A lot of people use the terminology lead, contact and account interchangeably in regards to prospects in their CRM database. However when it comes to Salesforce, there are actual differences in the three. Differences that may result in some confusion, and as a result you may not get the functionality you expect in certain situations.
To start, I’ll explain the differences.
Lead: a lead in Salesforce is the first step in a prospect’s sales journey.
Contact: leads can be converted to a contact. Typically this is done in either of the two scenarios: 1.) when the lead has become sales qualified, 2.) when a new lead for an existing customer is created in your sales database.
Account: when you convert a lead to a contact, it must be attached to an account. An account can be created individually, with no contacts attached to it. Or you can create an account during the lead to contact conversion process.
That leads to me to the next commonly asked question; when should I convert a lead to a contact? This may vary based on your sales process, however I suggest converting a lead to a contact when you can answer the following 3 questions:
- The lead has a legitimate need for my solution
- The lead has the budget to purchase my solution
- The lead has a set time frame for making the purchase decision
Note, once you convert a lead to a contact, you cannot convert it back to being a lead. One thing that is extremely frustrating as a result, is if the prospect decides to go with a competitor’s solution, your only options are to either delete the contact & account, or continue to keep it assigned to the sales person. Unfortunately unlike a lead record, accounts cannot be assigned to a queue, such as a nurture or discard queue. If this is something your business needs, I suggest upvoting this feature request in the Salesforce Trailblazer community: https://success.salesforce.com/ideaview?id=08730000000BrESAA0
You may also ask, in what circumstance would a new lead be created for an existing customer? This may happen as your existing contact leaves the company. Alternatively, it may be a new member of the staff that has taken interest in your solution. It is good practice to convert leads for existing customers into a contact, and attach it to the existing account record. This will help maintain efficiency, so your outbound/new business sales people are not calling on existing accounts. It also ensures that your account management/inside sales team has all relevant contact information listed on the account page. If your organization struggles with this, know you’re not alone. It is common, which is why I suggest doing routine audits of your Salesforce database.
I hope this helps your business clarify the confusion over the differences between a lead, contact, and account. I further suggest, as part of your training protocol distributing a definition of the three. This will prove to be advantageous, especially amongst your marketing, sales and finance teams, who may each have their own definition of the three. This will undoubtedly result in confusion and make it difficult to track the success of your sales, and marketing teams. Every team working off the same definition will result in aligned expectations and improved cross-department cohesion.