CRM: Managing Leads and Opportunities

Difference between leads and opportunities

We’ve all been there. You need to find a phone number or email address for a contact. You know you have the information somewhere, but you can’t remember where. Was it in your email? On a post-it?

A customer relationship management (CRM) system stores all the information on customers, leads, opportunities and more in one place.

But CRM systems take organization one step further. With just a few clicks of a button you can know the last time you spoke to a contact, whether that was a face-to-face conversation, email or phone call. This can be especially important when it comes to your leads and opportunities so that you can turn them into customers.

Understanding the difference between a lead and an opportunity can assist you in knowing how to move them down the sales pipeline.

Leads

A lead is essentially just a scrap of information about a person or business who could possibly want to buy your product or service.  For instance, if you purchase a leads list from a vendor. You have no previous relationship with the companies on the list and have no touch points with them yet.

Opportunities

An opportunity is a lead that has been “qualified” in some way. For an opportunity, someone already has some kind of relationship with a company, even if it is just a salesperson calling and having a discussion. During that conversation, it has been confirmed that they are in the right industry, in the market (at least potentially) for your product or service, and capable of affording your product or service.

The difference

These two categories are easy for a person to understand, and every sales process uses them in some way. In the sales funnel model, for instance, it’s only the opportunities that make it further down the pipeline to the next step. Leads are the silt you have to sift through to find the gold nuggets of opportunity.

The role of the CRM is to provide tools for the management of these leads and opportunities, improving the process (and even automating it) along the way. A potential customer who is still considered a lead, for instance, would be handled by the Leads module within the CRM. As more information about the lead comes in, it is added to their listing Leads module until some event pushes that data into the Opportunities module.

Additional CRM modules would handle Accounts (companies with whom your organization has a relationship), Contacts (individuals within another company with whom your organization has a relationship), and other details. But how all these pieces fit together — or even if you need all of them  — is a much more complex question.

Do you know the difference between a lead and an opportunity? Learn how to best differentiate these terms and utilize your CRM.

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