I’m often asked “what’s the difference between a lead and an opportunity?”

Let’s define both first…

LEAD = a contact or company that you’ve begun a conversation with is essentially an unqualified sales lead.  They usually have no current or past relationship with your company.

OPPORTUNITY = Once there is a budget and a timeline, there must be both, a lead becomes an opportunity.  It signals the beginning of your sales process with a potential or existing client.

Many CRM systems allow for contacts as well as leads and opportunities.  In a nutshell, CRM contacts are the people that your company will have or already has an on-going relationship.  CRM contacts typically had been qualified as a potential sales opportunity at one point. Contacts may also have different types of relationships with your company, such as a supplier or colleague.

The thinking behind separating Leads and Contacts in your CRM is to separate the unqualified sales leads from the qualified sales opportunities. The goal is to keep your sales team from spending time on disinterested leads, and focusing on getting real results for your Sales Pipeline report.

Leads must be contacted by your sales team and either qualified or disqualified as an opportunity.  Leads will be converted into accounts, contacts, or opportunities if they are qualified.  Otherwise they are deleted or archived.

Opportunities are potential revenue-generating events, or sale to an account, that needs to be tracked through a sales process to completion.  The different sales stages the opportunity moves through for example, demo, proposal or review indicate the value of your sales pipeline by sales stage.