What is lead vs. opportunity?

One of the most common questions asked by both newcomers and seasoned sales veterans is ‘What is the difference between a lead and an opportunity?“.

A common term used by salespersons is ‘prospect’. So what does it all mean?

A ‘lead’ is an unqualified prospect. An ‘opportunity’ is a qualified prospect.

The primary reason for separating these two primary types of prospects is to provide a ‘bucket’ to place the leads generated by the marketing department or self-generated by the sales team to be ‘qualified’ as a bonified opportunity. There is a tendency for users of CRM to want to put all of their sales prospects into one bucket and work away at creating new customers in an effort to simplify the workflow. However, it is vital that the CRM is able to segment prospects that have been qualified by the sales team. A lead could be spam from the web form or a list of names that were identified as been possible suspects interested in your products and services with no idea whether or not these people are true opportunities.

The job of the sales team is to work through the ‘leads’ to make contact and gather information and ultimately identify if this lead is a true sales opportunity. When the critical ‘conversion’ point has been reached (often unique to each organization), the lead is ‘converted’ to an opportunity.

Now a contact, account, and an opportunity are created. At this point, the salesperson can focus on their energy on the fully qualified prospects ‘bucket’ to identify the value proposition and key decision makers, create and send a quote/proposal and followup to close the opportunity as won or lost.