If I were to ask you to define the terms “prospecting” and “lead generation,” what would you say?
Would you tell me that they’re essentially the same thing? Synonyms for a strategy that serves a shared purpose? Reciprocal expressions? Sales-speak for two identical activities?
I can’t say that I’d blame you for going that route. But you’d be wrong.
The truth is that while the basic, high-level definitions of prospecting and lead generation are similar, they’re far from interchangeable. In fact, the goals of prospecting and lead generation—and the situations in which one makes sense over the other—often vary significantly.
Unfortunately, far too many business owners don’t understand the differences between lead generation and prospecting, and simply assume that using one or the other is acceptable.
To the contrary, both strategies are important to employ in your business if you hope to maximize your potential return on new business development, and they should be executed uniquely by different people—lead generation by your marketing team and prospecting by your sales staff.
Why Understanding the Difference is Important
It’s simple, really.
If your business needs to generate leads immediately and it executes an initiative designed to nurture leads in the long-term, you’re probably going to run headlong into a brick wall. Conversely, if your company’s goal is to build relationships with prospective customers over time, but your actions suggest urgency and aggression, you may turn customers away before ever having the chance to engage with them.
So, when you’re trying to decide whether prospecting or lead generation is best for your business, there are two big things you should consider:
- What are your short- and long-term goals?
- Which strategy will be most effective in helping you accomplish those goals?
When Lead Generation Makes Sense
By nature, lead generation is a longer-term process that centers on prospective customer cultivation and nurturing. Its goal is very simply to build awareness and generate leads over a period of time.
As a result, you should consider executing a lead generation initiative if:
- You want to build awareness and get prospects to demonstrate some form of interest before you contact them by phone
- You have the benefit of time to execute a series of strategies to build awareness in a defined market segment
- You don’t need leads right now
- You prefer to use a combination of personal, digital, and collaborative prospect attraction strategies like I write about in my new book, "The Sales Magnet"
- You want to develop an approach for building a consistent flow of leads
- You’re hoping to attract leads that are warmer and more qualified
- You’re ready to engage prospects by phone after they’ve expressed interest via some form of inbound response
When Prospecting Makes Sense
Contrary to lead generation, prospecting is all about urgency and aggression.
Maybe your pipeline is thin and you need to replenish it. Or maybe you’re a few deals short of your quarterly quota and you need to quickly identify, engage and close new customers. Regardless, prospecting is best used when you need to find leads to fill your pipeline right now.
Ultimately, prospecting is best in those situations and the ones below:
- Your goal is to close an appointment
- You typically favor a combination of calling, email, and social media to engage prospects
- You prefer to focus on a very targeted lists of customer microsegments to ensure that your value proposition is specific and relevant to the prospect
- You’re not worried that the people you’re prospecting have no awareness of you
- You’re comfortable being rejected or ignored (with prospecting, it may take at least nine attempts before you get a response)
- You’re confident in your ability to quickly and concisely deliver your value proposition, and are comfortable questioning customers and responding to their objections
So, which one is right for you?
The key to answering that question is to determine your ultimate goal. Once you know what you’re trying to accomplish, selecting the method or strategy that is going to satisfy it—and your prospective customers’ needs—should be relatively simple.
Whatever you do, though, don’t make the mistake of thinking that lead generation and prospecting are interchangeable.
Kendra Lee is a top IT Seller, Prospect Attraction Expert, author of the newly released book, “The Sales Magnet,” and the award winning book, “Selling Against the Goal,” and president of KLA Group. Specializing in the IT industry, KLA Group works with companies to break in and exceed revenue objectives in the Small and Midmarket Business (SMB) segment.