You need clients and customers that convert, and you can go to them, or attract them to come to you. Most successful marketing departments do both, of course, sometimes simultaneously, leading to confusion around the terms “prospecting” and “lead generation.” In fact, many marketing professionals use them interchangeably.
So, what’s actually the difference? And more importantly, how can you use both to achieve your marketing goals? Here’s what you need to know about lead generation vs. prospecting.
What is Prospecting and Lead Generation?
Lead generation focuses on attracting potential customers by drumming up interest in a product or service through marketing strategies that include ads, content, or events. The goal with lead generation is to capture information about these leads and further nurture them as potential customers.
Prospecting, on the other hand, is the outbound process in which a sales team actively searches for and directly engages with potential customers who fit their target profile. Outreach can be through phone calls, emails, networking, and other strategies.
How are Prospecting and Lead Generation Different?
An easy analogy is online dating: Your profile brings potential matches to you, like lead generation in marketing. But when you DM someone you’re interested in, that’s prospecting. At the end of the day, both lead generation and prospecting help you move one step closer to closing the sale, but how they achieve this goal is where differences lie.
Attracting Versus Targeting
With lead generation, you are creating engaging content to attract a broader audience and gauge who may or may not be a potential fit for your business. Prospecting, on the other hand, is the “sniper” approach, according to Lauren Petrullo, CEO and founder of Mongoose Media and co-founder of Asian Beauty Essentials: “You’re actually hunting for sales qualified leads and targeting potential customers directly.”
Affordability
It takes time, energy, training, research, and targeted strategy to prospect, potentially more so than lead generation. Because of this, marketing teams have to prioritize their budgets to ensure they’re accounting for pricing variability between the two tactics. Lead generation is “so affordable” Petrullo shares, especially on social media platforms, but both might be necessary to include in your budgeting. She specifically calls out “Q5,” or the last few weeks of the year, as the “cheapest time of the year to do prospecting and/or lead generation on social media.”
How do Prospecting and Lead Generation Work Together in Sales?
When operated together, prospecting and lead generation can add the power behind your funnel. While lead generation tends to fall in the marketing function of a business, and prospecting falls into sales, both are necessary to help generate a potential customer in your sales strategy and future growth.
Though not every lead generation contact might turn into an actual buyer, generating leads strategically and frequently is a must for moving people down the funnel to an ultimate sale. The process of lead generation gives you the chance to move them into a more discerning step, where your marketing process filters out those who aren’t the right fit, allowing you to focus on those who are.
When lead generation and prospecting truly work together, sales strategies are aligned, with both focused on ensuring the quality leads make it into the funnel, without duplicating each other’s work, ultimately increasing sales. Per research by Marketo and Reachforce, businesses that align their marketing and sales efforts perform 67% better at closing sales deals.
What Should You Choose — Prospecting or Lead Generation?
Both prospecting and lead generation have their place in a comprehensive marketing strategy, but timing can sometimes be the biggest driving factor for when to use which skill.
Businesses can think of lead generation as the longer, often time-consuming process of capturing a customer. If a business isn’t in an immediate time crunch to add customers, lead generation can be helpful in engaging a broad customer base. Through resources like white papers or e-newsletters, you can help grow the potential customer’s interest in your business and the services you offer.
In contrast, if time is of the essence, prospecting might be an appropriate action, especially if you already have a targeted list of potential customers to reach.
Keep in mind that prospecting and lead generation don’t always have to happen in tandem, and sometimes separate team members are in charge of each approach. To truly be successful, these teams should communicate and ensure they are collaborating on the best ways to specialize in each tactic, and what overlap exists.
Common Lead Generation Strategies
Chatbots
Chatbots are designed to simulate chatting with a human, and can drive customers to things like newsletter signups and consultation bookings after helping them with their queries.
Paid Advertisements
Paying for advertisements can promote your business on social media platforms and search engine results pages, and also on larger publishers.
Offline Events
In-person events such as workshops, seminars, meetups, and conferences can help you generate leads if you require people to give their email addresses in order to attend. These events can also be hosted online.
SEO Blogs
Blogs or written content can be optimized to target high-ranking keywords and attract potential customers. While this doesn’t generate leads directly, it may increase the chances of readers interacting with your lead magnet.
Gated Content
With gated content, you restrict access to valuable content by requiring an email sign up. Gated content can include eBooks, newsletters, guides, infographics, reports, worksheets, and courses.
Free Trials
Offering free trial periods allows customers to test your product for free in exchange for their email address. Leads that come from this are typically more qualified than broader email signup leads because these users have actually tested your product already.
Social Media
There is some debate as to whether social media tools and their marketing processes are actually lead generation or prospecting, but generally speaking, it’s the former. “When you’re doing lead gen, you’re going to where your potential customers are because you’re leveraging those tools — they may be on Facebook, Snap, or LinkedIn, etc,” says Petrullo. As such, this would fall under lead generation, rather than prospecting. “You’re doing the shotgun approach and saying, ‘Hey, whoever you think is going to be a good fit, please come do lead generation with me,’ and that’s where your creative team tends to curate your audience. Your creative team is helping the person identify that you’ve got a sexy offer for a very obvious audience.”
Tools That Make Lead Generation Easy
HelloBar
HelloBar lets you place a bar containing a message and a call-to-action (CTA) at the top of your website.
SEMrush
SEMrush is one of the most powerful search engine optimization (SEO) tools out there. It can help you optimize your website for top-of-the-funnel keywords.
HotJar
HotJar is a heatmap tool that lets you see the most popular areas of your website. You can place your lead magnets on these areas to maximize their effectiveness.
HubSpot
HubSpot is an all-in-one lead generation tool that allows you to manage all aspects of your campaign in one place. Lead scoring on Hubspot is also made easy, allowing you to qualify leads based on fit and engagement.
LeadForensics
LeadForensics is a tool that lets you integrate both lead generation and prospecting. If visitors to your website are not completing your lead capture forms, you can use LeadForensics to find out where they work (using their IP address). You can then let your sales team know which businesses seem to be interested in your service and can be good prospecting targets.
Realize
Realize is a performance marketing platform which identifies audiences by intent and targets them with high quality display advertising on premium publisher sites. Using a generative AI, it optimizes these ads in real time for the best chance of success.
Realize's advanced AI capabilities enable precise targeting, engagement optimization, and budget simulation, maximizing advertiser ROI.
Key Takeaways
Like all marketing strategies, whether lead generation, prospecting, or both work for your business will depend on several factors, including your business’ stage and industry.
The important part is to choose a strategy that’s aligned with your specific goals, rather than throwing darts out randomly and hoping something sticks. Both lead generation and prospecting can have highly profitable outcomes, together or on their own, when you know what each is for.
Frequently Asked Questions (FAQs)
What is the difference between lead generation and sourcing?
Lead generation involves sparking interest in your product or service to draw in potential customers, typically through marketing strategies such as advertisements, content creation, or hosting events. The aim is to gather their information for follow-up and engagement.
Sourcing, or lead sourcing, involves proactively identifying potential customers, such as through databases, social media, or account-based marketing. Sourcing includes defining customer profiles, segmenting leads, and using data to determine the best next steps for conversion.
In short, lead sourcing involves identifying customers, while lead generation attracts customers to your business through marketing and sales processes.
How do you approach prospecting and lead generation?
The best way to approach prospecting for marketing is by defining your ideal customer profile, using data to identify qualified leads, and personalizing outreach efforts. People want a human touch to show your company is right for their specific needs. Leverage tools like CRM software and social platforms to research prospects, then craft tailored messages addressing their specific needs or challenges. Consistency and follow-up are key to building trust and fostering engagement — as is a genuine interest in their problems, and how you can help.
Is a prospect the same as a lead?
Prospects and leads are different, but they do share some similar traits. Prospects are potential customers within your target audience or market, who have been identified through your processes as a potential good fit. However, they might not have expressed interest yet. A lead, however, is someone who has shown interest by engaging with your processes, such as filling out a form, reaching out for information, or downloading a resource you have to offer.
