How Salesforce Manages Leads, Contacts, Accounts and Opportunities
By Mark Christie, Salesforce Training
To get the most out of your Salesforce implementation, it helps to understand how to properly categorize someone’s name and company within your sales funnel. This post covers the fundamentals of how the terms Lead, Contact, Account and Opportunity are used within Salesforce.
Think of a Lead as someone’s business card – it’s information on how to reach an individual. The Lead has expressed an interest in learning more about us, or we have determined that this is a person we want to follow-up with. A Lead in Salesforce is a person, not a business, although that person may work for a company that we want to do business with.
The basic rule of thumb: Any new person affiliated with a company that we don’t currently do business with should be entered into Salesforce as a Lead.
NOTE: Often we see salespeople input new names as Contacts. If you have a limited number of prospects to sell to, then this is actually the preferred route. However, most businesses have an unlimited supply of prospects. Therefore, they should enter all of their new prospects as Leads.
Set a Time Limit for Leads
Because we want to ensure that any view of data gives us insight for action, it’s important that we keep the Lead Record clean and up-to-date.
At SalesForce Training, we have a straightforward rule – No Lead sits in the Lead Record for more than two weeks. We set these basic categories for each Lead:
- Working – Contact Attempted
- Working – Contacted
- Closed – Not Contacted
- Closed – Not Qualified (or Not Interested)
- Closed – Spam
- Future Potential
The assigned salesperson has the responsibility to reach out to the Lead and quickly ascertain the correct status and re-classify i.e move the Lead out of the Lead Record and classified as something else.
Many salespeople struggle with re-classifying a Lead that is not connected to an Opportunity. As eternal optimists, it is their nature to want to hold onto the Lead until such time as they can convert it into a revenue prospect (i.e. an Opportunity).
Remember that re-classifying a Lead as Not Qualified doesn’t remove the Lead forever. It simply moves it out of any View that lists Current Leads.
The key to managing a Lead is to assign a follow-up task, whether it’s a few days out, a few weeks or longer. The goal is to ensure it’s not sitting in the Lead queue looking like something current. This queue should only be reserved for the freshest leads, demanding immediate follow-up.
Contacts and Accounts
The key behind Salesforce’s architecture is how you treat a Lead that may result in a deal…one day.
If a Lead has been qualified as a potential source of business, it should be converted. When you convert a Lead in Salesforce it simultaneously becomes both a Contact and an Account.
An Account is the actual company, and the Contact is the person within the company – the same person from the Lead.
NOTE: Confusion can arise in how Salesforce uses the word “Account”. Many salespeople call their book of business their “accounts”. In Salesforce, an Account is a label for a business entity – one that we already work with or hope to work with.
Whenever we convert a Lead to a Contact and an Account, we also have the option of converting it to an Opportunity. An Opportunity is a future event associated with revenue. It is the default option after you have converted a Lead into a Contact and Account.
Salesforce assumes that, when you convert a Lead, it is because you have uncovered some type of revenue potential within an Account. This is revenue potential is the Opportunity and forms the lifeblood of every sales funnel.
Set Standards for Salesforce Opportunity Creation
How should you define an Opportunity, and when should you convert a Lead into one? This differs for every business and depends on your business sales cycle and customer’s buying cycle.
One of the recommendations we give to our clients is to have a fairly rigorous standard for Opportunity conversion.
While we want to move Leads out of the Lead category fairly quickly, we don’t have to create an Opportunity. They can simply become Accounts and Contacts, with the potential to create an Opportunity at a later date.
Minimum Requirements for establishing an Opportunity
At a minimum, we recommend an Opportunity contain the following information:
- The business challenge being solved
- A projected Close Date
- A projected Deal Size (amount of revenue)
- Competitors being considered for the project
- The name of the final decision-maker.
Our advice to our clients is that your salesperson should only create an Opportunity once they can provide some key detail around these five areas. If they can’t, then it’s Sales 101 – Go back and qualify some more.
“This was a great training session and I know that our staff will benefit greatly with this new knowledge.”
VP, Business Development, LeadingAge
Salesforce is a means to an end
At the end of the day, Salesforce is a tool designed to take your existing sales processes and embed them within its framework.
Salesforce on its own won’t make salespeople sell more. Every company should have a framework for how it wants to treat Leads and Opportunities prior to setting up a CRM. It is the job of the CRM (Salesforce or any other) to take these rules, and provide and simple and effective tool to automate it and make the data easily accessible to everyone.
To find out more on how to ensure your Salesforce CRM implementation sets you up for success,
Salesforce Training helps organizations improve their utilization of Salesforce and increase adoption rates. With consultants and trainers across the U.S. and Canada, we are well-positioned to help sales leaders with the guidance and ongoing support to ensure positive behavior change in their sales teams.