Salesforce Leads Vs. Contacts: Understanding Salesforce

Your Salesforce sales funnel is a visual tool designed to help you nurture Leads as they become aware of your business and lead them to a sale. 

Salesforce generally divides individuals in your pipeline into four different categories: Leads, Contacts, Accounts, and Opportunities. 

Understanding the difference between Leads and Contacts will help you master your Salesforce Sales Cloud and set forth the right processes to act upon both properties in your sales funnel. 

Understanding Your Salesforce Sales Funnel

Ideally, your Salesforce sales funnel should work toward converting every individual who becomes aware of your business or website into a deal or sale. 

The first part of that sales funnel comprises Leads who enter your funnel at the awareness stage (i.e., when they become aware of your business). From here, you’ll need to qualify a Lead to determine whether or not that individual is valuable for marketing or sales. 

Once Leads are qualified by your own internal criteria and Lead status scores within Salesforce, a Lead can be converted into Contacts and Accounts inside Salesforce. 

To be clear, Contacts represent individuals, while Accounts represent businesses or organizations. 

The Contact and Account record stores information about the individual or the company they work for to be used by marketing, sales, and account management throughout the life of the relationship.

In addition, when a Lead is converted into a Contact and Account, you have the option to create an Opportunity as well. Opportunities represent sales activities for a particular product or service. 

As a basic overview, Leads are used to store information about people with top-of-funnel interests. When they’ve expressed interest in working with your company, they’re set as a marketing-qualified lead (MQL) or sales-qualified lead (SQL) and ready to be converted to a Contact and Account.

What’s the Difference Between Salesforce Leads and Contacts?

With this in mind, we can better understand what constitutes the difference between a Lead and a Contact and its importance. 

Essentially, Salesforce Leads represent any individual or company entering your CRM but not ready for the sales discussion.

On the other hand, a Contact is an individual who has been qualified and converted from a Lead to a Contact in Salesforce to pursue a sales opportunity.

Contacts can be associated with one or multiple Accounts in Salesforce. In addition, Contacts and Accounts can both be associated with Opportunities. 

Leads, conversely, cannot be associated with Accounts or Opportunities. So, to pursue the sales process, a Lead must be converted to a Contact.

When viewed inside Salesforce, you can view a Contact’s marketable information, including their birthday, address, lead source, and any other data you may collect.

Essentially, the difference between a Lead and Contact is in how each category is attached to an individual inside Salesforce. 

More broadly speaking, it’s important to treat Leads and Contacts differently. While most Leads should be marketed to at varying levels, only qualified Leads should be nurtured throughout your sales funnel.  

Using lead scoring and qualification, your marketing team can segment leads for marketing nurture using tools like HubSpot or Salesforce. This prevents you from marketing to unqualified leads.

The drawbacks of marketing toward unqualified leads are:

• Wasted marketing spend
• Wasted labor and resources
• Less focus on leads that are actually qualified
• Damaged marketing performance metrics from recipients not likely to be engaged in your messaging

Fundamentally, how you treat each different part of your funnel is important for engineering a smooth and efficient sales process for your business. 

Key Differences

• Leads are individuals inside your CRM who may or may not be qualified
• Not all Leads should be marketed toward aggressively
• Information about Leads and Contacts are typically acquired when qualifying the Lead
• Contacts are converted Leads associated with an Account and Opportunity stage
• You can click on Contacts to view their profile information for marketing and sales purposes

The Importance of Lead Acquisition

The first two steps of any sales funnel inside Salesforce–or otherwise–are acquiring and qualifying Leads. 

Acquiring Leads is a marketing process that may involve several different strategies, including:

• Advertising
• Organic marketing or SEO
• Cold calling
• Cold email outreach
• Social media engagement

Understanding Lead acquisition is important because you can attribute deals and qualified Leads to specific channels that bring in the most revenue. For example, if most qualified Leads arrive from YouTube, you can adjust your budget to market more toward YouTube and increase your revenue. 

Understanding Lead Qualifications

Qualifying Leads allows you to convert Lead prospects into Contacts and Accounts to market toward. 

However, converting a Lead into a Contact doesn’t really give us a lot of information about that individual. For example, let’s say that one Lead has signed up for a free demo of your software while another has only signed up for a newsletter; how would you separate the two?

Salesforce gets more granular, qualifying Leads into two default categories:

• Marketing Qualified Lead (MQL): Leads further in your funnel who are more engaged with your business and need a little more marketing to progress further. 
• Sales Qualified Lead (SQL): Leads who are deep into your sales funnel and can be sold immediately through sales engagement. 

While we call these Lead stages, these individuals are considered Contacts inside your funnel and are no longer unqualified Leads. 

Again, Lead stages give us a brief overview of where a Lead is inside your funnel but not their status. For example, some MQLs may be individuals who have been contacted and others who have simply signed up for a newsletter and received no other emails. 

Checking the Lead status of a Contact is also very important for determining how you will follow up with a Lead inside your sales funnel. By default, Salesforce divides Lead status into four categories:

• Open: The Lead is inside your CRM but has been unContacted. 
• Contacted: The Lead was Contacted but did not respond. 
• Unqualified: The Lead was Contacted and responded with interest. 
• Qualified:: The Lead was Contacted but responded with no interest. 

Salesforce provides a Convert Lead page to help you link individual Leads to new Contacts or Accounts. 

Lead Qualification Strategies

Finally, to properly act on Leads that we convert into Contacts, we need to fine-tune our Lead qualification framework. Below, we list a few essential strategies and tips to help you properly qualify Leads into Contacts and different Lead stages. 

1. Act on Leads quickly

   There is a very small window to act on Leads as they enter your funnel. Set up automations to engage and qualify Leads instantly for quick action. For example, setting up drip campaigns for any Lead that is set to an MQL in your sales funnel will allow you to engage quickly and consistently with leads as they advance through your funnel–all without lifting a finger.  

2. Score Leads for priority

   Scale Lead scores to qualify Leads into MQLs, or SQLs to determine appropriate action. Both Marketing Cloud and Sales Cloud come with default lead scoring templates, but you can create a custom one based on your preference. In addition, Salesforce’s Marketing Personalization Builder and Einstein come with Predictive Intelligence that can build a dynamic subscriber profile inside your funnel, complete with actionable recommendations to act quickly on leads. 

3. Qualify Leads based on budget

   Qualifying Leads based on their budget allows you to set priorities for Leads with better revenue Opportunities. In essence, this allows you to prioritize Leads based on their potential revenue, as opposed to their interest, so you can work on capturing those Leads which are more important to your bottom line. 

4. Balance Lead needs with your business benefits 

   On the other hand, you will often find that some Leads may not be the best fit for your company based on what you can offer and the services they’re looking for. Be sure to establish proper criteria that score or grades leads based on their needs, such as whether they’re looking for an enterprise or SaaS solution. 

5. Know who to qualify Leads to

   Finally, determine a system to assign new Contacts to sales reps in your CRM. This could be based on territory, experience, or even take a round-robin approach. Ultimately, you want to send Leads to sales reps you feel are best suited to make a sale, especially when Leads are graded very highly.