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Definition: A Prospect is one who, having been qualified, indicates that he or she is potentially interested in buying a service or product. In the sales stream, a prospect is more advanced than a lead and considered to be more likely to be customer.

Detailed Explanation

A prospect is a potential customer that has been qualified as per his/her need for the product, authority to make a purchase decision, and financial capacity to effect payment. This, therefore, means that a prospect is closer to purchase and hence a very critical part of the sales process. It is a process that usually involves qualification of the leads into prospects, determined by a level of interest and fit for the offered product/service. Such qualification will help one set priorities in sales with an eye toward maximum efficiency and effectiveness. Steps in Converting Leads into Prospects:

  • Identification: Identifying potential customers who appear to need your product or service.
  • Qualifying: Assessing these potential customers regarding their level of likelihood of buying.
  • Engagement: Contacting them to gauge interest and readiness for purchasing

Importance to the Sales Process

  • Focus: It allows salespeople to focus on leads they believe they can convert to clients and thus make the best use of their time and resources.
  • Efficacy: Makes sales process more effective by identifying whom to pursue more aggressively than others as potential customers.
  • Revenue Generation: If the sales team focuses on best buyers, it will more productively drive revenue by closing deals from prospects.
  • Customer Relationships: Interaction with prospects helps build deeper relationships, giving way to greater sales and repeated business.

Real-World Example

For example, an enterprise software sales company would qualify businesses with older software as leads. Upon a little bit of probing, it would transpire that some of the businesses are actively in the market to upgrade their system, and moreover, they even have the budget earmarked; the business, therefore, becomes a prospect. Afterward, the sales team can focus on proving value to the prospect to close the sale. Another instance would be a car dealership that recognizes local residents as leads. In their interaction, they get to know a number of families that are planning to buy a car in the next month. The dealership concentrates on this group through offering test drives and discussing financing options.

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