CRM software is robust and complex. Because of this, without experience and knowledge of CRM software and the industry, it can be very challenging to understand the differences in all of the modules and the way they’re supposed to be used. Keep in mind that not all companies use CRM the same way (and they shouldn’t), however most CRM packages have the exact same modular structure and business process flow.
By far the most common question I get asked is “What’s the difference between a lead and an opportunity?” It’s a great question and deserves a thorough explanation. To preface the explanation, there are four main modules that almost every sales organization uses; Leads, Opportunities, Accounts, and Contacts.
In the B2b CRM industry, leads are considered very high volume, and very low value. For example, your company attends a trade show and generates 500 leads (or business cards). Out of those 500 leads, 475 didn’t return any calls, 5 said they weren’t interested, and 20 said they would like to have a meeting to discuss.
Based on the above scenario, less than 5% of the leads from the trade show were interested. Because of this nature, companies generally don’t track sale amounts or closed dates on the lead level. So what does the sales rep do? They would change the status of those who were not interested to “Dead”, and convert the Lead to an opportunity for those who are interested.
In B2b selling, if you are looking at the lead record in Sugar, there are fields for First/Last name (person), and a field for the account name (company). When you convert the lead, the following will happen:
- The person becomes a Contact
- The Company becomes an Account (Typically flagged as prospect type)
- The potential sale becomes the opportunity
The sales rep would then typically enter in a sale date, as well as a dollar amount and a sales stage on the opportunity. From here, all of the communication should be managed on the opportunity. Once the opportunity has been “closed won”, the account type would then change to “customer.”
There are many reasons why CRM settled on this structure, with a few of them being better segmentation of reporting, as well as more organizational structure for the user, however there is not one “right way” to use CRM software. If you would like to discuss or see a deep dive demo of CRM workflow, please do not hesitate to reach out to the FayeBSG team. We are here to help.