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 –What’s the difference? 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 fundamental question of “what is the difference between a Salesforce lead and a Salesforce contact?”
A Quick Breakdown of Salesforce Leads vs. Contacts
Using both Leads and Contacts is the default Salesforce way, but this creates complexity. Leads are their own object with no purchase history and, at some point, get converted into Contacts and cannot revert back to Leads. Contacts are customers, partners, or affiliates and must have an Account.Many #Salesforce customers choose not to implement leads to simplify the #salesprocess. @NuvemConsulting explains why you should: Click To Tweet
What does Salesforce consider 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.
What does Salesforce consider 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.
4 Key Reasons to use Salesforce Leads
The Certified Salesforce Consultants at Nuvem almost always recommend starting the sales process in the Leads object. It will save your company time in the long run, make your processes more organized, and help with tracking marketing ROI and the customer lifecycle. Using Salesforce Leads gives you insight into marketing performance while enabling a more organized sales process.
These are our 4 favorite reasons to utilize Salesforce Leads:
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 considerable interest in your products or services. Sometimes Leads are new Contacts at existing Accounts. In other scenarios, Leads enter your database via a Web-to-Lead form or a marketing automation system. Still, 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 might also consider that Leads can serve as a valuable prospect tracking mechanism to track funnel movement before adding qualified Leads to your sales forecasting and Opportunity funnel. Clearly define these stages using the Guidance for Success and Key Fields functionality available in the Salesforce Lightning Interface. Use a marketing automation tool such as Pardot to grade and score Leads before they are passed to sales, improving 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 they sourced new business or new business at existing accounts. Lead Source reports can be quickly built and added to a marketing executive dashboard.
Salesforce Campaigns are 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 it to the return using the campaign’s 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 creating a multi-stage customer journey to illustrate pipeline performance fully. Using Salesforce reports, you can modify your Lead nurturing and Lead qualification tactics using targeted data indicating points where leads may drop-off or lose momentum in your process.Part of clearing the noise of #SalesforceImplementation is deciding where you stand with Salesforce leads vs. contacts. Here’s what @NuvemConsulting recommends: Click To Tweet
4. Lead Nurturing by Lifecycle Stage
When a Lead reaches the point of a Contact, marketing and sales can assume that a Lead is qualified and a viable Opportunity exists. But a lot sometimes needs to happen for a Lead to reach this stage.
This is how you convert a Salesforce Lead into a Contact:
- Find the lead you wish to convert. On the detail page for that lead, click Convert.
- In the Account Name field, create a new account or find an existing one. Be aware that the lead conversion will preserve existing account data by default. You can opt to overwrite existing information.
- Name the opportunity in the Opportunity Name field. You can decline to create an opportunity by checking the box.
- In the Task Information area, schedule any follow-up tasks.
- Click the Convert link!
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 tie to specific actions such as opting-in to an email newsletter, downloading a white paper, or requesting a quote.
Part of clearing the noise of Salesforce implementation is deciding where you stand in the Salesforce Leads vs. Contacts debate. Still confused? Nuvem’s Salesforce Consultants can help you take your Salesforce implementation to the next level in a way that makes sense for your unique needs. Reach out for a free consultant review from our experts.
This article was originally published on February 13th, 2017. It was updated on October 29th, 2020.