When implementing a CRM (customer relationship management) system, many business owners struggle to understand how standard definitions relate to their specific business processes. CRM software solutions (Salesforce.com, ACT, etc) typically use terms like lead, contact, account, opportunity, etc. which may or may not clearly apply to your business vocabulary. Usually it’s best to first understand how these terms are generally defined and then decide how (and if) to modify them to fit your specific business processes.
LEAD – anyone you think may be interested in your product or service. Leads are usually tracked by their status (e.g. open, contacted, unqualified, or qualified, etc.) and by their source (e.g. a referral, networking event, tradeshow, purchased lead source, web enquiry, etc.). Sometimes companies keep another category they call ‘names’ to track purchased mailing lists, etc. that really aren’t leads.
CONTACT – an individual (associated with an account) usually associated with a unique business opportunity. Contacts are usually tracked by their (duh) contact information (address, phone number, email, etc). Once leads are qualified and considered as potential prospects then are usually converted to a contact/account pair (and usually assigned to a salesperson).
ACCOUNT – generally an organization with whom you do business (could be a customer, vendor, partner, etc). Accounts are usually tracked by their industry (finance, manufacturing, etc.), their type (e.g. customer, competitor, partner, etc) and sometimes many other details like website, revenue, number of employees, etc. Multiple contacts usually exist within a single account (i.e. for different departments, projects, etc).
OPPORTUNITY – is a specific business potential associated with an account and contact. Opportunities are the source of sales forecasting and revenue tracking. Opportunities are usually tracked by their campaign source(direct mail, internet marketing, etc.), stage (e.g. needs assessment, proposal, closed won, closed lost, etc.), estimated revenue, probability and closing date. Generally your sales team is handed opportunities (not leads).
Remember that the overall goal is usually for marketing to generate (and nurture) leads until an opportunity arises. They then they pass along these qualified leads to the sales team to close. The overall process is running smoothly when the sales funnel is filled with thousands of leads, which turn into hundreds of contacts, and finally into tens of opportunities that keep your crack sales team fully occupied!
For more background information on CRM systems and definitions visit;
– Steve (www.SPMsolutions.NET)