Whilst different people and businesses will have slightly different definitions, here are our definitions of a Lead, a Prospect, a Customer and a Client. You’ll use these terms frequently in your marketing and sales process. You’ll probably have these as segments and lists within your CRM too.
Definition of a Lead
Basic Definition: A lead is an individual or organisation that shows potential interest in your product or service. They might have engaged in some way, such as visiting your website, requesting a lead magnet or signing up for a newsletter, but haven’t yet shown a strong intent to buy. You might have met them at a networking event or they’ve approached you when you’ve been speaking at an event.
Variations on how you can describe a “lead” – Qualified Lead v.s. Prospect
This is a lead that has been evaluated and meets certain criteria, indicating a higher likelihood of becoming a customer. Their level of interest is higher than that of just a lead. That criteria could include their ability to purchase, specific needs that match your offerings, or engagement level. You can discover this by asking them questions, or having them complete a form.
They will probably have moved beyond just an initial enquiry. They’re engaging with your sales team, asking detailed questions, or requesting more information which is indicating a readiness to consider a purchase. You can feel that they are probably going to convert into a customer (or client). You or your sales rep have a decent understanding of their pain points, as well as understanding what their blockers are. You might even notice the early stages of negotiation too.
Some people may define a qualified lead slightly differently to a prospect. For me personally, I don’t typically differentiate between the two.
Definition of a Customer
- Definition: A customer is an individual or organisation that has made a purchase from you. This relationship is typically transactional. Customers might buy your product or service once or occasionally, but there’s no implication of an ongoing relationship or long-term commitment. Purchasing a product from a superstore or a shop is an example of a customer-based relationship.
Definition of a Client
- Definition: A client is an individual or organisation that engages in a more sustained, ongoing business relationship with you. Clients often use your services or products on a regular basis. This relationship is usually more in-depth and personalised compared to a customer, involving a higher level of interaction, service, and commitment. An example of this might be for professional services such as an accountant, or a HR consultancy.
A lead is a potential client or customer at an early stage of the process where they are showing varying levels of interest. A prospect or qualified lead is a more serious lead showing a higher level of commitment of interest. A customer is someone who typically makes an occasional or one-off purchase. And a client is someone who purchases on a regular basis where there’s an ongoing relationship as a result of the transactions.