Understanding CRM Leads vs. Opportunities: Key Differences & Sales Implications
Growing any business requires leads and opportunities to convert into paying customers. Understanding CRM leads vs opportunities, and how each plays a role in your business, is important to maintain an efficient CRM foundation and an effective sales process.
Managing CRM leads and opportunities drives an improved sales pipeline with visibility into each lead and revenue forecasting. Missclassifying your leads and opportunities can hinder your sales efficiency.
In this article, we dive into what defines a CRM lead and opportunity, when to convert a lead to an opportunity, and best practices for managing your leads.
What Are CRM Leads & Opportunities
CRM leads are individuals or companies who have shown a potential interest in your product or service. CRM opportunities are qualified leads that have shown a high level of interest in your product or service, and have gone through a lead to opportunity process.
CRM Lead example: A site visitor downloads a product catalogue, showing an interest in the marketing asset. At this point, you don’t know yet if the visitor is a qualified lead or not.
CRM Opportunity example: That same site visitor attends a webinar and requests pricing information, after they have downloaded the first catalogue. Through a form fill-out, they have shared their timeline for implementing your solution. This lead is now an opportunity and is ready to move forward in the sales funnel.
Definition of a Lead
The definition of CRM leads is potential customers who are at the top of your sales funnel. These leads come through a marketing activity, or event, such as downloading a PDF, signing up for a webinar, newsletter, demo, or through digital ads. CRM leads need to be vetted to see if there is a serious intent to purchase your product or service.
Definition of an Opportunity
The definition of CRM opportunities is qualified leads that have been vetted and are an opportunity to be converted into a customer. These qualified leads show an interest in learning more about your product and move through the next phase of your sales funnel. In this stage, budget discussions, business needs, and timelines are discussed.
The Key Differences
There are several key differences between CRM leads and sales opportunities.
- In the sales process, leads are at the top of the funnel, acquired through marketing assets, email, and ads.
- In the sales process, opportunities are at the mid-to-bottom of the funnel, ready to be engaged, depending on your qualification process.
- Leads have a low to unknown interest in buying.
- Opportunities have a high intent to purchase and show signs they are ready to be engaged.
- Leads are unqualified until more information is uncovered. The type of lead capture typically includes basic information, such as contact details and the source from which the lead was acquired.
- Opportunities are fully qualified leads with a high intent to convert into customers. The type of information captured here includes budget, timelines, deals, and discussions with decision-makers. In this stage, qualified leads are assigned to sales reps.
Why Lead & Opportunity Management Matters for Sales Success
Lead and opportunity management matters for sales success because it gives your team a clean CRM to nurture leads and move them through the qualification process for opportunities. A clean CRM offers more accurate revenue forecasting and visibility into each lead.
A good CRM management organises your sales pipeline to let your sales team know which leads to focus on, and which stage they are in to turn those CRM leads into an opportunity.
Poor CRM management leads to missing follow-ups with qualified leads and a messy sales pipeline that has inaccurate and out-of-date data. This leads to your sales team wasting time chasing unqualified potential leads and a poor management structure.
How you manage leads and opportunities is what will help your sales team be successful.
Improved Sales Pipeline Visibility & Accuracy
Lead and opportunity management matters for sales success because it offers visibility in your sales pipeline, and accuracy on finding information on whether that lead is qualified and an opportunity, or not. With better management, your sales team gains accuracy in knowing what is in the current pipeline, which leads have gone cold, and which leads to begin focusing their efforts. This clarity will help your sales team align opportunities with the next stage of the sales funnel.
Better Lead Nurturing & Qualification Processes
Lead and opportunity management allows your marketing and sales teams to nurture leads better and categorise them for a clear and defined qualification process. This ensures a smooth transition from a CRM lead to the opportunity process and achieves a higher conversion and close rate for sales success.
Not every lead that is acquired is prepared to convert into a customer. A clear management process allows sales teams to know which leads are worth the effort and where they each fall in the qualification process.
More Accurate Revenue Forecasting & Reporting
Managing your leads and opportunities effectively will make revenue forecasting and reporting easier and more accurate. Your teams will be able to trust the data that is in the sales pipeline and plan accordingly, where each lead is moving in the sales process. This will build a predictable sales engine for your sales team.
When to Convert a Lead into an Opportunity in Your CRM
Converting a lead into an opportunity in your CRM is the most important transition in your sales pipeline. Knowing when to move leads forward will help your sales team engage effectively and generate sales.
Moving leads too early without a solid qualification process results in wasted time with an unqualified lead. If you wait too long, you could miss the opportunity to engage with a lead while their interest is high in what you offer.
Some key indicators that a lead is ready to convert into an opportunity are:
- If they have expressed a high intent to buy.
- Have discussed the budget.
- Has a defined timeline to make a buying decision.
- The product fit is clear.
- You have met or identified with key decision stakeholders.
If your lead has expressed a high intent to buy and has disclosed their budget, this is a clear indicator that they should be engaged with a sales team member. If your lead has given any indicators that they are financially aligned with your pricing, then they are ready to be moved to the next stage in the sales process.
If a lead has engaged with your content multiple times and has moved beyond browsing, this is a start to begin nurturing leads and moving them as they progress in the qualification process. After identifying and having conversations with key decision stakeholders to discover if the product fit aligns with them, you can view these leads as a high opportunity.
Automation can streamline the handoff process from a lead to an opportunity. A CRM automation process can create workflows that automatically convert leads into opportunities based on the criteria that you set as a qualification process. By using automation, you can reduce admin work, track leads through your CRM sales pipeline stages, and ensure qualified leads don't fall through.
Best Practices for Managing CRM Leads & Opportunities
In order to maintain a clean sales pipeline that is efficient and effective for your sales team, you need to build a CRM structure that supports the foundation of managing your leads. Managing your CRM leads and opportunities effectively will enable you to optimise your sales process, maximising your sales team's time and converting leads at a high rate.
Without a structure, your leads and opportunities go stale, high-intent leads get overlooked, and your team wastes time and effort on the wrong leads. Use a clear criteria for lead qualification, automate lead scoring and the handoff process, and regularly review lead and opportunity records to manage efficiently.
Use Clear Criteria for Lead Qualification
Before a CRM lead becomes an opportunity, it needs to be vetted by your sales team to meet a clear criteria to become a qualified lead. Set a framework that clearly defines what makes a lead qualified. It could be a lead's budget, timeline to make a purchase, product interest level, or if they are in a specific industry.
Using a CRM tool, create custom fields for these key qualifications that are easy to track for your sales team. This keeps your sales pipeline focused on qualified leads. Setting clear criteria helps your team stay aligned on what an opportunity looks like and when to engage.
Automate Lead Scoring & Handoff Processes
A best practice to manage leads and opportunities is to automate the lead scoring and handoff process. Automation ensures that those qualified leads turn into an opportunity and are flagged for your sales team to begin the sales process.
Implement a scoring model based on the leads' behaviours and demographics. For example, how often a lead interacts with your site and acquisition materials, such as email opens, website downloads, or additional information. Include data such as job title, company, and industry. This will help score the lead and determine if they are qualified for the opportunity or not.
Automate notifications and the handoff process when a lead reaches a certain threshold based on your criteria. Trigger automatic notifications and automate the opportunity creation so that the lead is ready to be handed off, with next steps.
Automation helps your CRM system and team know what to do next and when the handoff process happens. This ensures the lead qualifications are consistent and answered for every lead that comes through.
Regularly Review Lead & Opportunity Records
Regularly review lead and opportunity records to ensure you maintain a proper and healthy CRM hygiene. This helps your CRM data stay up to date, clutter-free, and ensures this infrastructure works well for your sales team.
Set up a biweekly pipeline review to track the progress of your leads and opportunity records, and archive any cold leads. Clean up any duplicate information, incomplete records, and outdated data at least quarterly to ensure a healthy CRM.
Utilise filters and CRM reports to view leads that haven’t been contacted, and set a timeframe to determine what to do with these leads. Ensure leads are being followed up on, moved to an opportunity, or archived. A healthy and clean CRM keeps your team working efficiently, with confidence in the data you have.
Refine Your Sales Pipeline with Prospect CRM
Manage your CRM leads and opportunities efficiently with Prospect CRM. Prospect CRM helps your sales team turn leads into revenue by providing you with full visibility into your sales pipeline, better lead qualification, and revenue forecasting with strong reports.
With built-in tools for automated handoffs, lead scoring, and opportunity tracking, your team can spend more time on revenue-building activities and closing deals. Sign up for our 14-day free trial and discover how Prospect CRM features can drive efficiency for your business.
