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I ask a client or prospective client those questions because I want to know what the term means to them. Is a lead anyone who provides an email address at your Web site? Someone who has made a phone inquiry? Or what?
You can try this experiment in your own organization. Odds are, you will find no clear understanding on these terms. Alarmingly, this is even true of the term “customer.” Many companies, of course, understand that they have multiple “customers” at a given account, such as the end user, the technical buyer, and decision maker or purchase approver. But levels of awareness differ as do the definitions of those customers. The situation becomes even more complex for companies selling through distributors and other channels. Is the channel the customer? Not really, but it’s easy to mistake it for one. And doing so can be a big mistake.
If there is no clear agreement on the meaning of terms like lead, prospect, opportunity, and customer, it’s because people haven’t gotten together to define them. This happens when sales and marketing are siloed, and it reinforces those silos.
Getting better at finding, winning, and keeping customers calls for developing a deep understanding of the materials you’re working on, which means defining your terms. Definitions — or, more properly, operational definitions — are foundational to process improvement. They are a prerequisite to knowing what you are working on, to measuring activities and results, and ultimately to solving problems and improving performance.
Fortunately, most sales and marketing people know how important definitions are, and respond positively to honest discussions about definitions related to their work.
When people are struggling to achieve sales goals, definitions are often a culprit. Take the time to get team members to tie what their words mean to reality and identify how they know these things. Be specific. Challenge each other: What makes a qualified prospect or a decision maker, specifically? How do you know? What are the observable characteristics of qualified prospects and decision makers? What have your contacts done that prove they are what you think they are?
From: Sales Process Excellence, by Michael J Webb, Chapter 3 page 49.