talk to the sales team.
UserCase2: Company trying to sell motor insurance to its customers.
So, here the mutual understanding between the Marketing Team and the Sales Team would be in such a way that Marketing Team needs to provide the leads who are having either Car or two-wheeler and these leads need to be categorized properly so that Sales team don’t end up calling to its leads pitching for a 4 wheeler insurance but the lead is having a two-wheeler.
Here, the Marketing Qualified Leads are more valuable than Marketing Qualified Leads that we discussed earlier in the Credit Card use case because every employee need not have a credit card, but every motor owner needs motor insurance.
Now, it is the responsibility of the Sales Team to call these Marketing Qualified Leads and convert them into Sales Qualified Leads, and if any of these Sales Qualified Leads to respond positively to the sales team, then the Sales Team marks the Sales Qualified Lead as Prospect and guide him further through Sales Funnel.
There can be another scenario where the customer himself approaching the Sales Team for purchasing the motor insurance, in that case, he is called Sales Qualified Lead as he is ready to talk with the Sales Team.