Introduction
In the realm of CRM, the sales process distinctly differs between B2C and B2B sales. B2C sales cycles are typically shorter and simpler compared to B2B sales cycles, which can extend from weeks to months or even quarters.
This blog primarily focuses on the B2B Sales Life Cycle, characterized by its extended duration and effort. At a high level, the B2B sales process can be broken down into five stages:
- Targeting: The marketing team creates campaigns aimed at potential “Target Segments” by identifying suitable “Targets.”
- Lead Generation: A “Lead” is any individual who responds to campaigns or contacts the company, providing information such as their name, email, phone number, or company name.
- Prospecting: Through lead qualification, the marketing and sales teams identify prospects based on their “Ideal Customer Profile (ICP).”
- Opportunity Development: In this stage, the prospect is nurtured until there is an expressed need within their company, and they become part of the sales process.
- Customer Conversion: The opportunity is realized when the prospect transitions into a customer, completing the sales process.
This article explores the concepts of Leads, Prospects, and Opportunities in greater detail.
What is a Lead?
A lead is a potential customer who has shared their information with the company. This means we have their name, email address, or phone number. By providing this information, the lead is aware of our company.
Leads can originate from various sources. For an established company, leads might come from existing customers and vendors who refer others to your services.
However, as companies expand, they often employ marketing teams to actively engage prospective customers through campaigns.
There is often confusion between leads and targets within sales teams. Let’s clarify the straightforward difference between the two.
Targets vs Leads
In B2B sales, a target refers to a person or company that is considered as a potential buyer of the company’s products and services. The marketing team actively seeks information about their target segment, identifying the physical or digital spaces where they congregate, aiming to promote the company’s brand and products directly to them.
The key distinction between a target and a lead is that a target is unaware of your brand and products, while you have identified them as existing potential buyers.
SugarCRM’s modules—Targets, Target Lists, and Campaigns—aid in capturing target information, whereas the Leads module is used to manage lead information. The Target module includes an option called “Convert to Lead,” allowing the marketing team to convert a target into a lead if they respond to a campaign. This process transfers all relevant information to the Leads module.
A lead is someone from the target audience who has become aware of your company and products, showing interest through interaction. This interaction could involve actions such as downloading a white paper from your website after providing their email address or filling out a contact form on your site.
Understanding the Difference Between Targets and Leads
The marketing team is aware of Target, but Target is unaware of your company or product. In contrast, a Lead is someone who knows about your company and has provided their information for identification.
How the Marketing Team Converts Targets into Leads
The marketing team consistently works to present the company’s brand and products to the Target Audience, aiming to convert them into leads.
Types of Leads
In any B2B sales process, leads are typically classified into two categories:
- Marketing-Generated Leads
- Sales-Generated or Automatically Generated Leads
A Marketing-Generated Lead is created through the ongoing efforts of the marketing team. On the other hand, Sales-Generated Leads are produced by the sales team or come as referrals from existing customers and partners.
SugarCRM supports the capture and management of all lead types through its Leads module, which is specifically designed to handle the entire lead lifecycle.
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What is Lead Qualification?
Just because we have someone’s email or contact details doesn’t necessarily mean they’re genuinely interested in our products or services. Sales team members are often focused on closing deals, and if they receive leads that aren’t well-qualified, they may lose interest in following up.
This is why most leads are qualified by the pre-sales team. There are two types of lead qualification.
Marketing Qualified Lead
If a marketing team is using SugarCRM’s marketing automation platform, Sugar Market, there are several methods available to qualify leads before passing them to the sales team. One key method is lead scoring, which is used by the marketing team to assess the quality of leads. For example, when someone provides their email by downloading content from the website, Sugar Market can assign a score based on factors such as the number of visits to the website, the specific pages viewed, and the number of email campaigns they’ve engaged with.
Marketing team can qualify a lead and give it to the sales team for further follow-up and such leads are called “Marketing Qualified Leads”.
Sales Qualified Lead
After the marketing team has qualified a lead using their own criteria, it is passed to the pre-sales team for further validation. Sugar Automate, formerly known as the Customer Journey Plugin, helps create the necessary steps to qualify sales leads. The specific lead qualification steps can vary from company to company and depend on the product or service offered.
Since a salesperson’s time is highly valuable, qualifying leads through the pre-sales team is a crucial step that companies typically follow before passing leads to the sales team.
Why lead Qualification is Essential in B2B Sales?
Consider a company in the construction business that specializes in building commercial properties of 100,000 square feet and larger. The marketing team targets business owners who fit this customer profile.
Now, imagine a lead named John provides his information and requests a connection with the sales team. The lead is passed on, and despite a busy schedule, the salesperson contacts John, only to discover he’s interested in constructing a 10,000 square foot commercial space.
While one such case might not be a big issue, if the marketing team continues to generate 10 to 20 leads like this each week, the sales team will eventually lose confidence in marketing-generated leads and may stop engaging with them altogether.
To prevent this, the pre-sales team performs additional qualification before handing the lead over to the salesperson.
What is a Prospect ?
In B2B sales, there are many variables at play. Just because you have a lead doesn’t guarantee that the potential customer will give you an opportunity to sell your products or services. Similarly, having a lead doesn’t necessarily mean they have an immediate need for what you offer.
This is where the process of prospecting comes into play.
For example, we implemented SugarCRM for a manufacturing company specializing in industrial magnetics, which help separate different agricultural particles before packaging.
Their typical customers are agricultural processing units, which generally purchase this equipment when setting up a new facility or during an expansion. While the manufacturer could target all agricultural units, by focusing their prospecting efforts on equipment manufacturers, they increase their chances of finding opportunities to sell their magnetic separation technology.
In another instance, we worked with a travel company that specialized in booking services for marine companies.
They charged a small percentage of yearly bookings as their fee and provided booking technology to these customers. Their prospecting efforts were concentrated on companies that owned shipping lines, gathering data on all businesses in the shipping industry and targeting them as potential clients.
A prospect is someone who may have an opportunity to purchase your products or services, but whether that opportunity is immediate or in the future depends on how effectively you manage your prospect engagement.
Leads and Prospects
A lead may represent a potential opportunity to sell our products and services, but when a prospect is identified among the leads, it signifies a more definite opportunity—whether in the near future or later on.
Sometimes, a competitor may already have a strong presence with the prospect, but through consistent follow-ups and relationship building, the salesperson may still secure an opportunity to make a sale.
This is why, in SugarCRM, a lead can be converted into a “Prospect Account.”
The Account module includes a “Type” field with options such as “Prospect” and “Customer.” This allows you to designate an account as either a Prospect Account or a Customer Account. A Prospect Account indicates a potential opportunity where a salesperson may sell products or services at some point in the future.
What is an Opportunity
A Sales Opportunity in the sales process arises when a customer has a specific need, an identifiable budget, and a tentative timeline that aligns with the company’s products or services.
For example, consider an industrial cable manufacturing company that supplies cables to businesses setting up or expanding manufacturing plants.
During the prospecting stage, the company’s sales representatives engage with key contacts to determine when expansions or new plants are scheduled.
Once a new plant has been budgeted and dates are set, the prospect becomes a sales opportunity. At this stage, the cable company has a chance to sell its products and services to the prospect company. However, whether the sale is successful will depend on the company’s competitiveness in the market and its relationship with the prospect.
Prospect vs Opportunity
At the prospect stage, you are aware that there is a potential to sell, but success largely depends on maintaining a strong relationship with the company to be included in their purchasing process.
An opportunity, on the other hand, occurs when the need is clearly defined, including both timelines and budgets or at least a budget.
Companies targeting a very specific audience often start at the prospecting stage to build relationships, aiming to secure opportunities in future purchasing cycles.
In many B2B sales scenarios, participating in the prospect’s purchase process without a well-defined plan for maintaining relationships and updating the company’s capabilities can be challenging.
Conclusion
In many B2B sales scenarios, prospecting is a crucial step that precedes the sales opportunity. This is particularly true in industries like manufacturing, distribution, and reselling, where effective prospecting bridges the gap between a lead and a sales opportunity.
Bhea is a leading SugarCRM partner, specializing in CRM implementations since 2004. Contact us for any CRM review or implementation needs.
