There are basically three types of people you’ll interact with during the sales process:

• Leads

• Prospects (or Opportunities)

• Customers

A lead is someone who becomes aware of your company or someone who you decide to pursue for a sale, even if they don’t know about your company yet. Typically, this includes everyone in one big group, but you could also break this down further to only look at qualified leads, which are leads that meet certain qualifications to becoming customers. For example, if you’re selling pet products, a qualified lead is someone who has a pet, versus someone who simply likes the cute animal pictures on your blog, but will never buy anything from you.

Prospect is a term that’s used differently based on the company. In many cases, it is used interchangeably with qualified lead, but usually, a prospect is someone who has had some kind of contact with your company and they are still interested. All prospects are leads, but not all leads are prospects.

We all know what customers are! These are people who have made a purchase. You can further separate out people who have made just one purchase and people who have made several purchases, or repeat customers.

Inspired by the Best of Miller Heiman Sales Performance Tips Funnel Management Best Practices