Using Leads and Contacts in Salesforce.com

 

As I’ve mentioned in my previous blog post on grouping leads on accounts in Salesforce, many users in B2B sales environments struggle with the concept of distinguishing accounts, leads and contacts in salesforce.com. The distinction is important to understand for sales and marketing managers as well as salesforce.com admins, and any disconnect or lack of understanding between the common CRM objects can result in a number of issues, including:

• Proliferation of duplicate data
• Inadvertently calling customers thinking that they are prospects
• Inadvertently calling prospects who are already involved with an active opportunity

I have seen these issues occur in almost all of the companies I have worked with, and they are often caused by a misunderstanding of the purpose and difference between leads and contacts. It doesn’t help that mixed in with those to terms is a cornucopia of other terms that describe leads going through a sales process — terms such as suspect, prospect, MQL (Marketing Qualified Lead), SQL (Sales Qualified Lead), and many more. So, let me do my best to explain the distinction as I see it for a B2B sales environment.

Leads                                            

Leads contain both company-level information and personal information on a single record. This is in contrast to contacts which contain only person-level information, but are associated with an Account that should contain all of company-level data. Leads should be used to separate people and companies that you are not even sure would be a fit for your product — and with whom you have not yet established contact — from the rest of the database. This would include inbound inquiries and any leads imported in bulk to the database for the purpose of outbound prospecting efforts. Using leads requires an extra manual step of converting the lead to an account and contact so that a person is literally responsible for confirming that the lead meets the minimum requirements of the company.

Contacts

Contacts contain only person-level information, but are associated with an account that should contain all of company-level data. That is in contrast with leads which contain both company-level information and personal information on a single record. Contacts and accounts should be used to separate customers and prospective customers with whom you currently have or have had an active sales cycle based on your definition of an opportunity. Using contacts and accounts has a number of benefits including grouping multiple contacts together into a single account, and reporting on the number of companies in the database (as opposed to leads). On the other hand, it also has a greater administrative burden because reps are required to update both the contact records and company records.

The main reason you would want to keep these two groups separate from the database is that with any list you buy, and with any inbound channel into your company, you are bound to get a whole lot of junk. Keeping this junk separate helps you maintain a cleaner database of customers, qualified prospects, and the people and companies you really want to keep in touch with.

The Grey Area

The explanations I gave above are somewhat simplistic. When deciding between junk leads and qualified prospects the decision is pretty is easy. The challenge comes when dealing with prospects that you aren’t sure about. Either they didn’t give you a straight answer, or they never responded to your outreach efforts, but you are sure they are real, and could be good prospects to boot. I will discuss these in greater depth in my next post.