Understand the concepts of Lead, MQL, SQL, and prospect

Lead vs. Prospect: What Are the Differences?

What Is a Lead and What Is a Prospect?

Let's start with the most common terms: Lead and prospect. Sometimes people think a lead is the "English" or "startup" version of the word prospect. Nothing could be more incorrect.

What Is a Lead?

The lead is a term primarily from the marketing department. It actually helps differentiate an anonymous visitor to your website or social media from an identified visitor. The difference between the two often lies in obtaining simple contact information like an email address left in a newsletter form, for example.

Prospect: Definition

The term prospect comes more from the sales department. It designates a potential customer, someone who fits your target who could be a buyer of your products or services. But it's primarily a qualified contact—we know much more about them, particularly the existence of a need and their willingness to invest to address that need.

Differences Between Lead and Prospect

The difference is simple: in the case of a lead, we only hold very little information. We can simply track their activity on our site when we've deployed the technical means to do so (marketing automation tools, for example) and we have a way to contact them. That's it.

In the case of a prospect, you know how to contact them but you also know:

• Who they are

• What their job is

• What their pain points are

• You know they intend to solve these pain points

I emphasize this last point: if you have no idea about the pain points a prospect encounters, it's not a qualified prospect—it's at best a suspect.

The Connection with Inbound Marketing and Business Development

The confusion between these two concepts is essentially due to the rarely homogeneous mix of two cultures within companies.

When your company has a very strong marketing culture, there will be a tendency to use the term "Lead" much more with the terms MQL and SQL. The word prospect will disappear or be used to designate a lead.

In a company with a sales-dominant culture, the terms "suspect" and "prospect" will be more naturally present.

This still demonstrates insufficient collaboration between sales and marketing departments. In reality, all these terms are relevant and complementary.

The Sales Cycle: Lead, MQL, SQL (Prospect), Customer

The sales cycle can be roughly summarized this way: it's the process that goes from lead generation to converting these leads into customers. Marketing and sales teams each have their role to play in this process. We strongly recommend modeling your customer journey in depth, but that's another topic.

The Conversion Cycle from Marketing's Perspective

When you have an inbound marketing strategy in place, this cycle is very clear and well-structured. We can then talk about the inbound marketing funnel or inbound marketing conversion tunnel.

From Visitor to Lead

The foundation of the marketing conversion tunnel is visitors—without traffic to your site, there's no one to convert. When you have significant traffic, you know many people are viewing your content, but you don't know who they are. You remain unaware until one of them fills out a form and gives you information about themselves. That's when the visitor becomes a lead—they're no longer anonymous.

To generate more leads, you must understand that you need to invest in two areas: traffic on one hand, and converting that traffic into leads on the other.

To generate more traffic, you should invest in:

• Content marketing and SEO: To get "free" visitors from search engines and social media

• SEA: To get paid visitors from search engines

• Social Ads: To get paid visitors from social media

To convert this traffic, you should invest in:

• Content marketing: Yes, it acts both in traffic generation and conversion

• Lead magnets: Very important, this type of premium content is at the heart of the marketing conversion process from visitor to SQL

• Marketing automation: To advance your leads through the funnel automatically

Lead Example: A visitor to a SaaS software website for building sales proposals arrives on the site after doing a Google search. They read an article about the best way to follow up on a sales proposal. Here, a popup offers them downloadable email follow-up templates, and they enter their email to get these templates. They've become a lead—the company has their email address and can now offer them additional content.

From Lead to Marketing Qualified Lead: MQL Definition

An MQL is a "Marketing Qualified Lead"—a lead qualified by marketing. A lead becomes an MQL when they've shown significant engagement with your content. They might have read numerous articles, downloaded a white paper, or signed up for and regularly opened your newsletter.

So it's someone identified who has shown clear interest in your content. Their behavior may have also guided you toward their main pain points. If they regularly consult your guide on implementing an account-based marketing strategy and the pricing page for your ABM marketing offering, you can start to suspect something.

From MQL to Sales Qualified Lead: SQL Definition

An SQL is a "Sales Qualified Lead"—a lead qualified for the sales team. It's an MQL that meets specific engagement and targeting conditions. At this stage, we must have certain information about the MQL and know, for example, what company they work for, their job title, and obviously an interest in the products and services you offer.

Finally, it's at this SQL stage that we have a "real" sales contact. It's someone who should be contacted because they have a project and they're in the target. It's actually A PROSPECT!

To finish with the marketing cycle, you must understand that the marketing team isn't passive waiting for a visitor to become an SQL. Their role is to implement effective lead scoring and lead nurturing. Define the rules that allow moving a person from one stage to another (scoring) and send them appropriate content to engage them (nurturing).

Can We Distinguish MQLs and SQLs in Results? MQL or SQL Examples

We often get feedback that it's difficult to differentiate an MQL from an SQL. This usually comes from a flaw in the inbound marketing strategy, particularly a flaw in scoring rules.

An MQL is a contact whose interest we perceive in our solutions, but we don't yet have a buying signal. If there's purchase intent and the MQL is in our company's target, they become an SQL. The whole challenge is therefore, thanks to marketing automation in particular, to trigger a buying signal.

Lead → MQL → SQL Transition Example

Let's return to the previous SaaS company example. After downloading the email templates, the lead receives marketing automation emails, including a video aimed at helping people identify the right signals for follow-ups. After watching this video, the lead signs up for the company's free video course to succeed in their sales process. At this stage, they've demonstrated significant engagement with the company's content, so they've become a good Marketing Qualified Lead. But they might be a student or simply curious—salespeople don't have time to waste with this type of MQL. They want an SQL who has real purchase intent. Fortunately, the SaaS company offers throughout its video course the opportunity to request a free trial of its tool. The form is detailed to give maximum information to the sales team. We now have an SQL that the sales team will be sure to convert into a customer.

The Sales Cycle from Sales Perspective: Suspect, Prospect, and Customer

The sales team's role is very simple: convert as many prospects as possible into customers. Their vision is simpler than marketing's, with a 3-stage cycle: suspect, prospect, and customer.

What Is a Suspect?

The suspect is actually the grouping of the first three stages of the marketing tunnel (visitor, lead, and MQL). These are people not yet concerned with sales action. We don't know if there's a viable project or if they're in the target. These are people we haven't qualified.

This can also designate a list of potential contacts for a sales prospecting or outbound marketing action. We think this list has potential, but the suspects don't know us and haven't demonstrated sufficiently clear purchase intent.

What Is a Prospect?

It's a person whose role and company we know, we know how to contact them, and most importantly, we're certain they're a potential target for our products or services. It's actually an SQL. This is where the work begins—we've qualified a sales contact who has a need and pain points we can solve. We must now convince this prospect that our solution is the best for them to convert them into a customer.

Lead, MQL, and SQL: A Simple Schema to Understand Everything

The confusion in terms is linked to a mix of two cultures that don't communicate enough with each other. The cycle from "visitor" to "customer" involves marketing and sales teams, and they must collaborate to achieve good results.