I often get asked by CRM users, when should I make something a lead and when should I add as an opportunity associated with a company or account.
Firstly, it will be helpful to consider the sales process as a workflow. Sales opportunities start simply as a name of an organisation or person. They could come from a database, a business referral, or you may have noted a business in your territory or industry that looks like they are worth a call.
At this stage, you have a long list of potential prospects that can be categorized in different ways, by industry, north of the river, south of the river, size of company; or whatever categories help you group and structure your leads. An important issue is simply that you may have a lot of prospects that you don’t know very much about, and with whom you haven’t yet had meaningful contact.
Certainly Leads are businesses and contacts that you don’t yet know much about. But that doesn’t really explain why CRM systems divide things into the concept of Leads vs Companies with associated opportunities.
It is easy to enter a lead than add a company and add an opportunity. To add a lead you fill out one quick page, which requires only the lead name. Other information is optional, but initially you could enter a note, set its status to cold, warm or hot, and set a next action date. You can enter other information such as a contact name, address, size of the potential sale etc, but these are all optional.
An opportunity is a little harder to enter. You would first need to add a company and contact person, then add the opportunity to the company. It would require you to enter things like the stage it is at, likelihood of closing and forecast a close date which are used for sales forecasts.
So, an easy way to think of leads and opportunities is:
- Leads: Little information has been gathered, and there is very little to distinguish from a long list of other leads that have not yet shown an interest in your products or services.
- Opportunities: More information is available. You are actively managing the opportunity to bring it to a result and you may wish to include in your forecast.
Different types of people
Another angle of Leads and Opportunities is the concept of different types of users. Let’s take the example of husband and wife team that run a busy business broking business in Perth, Western Australia. When I ask them their thoughts about their CRM, I get responses something like this:
Wife: I love getting out and networking, but I also like to keep things organized. The CRM we use is great for this. Very easy, and great on a mobile as well so I can tap or speak notes into the system while out and about. I especially like keeping on top of our main opportunities.
Husband: I know we need to stay organized but I don’t love computers. I just what to get involved with our buyers and sellers and ensure they have the advice and information they need to move forward. I need to be able to get notes into the system so nothing gets lost. I also talk to a lot of people that aren’t ready to buy or sell, but in the future may be important. So I need a way of getting these into a system with a next action date and brief note, but it has to be quick and easy.
So here we have two great operators. Both involved in sales, with different needs. Once we showed Chris how he could add a lead with a single tap, and voice record a note, he was very happy. He also adds notes to more advanced opportunities in the same way.
Karen is more detailed and keeps an eye on Chris’s Leads. She converts them to companies and opportunities after their weekly sales meetings where they agree which leads are getting more interesting and that they want to move onto their daily agenda.
The concept of leads vs opportunities is completed by considering the management of existing customers.
Exiting customers have a different level of importance for different types of businesses. While some businesses close a deal, then have little reason to stay in contact with a customer, for most businesses staying in contact and maintaining the relationship with existing or previous customers is vital and is the source of the lowest cost sales in the future. Happy customers where you maintain the relationship are also a valuable source of business referrals.
Leads are not suited to building a history of contacts notes and actions with the same Account. That is the domain of a Company or Account. Once a lead is upgraded to a company you can started keeping track of multiple contacts and opportunities and you can add actions for things like ensuring the customer receives a service call on a regular basis.
Agree some guidelines
No matter what type of business you have, or even if you are a sole operator, keeping your sales contacts, suppliers (and contractors) organized is essential. Getting the right CRM is one of the best things you can do to get organized, increase your sales and reduce the stress of trying to keep track of things in your head, on paper or in a spreadsheet.
When you start, get together with your colleagues and make sure you all agree on the responsibilities of each person for entering information. You also need to agree on a person that will be the CRM master – or administrator. This person will ensure that the other team members are entering the required information into the system, and that the forecast produced is based on up-to-date information.
Each person should understand the difference between Leads and Opportunities, and should be shown how to add information quickly into the system and access the system from mobile. Everyone also must be able to quickly access contact information from anywhere to making it easy to contact prospects and customers when out on the road.
Remember, a CRM that is loved by all increases sales and builds value. An overly complex system becomes a frustration that drains energy from the team.