• PG

Leads vs. Opportunities

Updated: Nov 4


If salespersons are not clear on the difference(s) and sales teams do not agree on the same, then sales are ad hoc, pipelines questionable, and sales forecasts erroneous.



In the post Sales vs. Marketing, we described the overall marketing and sales conversion process.


Suspects → Prospects → Opportunities or Deals → Customers


In the posts Suspects vs. Prospects, and Prospects vs. Leads, we clarified what suspects and prospects are and how they are related to leads.


In this post, we focus on leads and opportunities and the difference(s) between them.


Once a lead is qualified, it is “converted” into an opportunity and enters the opportunity pipeline or funnel.


Leads are Suspects and Prospects


Leads are the suspects and prospects that sales teams pursue in the earlier part of the marketing and sales conversion process or the end-to-end sales process.


Suspects may not be interested in what you have to offer whereas prospects make their interest evident.



Lead Qualification


Through an analysis called #BANT, sales teams “qualify” prospects or leads. BANT stands for Budget, Authority, Need, and Timeline.


B. Has the prospect or lead set aside sufficient budget for our offering?


A. Are we dealing with the decision-maker directly?


N. Do they have the need and can we fulfill it?


T. Will they buy within our timelines?


If and only if all the answers to these questions are a “yes,” then the lead or prospect is said to be qualified.


The qualification process is essentially a go/no-go decision for sales teams. They decide which leads to proceed further with and which to drop.



Lead Conversion into Opportunity


Once a lead is qualified, it is “converted” or "upgraded" into an opportunity and enters the opportunity pipeline or funnel, the latter part of the sales process.


Opportunities are what sales teams pursue towards deal closures in the latter part of the sales process.


More importantly, opportunities are where a company commits a lot more of its resources, time, and effort into the sales process.



Leads are People and Companies, Opportunities are Not


Here is an important distinction between the two concepts. Leads, suspects or prospects, are persons and companies that sales teams communicate with.


On the other hand, opportunities are neither. They are specific sales deals being pursued including the estimated dollar amounts.



Implementation in CRM


It is extremely important that the CRM software used by your company is able to distinguish between and track leads and opportunities. Let's review 3 leading CRMs here to understand this.



Salesforce and SugarCRM


In Salesforce and SugarCRM, for example, leads and opportunities are available as two distinct CRM "objects." You have to decide for yourself and classify something as a lead or an opportunity.


The lead to opportunity conversion in Salesforce and SugarCRM is through an explicit action (e.g. click of a button or selection from a menu).


As part of the conversion, an associated account and contact are also created. Accounts and contacts are the other two CRM objects in Salesforce and SugarCRM.



Hubspot


In Hubspot, the implementation is different.


Leads are not a separate CRM object in Hubspot although deals are.


Leads and opportunities are tracked under the lifecycle stage property of two other CRM objects in Hubspot: contacts and companies.


Conversion of a lead into an opportunity in Hubspot consists of changing the lifecycle stage as well as creating a new deal.



Impact on Sales Pipeline


How you distinguish between leads and opportunities determines the quality of your pipeline. In Salesforce, the sales funnel only reports against the opportunity object and does not include leads.


If something is indeed an opportunity but you classify it incorrectly as a lead, then you are missing out on that opportunity in the sales funnel.


On the other hand, if something is not an opportunity but you classify it as an opportunity, then you have a lead in your sales funnel.


In either case, your sales funnel is inferior in quality.



The Bottom-line


The overall marketing and sales conversion process thus has two parts. In the first part, leads are converted into opportunities. In the second, opportunities into closures and customers.


Lead qualification demarcates the two parts or halves of the sales process.


Leads (Suspects → Prospects) → Opportunities or Deals → Customers

Never Miss a Post. Subscribe Now!

Please enter your email and click the Subscribe Now button.

© 2020 SalesSuccess.io 

  • Grey Twitter Icon