After reading this blog, you should be able to understand the following concepts:
- The difference between Leads and Contacts in Salesforce
- The benefits of differentiating Leads from Contacts in Salesforce
- Why Leads and Contacts are important for marketing reports in Salesforce
Salesforce Leads vs Contacts – it’s a topic that often yields many questions.
We all want Salesforce to help us work more efficiently. With that in mind, many Salesforce customers choose not to implement Leads. While some customers want to simplify the sales process, others argue that with a finite universe of potential customers and accounts in their database, they don’t need to use Leads per the standard Salesforce sales process.
First let’s answer the basic question of “what is a Lead” vs. “what is a Contact?”
What does Salesforce say is a “Lead?”
In Salesforce, a lead is an individual with no purchase history who expresses some interest in your product or service and provides their contact information. They may have reached you through a Contact Us form, an interaction at a trade show or a phone inquiry. At this point, you are not sure if the Prospect has a clear need for your product or service.
After reviewing some marketing materials, the Prospect may ask for a quote or a sample–indicating a serious interest in your offerings. This type of action could qualify a Lead, making them eligible to be converted into a Contact, an Account and an Opportunity. In some cases, Leads are matched to existing Accounts during the conversion process.
In certain B2C scenarios, you may want to auto-convert Leads to Contacts during an e-commerce transaction. This can help marketing understanding benefit No. 2 and 3 below.
What does Salesforce say is a “Contact?”
Contacts are customers, partners or affiliates (e.g. regulators, contractors, etc.). They are engaged and form a part of your regular business activities. Customer Contacts are listed under Accounts and tie to Opportunities. Converting only qualified Leads will help you maintain accurate data as Opportunities will only populate under sales-ready Contacts.
There are many reasons to use Salesforce Leads. Read below to see why we almost always recommend starting the sales process in the Leads object.
1. Qualify New People Added to Your Database
Implementing Leads will save you time in the long run–enabling you to identify and engage those who have a serious interest in your products or services. Sometimes Leads are actually new Contacts at existing Accounts. In other scenarios Leads enter your database via Web-to-Lead or marketing automation system but they aren’t in fact Leads and need to be disqualified and removed from the database.
It’s critical to make sure your database is clean and that you manage duplicates and records coming into the system. We often see customers pollute their “leads” with qualified Contacts, which causes them to lose the ability to segment and nurture true Leads.
You can also use a marketing automation tool such as Pardot to grade and score Leads before they are passed to sales, which helps improve alignment and visibility between marketing and sales systems and processes.
2. Track ROI for Marketing Campaigns Using “Out of the Box” Tools
When all people entered in Salesforce start in the Leads object, marketing gets access to the “Lead Source” default field. This is vital data that marketing needs to understand how new business or new business at existing accounts was sourced. Lead Source reports can be easily built and added to a marketing executive dashboard.
Salesforce Campaigns is another out-of-the-box tool for marketing that shows conversion of Leads to actual viable Contacts and Opportunities. These reports are already pre-configured and won’t be as valuable if Contacts don’t start in the Leads object. You can also input the cost of marketing activity and compare to the return using the campaigns functionality. These ROI metrics can help marketing managers prioritize their resources and avoid spending on channels with poor results.
3. Track Customer Lifecycle and the Buyer’s Journey
Salesforce lifecycle reports are driven by the Lead object and depend on the creation of a multi-stage customer journey in order to fully illustrate pipeline performance. Using Salesforce reports, you can modify your Lead nurturing and Lead qualification tactics using targeted data to note drop-offs and slow points in your process.
4. Lead Nurturing by Lifecycle Stage
When a Lead reaches the point of a Contact, marketing and sales can assume that a Lead has been qualified and a viable Opportunity exists. But a lot sometimes needs to happen in order for a Lead to reach this stage.
A defined sales process and reporting structure can allow you to analyze the number of Leads at each stage of the journey and the velocity, or how quickly leads move through the funnel. The Lead Status field on the Lead object allows administrators to input multiple custom selections indicating the progress of a Lead (e.g. prospecting, marketing-qualified, sales-qualified, etc.). These statuses make up the first segment of a buyer’s journey and ties to specific actions such as opting-in to an email newsletter, downloading a white paper or requesting a quote.