Customer relationship management (CRM) is a system which manages the relationships that a firm has with its current customers and prospective future customers. Under customer relationship management, a firm identifies different stages involved in making a sale. The process starts with identifying or establishing contact with an individual or firm. This contact may then qualify as a sales lead which then can be converted to a sales opportunity, eventually resulting in a sale and becomes one of the company’s accounts. The article offers a clear explanation of two of the stages in the process; leads and opportunities, and shows the similarities, differences, and relationship between lead and opportunity.
What is Lead?
A lead is some form of a contact point or contact information that is linked to an individual or business that could result in a sale in the future. A lead is generally someone within an organization interested in purchasing a product or service offered by the seller. It is possible that the lead may not be the person who actually makes the purchase of the product or service. A lead could be someone who advises the purchase, employee of an organization, or someone who has some power to influence the purchasing decision.
The few key criteria to identify a lead include, having a requirement to purchase the product or service that is sold, being able to afford the product or service, also the lead being present in the market and on the lookout to purchase the product or service for a reasonable period of time. Even though it is not an essential criterion, having the power to make the buying decision is a strong indication that the particular individual in a firm is a lead.
What is Opportunity?
An opportunity is a sales lead that has a high possibility of turning into a sale. An opportunity refers to an individual or firm that has a strong need for the product, has dismissed their current supplier of the product, and is in the process of working out the terms of payment, signing contracts, etc. The opportunity can be a firm or an individual with whom the service provider / seller has established contact, identified specific needs and requirements, and been discussing the possibility of hiring the firm selling the product or service. An opportunity will be aggressively pursued by the sales team of the firm selling the product or service to ensure that it is finally converted into a sale and into an account with the firm.
What is the difference between Opportunity and Lead?
Customer relationship management allows a firm to manage the many relationships and interactions between the company’s current clients and prospective clients. There are a number of stages that make up the process of converting an individual or firm from a mere contact to a customer. Lead and opportunity are two of these stages.
A lead is an individual or firm that could potentially turn into a sale in the future. An opportunity is a sales lead that has qualified by presenting a very high possibility of converting into a sale. For example, an individual or firm that the seller pitches their products and services to and exchanges contact information can be considered as a lead. However, to turn this lead into an opportunity, the seller will have to establish a relationship with the lead, identify their needs and requirements, and gradually bring them to the process of discussing payment terms in preparation of signing contracts and agreements. A company will have a number of sales leads, but only a selected number of those leads will actually convert into real opportunities.
Summary:
Opportunity vs. Lead
• Customer relationship management allows a firm to manage the many relationships and interactions between the company’s current clients and prospective clients.
• There are a number of stages that make up the process of converting an individual or firm from being a contact to a lead, to an opportunity, and finally becoming a customer.
• A lead is some form of a contact point or contact information that is linked to an individual or business that could result in a sale in the future.
• An opportunity is a sales lead that has a high possibility of turning into a sale.
• A company will have a number of sales leads, but only a selected number of those leads will actually convert into real opportunities.