The term “prospecting” has its origins in the California Gold Rush. Forty-niners (named for the year these fortune seekers began to arrive in droves) would sift through rocks and dirt, keeping their eyes peeled for the shimmer of precious metals.

Over 170 years later, most of the “prospectors” in San Francisco rely more on their laptops than on their pickaxes. But the sales prospecting methods they engage in today are still aimed at uncovering golden opportunities.

Of course, many of their prospecting efforts simply don’t “pan out.” But if you develop a deep understanding of the process, sales prospecting is still one of the best ways to produce valuable, lifelong customers who will help your business grow.

What is prospecting?

Prospecting is the way sales reps find and engage with prospects (leads that are qualified) and set the sales process in motion. Sales prospecting can take the form of a cold email sent to someone who fits your buyer persona, a cold call to a consumer in your target demographic, or a message to a qualified lead found on LinkedIn.

The basic steps of the sales prospecting process include:

• Research: Find out everything you can about a potential customer. Specifically, you want to learn how good a fit they are for what you’re selling and how you can craft a personalized message. In the B2B world, research is often done by looking at a lead’s LinkedIn page and social media accounts and reading about their company.
• Qualification: Determine whether a consumer is worth pursuing, and if so, how to prioritize them. Prospective buyers are usually ranked by their likelihood of becoming a customer and/or their potential value to your business. These qualities are typically assessed through lead scoring.
• Outreach: Spend time crafting a personalized pitch for each prospect. This doesn’t need to be a hard sell—you may just send them a helpful resource or informational article, for example. Contact them via the channel you believe they prefer, whether that’s email, phone, or social media.

What’s the difference between leads and prospects?

Though the two terms are often used interchangeably, there’s a subtle yet important distinction between leads and prospects.

The easiest takeaway for understanding the difference? All prospects are leads, but not all leads are prospects.

Leads are often people who’ve expressed some interest in your brand, services, or products. Perhaps by visiting your website or engaging with some marketing materials, they’ve been identified as potential customers.

Prospects are people who’ve been qualified as leads worth pursuing. They may have shown a level of interest in your business that automatically qualifies them, like signing up for a free trial or demo. Prospects can also be people who haven’t shown any interest but are still qualified because of who they are, such as an executive at a company in the market for your services.

Though leads and prospects are categorized and prioritized differently, the ultimate goal is the same for both: to nurture them until they convert into a paying customer.

What’s the difference between sales prospecting and lead generation?

Most organizations use a combination of lead gen and prospecting strategies. However, they are still two distinct practices and are traditionally led by two different departments.

Lead generation is largely the responsibility of the marketing department. It’s their job to create content and web experiences that attract leads—such as blog posts, advertisements, videos, webinars, and gated content.

For example, a B2B company’s marketing team might create an ebook or white paper for industry professionals. To access the content, website visitors have to fill out a contact form that asks for their name, job title, company, and email. Using a lead-scoring model, marketing will qualify the lead (which is to say, determine if the lead is worth pursuing). Marketing-qualified leads are then handed over to the sales department as prospects for reps to contact.

This process is largely automated. Many businesses use a CRM to capture and score leads. Each lead is assigned a numerical value based on variables connected to their likelihood to convert. Points are often based on a lead’s status in a company or their website activity (such as whether they visited a pricing page).

Sales prospecting, by contrast, is primarily the responsibility of the sales department. It’s also a much more manual process. For example, a salesperson might find a qualified lead on LinkedIn and then message, email, or call them directly.

That type of one-to-one engagement can be more time- and labor-intensive than the one-to-many approach of lead generation. But it’s also more targeted and personalized, meaning it often reaps more meaningful (and profitable) customer relationships.

When does prospecting take place in the sales process?

Lead generation and sales prospecting both occur at the start of the sales process. A company needs to discover, qualify, and contact leads in order to begin the journey of converting them into lifelong customers.

After prospecting, sales reps move on to the next steps of the sales process:

• Presenting: A sales rep delivers a personalized sales pitch to the prospect (and possibly other key decision-makers) in a sales call or meeting context. The rep must have a deep understanding of the prospect’s pain points and be able to articulate how their product or service will address them.
• Quotation: The rep discusses the terms and prices with prospects who wish to move forward with the deal. After addressing issues like contract length, payment terms, and available features, the rep sends a quote to the prospect. The quote serves as a starting point for negotiations.
• Closing: At this stage, the goal is to persuade the prospect to officially sign a contract. The sales rep may need to attend to last-minute concerns, like adjusting pricing or other details.
• Won/lost: The sales rep has officially closed the deal...or not. Reps who successfully win a sale should keep in touch with the customer and develop a long-term relationship that could lead to upsells or referrals later on. Reps who lose a deal should evaluate what went wrong and work on their lead nurturing tactics.

Why is sales prospecting important?

As the first stage of the sales process, prospecting is fundamental to success. You won’t win over many customers if you don’t have qualified leads to contact.

The more you master the art of prospecting, the more opportunities you’ll have to close deals. According to a RAIN Group study, top performers in sales prospecting secured 52 sales meetings per 100 target contacts. Other sellers generated only 19 meetings per 100 contacts. Additionally, nearly 50 percent of the top performers met or exceeded their individual sales goals, compared to 27 percent of other sellers.

The more you master the art of prospecting, the more opportunities you’ll have to close deals.

Sales prospecting is actually fairly popular with customers as well. The same study showed that over 70 percent of buyers want to hear from sellers early in the sales process.

Of course, it may not feel like that to sales reps. Gartner found that it takes an average of 18 dials to get a prospect on the phone, and only about a quarter of all sales emails are ever opened.

It’s easy to get discouraged, but considering the importance of prospecting, it’s critical for reps to remain persistent.

Inbound vs. outbound sales prospecting

There are two ways to generate prospects. You can take the outbound approach by proactively contacting potential customers to tell them about your product or service. Or, you can adopt the inbound approach by creating and promoting content that will entice buyers to visit your website or reach out to you.

Most lead generation strategies involve inbound marketing, while sales prospecting typically entails outbound sales methods. However, there are both inbound and outbound prospecting strategies reps can use to engage leads.