What is the Difference Between a Lead, Account, Contact and Opportunities?

If you are new to CRMs (customer relationship management) systems, these terms may also be new.  Most CRM (customer relationship management) systems use these 'buckets' to categorize records.  Almost all clients have questioned the definitions and how to use them - with some, often, revisiting the conversation.

What's Natural to You?

The definitions seem to vary by almost everybody.  Most sales people look at an account as an existing customer - that could potentially provide a lead for new business within the same company.  Or they feel a lead could be from a list of trade show attendees they met.  Some would like to turn an account back into a lead if they do not move forward with a sale.  Let's shed some light on these concepts...

Most CRMs follow a similar flow: a Lead >> converts to >> an Account / Contact + Opportunity

What is a Lead?

Remember restaurants used to have fishbowls that you would put your business card in for free lunch (maybe some still do)?  All you have is a name and contact info.  A lead, by loose definition in Zoho CRM Plus and Salesforce, is the same thing - a person (not a company) that you have contact information for.  They do not know you and you do not know them.  You market to a lead to develop interest in your product or service.  Your objective is to convert the lead into an opportunity (or transaction) to close the sale. 

Sometimes it can take some time to nurture a lead, so you leave them as a lead and may use a sub category (or subcategories) within the leads to identify their level of potential interest by labeling with levels of cold, warm or hot - or 1, 2, 3.  You can then use these sub categories along with other criteria to send email / social campaign messages to further develop interest.

What about Leads for Companies with Multiple Contacts?  Hint: Prospect.

What if you have started pursuing a lead, but still do not have a grasp on if they would be a good qualified candidate to focus on selling - but now have been connected to many contacts within that company?  We advise you should not keep them as a lead in that case, because you would have three separate leads without any cross association.  We recommend converting them into an account labeled as a prospect.  This works especially well if you sell a more complex product or service to larger organizations where many people may be involved.

Example: You call on someone you met at a trade show (a new lead) but they are not a decision maker; however, they connect you with someone you should talk to.  Do you create a lead with only the name of the second person - whom you haven't talked to - and forget the original connector?  Not ideal.  We recommend creating a lead for the first person, then convert them into an account labeled as a prospect, then add the second and future additional people as contacts under that account.  Secondly, we would recommend adding an opportunity with an initial stage of "qualifying" to keep the effort on the radar.  In essence, the opportunity becomes the lead.  I know, confusing but hear me out...

When Should I Convert a Lead?

Good question - and one asked by almost every client we've worked with.  The answer is - it depends.  Other than the example above, it depends on how soon in the sales process you need exposure and visibility for a potential for a transaction to start.  You do not want to clutter up your opportunity funnel with deals that will not close, but you also do not want to leave everything in leads until it closes.  What makes sense for you?

Example:  One of our clients mails tens of thousands of marketing letters every month.  Each 'lead' they mailed to was already in their system.  Each had a special code used by the lead when they called in to inquire about the letter.  This company would leave the lead as a lead until they finalized a purchase.  The challenge is, they completely lost visibility to how far the lead had actually progressed in the sales process if they didn't finalize the purchase.  We recommended they start converting and marking their stage for where they left it so their reps could more efficiently follow-up with each that didn't close instead of just working to close new leads - thereby increasing their sales.

Different Types of Accounts

Accounts can be split into different buckets: they do not have to just represent customers.  We have clients that have created separate status (there is a field labeled type in Zoho and Salesforce): prospect, customer, past customer.  Pretty self explanatory - the first is someone you have yet to sell to, the second is one you have sold to and the last is someone that has purchased but hasn't for a certain period of time (or perhaps a contract ran out).  You set the default status as 'Prospect' so that when you convert a lead, it will automatically set it as a prospect without having to change it.

Having them in different buckets allows you to build filtered lists and reports.

What Is a Contact?

In most cases, a contact is a person that belongs to either an account or vendor (Zoho has a separate tab for vendors, Salesforce does not).  You can have multiple contacts associated with either.  However, if you have the enterprise level of Salesforce with person accounts enabled or Zoho without the company field required, you do not need to have a contact 'belong' to an account.  A contact can also be associated with an opportunity through something called a contact role.

Can a Contact be a Lead?

Yes and no.

A contact cannot be both a contact and a lead in the CRM - it has to be one or the other.  However, once you have a contact within an existing account, and they let you know they may be interested in buying again, you may consider them a 'lead', but only as a new opportunity with that contact / account.

What is an Opportunity?

An opportunity should be number one focus of your sales efforts - this is where the money is.  An opportunity is typically created when you convert a lead.  Both Zoho CRM and Salesforce provide the option to create one upon conversion.  As mentioned before, if you have an existing account/contact, you would create a new opportunity versus a new lead to represent the potential transaction.  These can be renamed in Zoho CRM Plus and Salesforce to anything that better fits your terminology: Deal, Potentials, Orders, etc.

Most opportunities go through a series of stages or milestones as it works through the sales process - until it is 'won' or 'lost'.  The stages allow you to categorize where they are now and identify what the next step / stage / milestone is to nudge them towards.

Once the opportunity is won, you can have a workflow automatically update the account status to 'customer'.

As you go through your sales day as a sales rockstar, you will add new leads, convert leads into new accounts / contacts / opportunities as well as create new opportunities for existing accounts/contacts. 

Hope that helps!  If not, feel free to reach out via a comment below, start a chat in the lower right or reach out via our contact form here.

Good selling!
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Remember that as a child?  At the top of the seemly enormous high dive platform that may have only been a few feet over the water - will I pass out on the way down?  What's going to happen to me when I hit the water?  Some think pure doom others are ready for the adventure.  Some were able to jump off freely on their own, others needed a little encouragement to take the first step.  

Like with trying anything new, taking a step into the unknown is, well, unknown to us.  Selecting and 'implementing' a CRM (customer relationship management) software is really no different...but now, with our livelihood at stake, it's even harder to make a move to something different - for fear everything will come crashing down - or belly flop.

It doesn't have to be that way.

Over the years I have helped numerous people from the frozen panic of sitting on the proverbial edge of the pool - by focusing on one thing - simplicity.  There are too many CRMs to name at present and they all do amazing things - some specialized for a particular industry others that provide incredible (but overwhelming) customization possibilities.  We have narrowed down our focus to what we feel are the two best for any business: Zoho CRM Plus and Salesforce.  Both of which are customizable to maximize any, yes any, business model.  But you do not need to get overwhelmed by all of the things they can do...

Keep it simple.

What do you need to track - right now?  That is the first question I would ask prospects and clients - after identifying the best CRM for them based on present needs, price point and future growth possibilities.  Other posts talk about those features.  Let's not worry about all of the other amazing things the software can do for you - let's focus on what's important now.

See, what CRMs do is help you keep track of stuff.  With a CRM, you can log all communication with your prospects and customers, keep track of and measure the deals you're working on and much more - just by using it each day.  The idea, if you're using it right, is that you do not have to continue trying to remember everything - just work towards moving things forward with your prospects / customers each day and record your activities and set tasks for the future.  All of the information entered is instantly reportable at any time.

Most companies, if they do not have a CRM, typically manage their business with spreadsheets.  If this is you, don't be embarrassed - you're not alone.  Spreadsheets are easy to start creating the simplest tracking of what is happening in sales, operations, etc.  The great thing about spreadsheets is they are basically the same structure as a CRM database - the columns equate to 'fields' in the CRM and the rows are the individual records.  This means moving the data from what you have now to a new system is pretty easy.

So then what do you need really?

As mentioned before, there are a plethora of CRMs in the marketplace today.  We have narrowed our focus to two - the difference between the two comes down to truly how much customization you may need in the future.  If you are a larger enterprise, you are likely to lean towards Salesforce - it is the most customizable used by companies large and small - and likely will require a consulting firm to help implement it - but not always.  

For most small businesses, Zoho CRM Plus will provide everything you need to support your customer lifecycle in an intuitive format without having to cobble together different software products hoping they fit together: from website engagement, social selling, product tracking, quoting, sales management, surveys, email/social campaigns, customer service portals and project management.  Additionally, you have the ability to add on invoicing / accounting and inventory with connections to eCommerce options.

I know, it may seem overwhelming - again, do not think of all of the things it can do - just focus on what you need now...and go from there.  The rest of it will fall into place.

Start small

If you use Outlook and spreadsheets to manage your business - you can emulate the same in either CRM - and be able to access from anywhere with any device.  Think of the power!  But start small - start by simply importing your accounts and contacts (look for other posts on how to do this) and learn how to then start tracking orders / deals / opportunities (other posts or our YouTube affiliate iLearnCRM).  Everything can grow from that foundation.  Take baby steps.  Find a low cost advisor or coach to help you along the way if needed - sometimes it really helps to have someone encouraging you to just jump into the water.

Education / Learning how to use

Salesforce has developed their own TrailHead program to help people learn their software on their own for free.  Zoho regularly provides webinars for their products - and you can find plenty of videos on YouTube if you have the time.

We are developing our own simple online series of courses to help people get started with Zoho Plus - as well as short videos on YouTube to help answer typical questions or to cover new features that may be helpful.  It isn't rocket science - but some of the concept may be new to you - we like to keep it simple - keep the price right - and help our clients succeed.  We would like to remove the anxiety - let us know how we can help.  Feel free to comment below.

Need help choosing?

If you're not sure which one is right for you, feel free to give us a call, click on the chat icon in the lower right, or click the link below for our contact page for a quick consultation - we can help you identify your specific pros and cons of each as well as develop a simple migration plan to get started.  

Contact us here

Dive in - the water is fine!

We would recommend starting with a trial - I guess this, in the theme of this post, is like testing the waters. :)  If you go to the Salesforce website, you can easily start a trial there. 

To start a free two week trial of Zoho Plus, click here.