Many CRM software systems use the terms lead and opportunity to describe different types of sales records, but sometimes these expressions can cause confusion for new users. Leads represent prospective customers that your sales representatives need to qualify or disqualify. Depending on your organization’s sales and marketing processes, leads can come from many different sources—website requests, purchased lists, trade shows, or incoming phone calls, for example. Many organizations try to qualify or disqualify lead records as quickly as possible to determine whether they represent potential customers. Because lead records are not intended to be used for the long term, leads use a flat data structure in which the data about an individual and his or her company resides in a single record.

Each organization defines its own lead qualification criteria, but typical qualifying questions asked by businesses include:

If you determine that the lead meets your sales criteria, you convert the lead to one or more different types of records in Microsoft Dynamics CRM.

As you learned in Chapter 3, accounts represent businesses, and contacts represent people. By using accounts and contacts instead of leads to track prospects and customers, you can model additional relationships within Microsoft Dynamics CRM to capture the various people in each account.

Opportunities represent potential revenue-generating events for your organization. Most organizations track data about a potential sales opportunity, such as estimated close date, estimated revenue, sales representative, and sales stage. You link each opportunity to an account or a contact, depending on how you want to track the potential customer. Because a single customer might purchase multiple products or services from your organization, a single customer record can be linked to multiple opportunities. Each potential sale can have its own data about the sales opportunity, and you can even have different sales representatives pursuing different opportunities for the same contact or account record. Likewise, as you work with repeat customers over an extended period of time, you continue to create multiple opportunities to represent new sales opportunities while preserving the historical opportunity data.

Leads come from many different sources, depending on your sales and marketing processes. Your corporate website might generate leads automatically, or marketing personnel might import leads into Microsoft Dynamics CRM with a batch process. However, you can also manually create lead records. When working with a lead, you can use Microsoft Dynamics CRM activities such as tasks, phone calls, and email messages to track your inter-actions with the lead during the qualification process. The type of data that you capture about each lead depends on your business needs and any customizations your system includes, but most organizations track the person’s name and address information.

Many organizations also want to capture the marketing source from which the lead originated. If your organization captures the lead source for each record, sales and marketing managers can run reports to determine which lead-generation tactics are most effective. For example, you might find that a lead source such as the trade show circuit generates a large number of leads, but only a small percentage of them qualify as potential customers. Meanwhile, another marketing tactic such as a website might generate a smaller number of leads, but a high percentage of them qualify as potential customers. Understanding the source of your leads will help your company make better decisions on where to invest in future sales and marketing efforts.

In this exercise, you will create a lead to track a new prospect who found out about your organization from a website.

Leads represent potential customers that can be qualified or disqualified based on criteria set by your organization. After you work with a lead record and determine whether or not the potential customer fits your lead qualification criteria, you convert the lead. When you convert the lead, you specify whether or not the lead is qualified or disqualified.

When you qualify the lead, you create one or more of the following record types: Account, Contact, or Opportunity.

Your business process should dictate which of the records to create. For example, if your organization sells to businesses, you will probably want to create both an account and a contact. If your organization sells to individual consumers, you might not want to create an account. Likewise, you might not always create an opportunity when you qualify a lead. You might determine that a lead fits your qualification criteria but that an immediate sales opportunity does not exist.

In addition to creating a new opportunity, account, and contact all linked together, you can also convert a lead to a new opportunity that will be linked to an existing customer record in Microsoft Dynamics CRM. You might want to do this if a matching account or contact already exists in your Microsoft Dynamics CRM database.

When you qualify a lead, you can select a check box to open the newly created records, which will open the new account, contact, or opportunity records created during the lead conversion process so that you can work with them right away, saving yourself a few clicks.

In this exercise, you will convert a lead as qualified and create a new account, contact, and opportunity.

Not every lead will meet your qualification criteria, so you will need to disqualify leads from time to time. Disqualifying a lead does not delete the record from your system. Instead, it deactivates the lead to indicate that no one needs to follow up with it. Likewise, converting a lead as qualified does not delete the record; it deactivates the lead record and creates an Account, Contact, or Opportunity record for further follow-up.

When you disqualify a lead, you can select a reason to indicate why you decided to disqualify the record. Again, your administrator can customize the disqualification reasons, but the default values include Lost, Cannot Contact, No Longer Interested, and Canceled.

Just as recording a lead source provides valuable sales and marketing data, recording a disqualification reason also provides data that you can analyze to optimize your sales and marketing processes. Cross-referencing the lead source data with the disqualification data can provide valuable insights. For example, you could discover that your sales team disqualified 50 percent of the leads from a purchased list because of invalid contact information. Sales and marketing managers can use this information to make educated purchases of future lists, or perhaps stop purchasing lists altogether. To obtain this kind of insight, each sales representative must accurately record the disqualification reasons.

In this exercise, you will create a lead and disqualify it.

Opportunities represent potential sales, and many organizations carefully monitor their opportunity data to help them:

When you work with an opportunity, you can track all of the activities related to the potential sale, such as tasks, phone calls, and email messages.

By default, you can track the potential customer’s name, estimated close date, estimated revenue, probability, and rating for each sales opportunity. Many organizations customize the opportunity form to track additional data about the potential sale, depending on the products and services they provide.

You can choose between two revenue settings for each opportunity: System Calculated and User Provided. If you select System Calculated, Microsoft Dynamics CRM will automatically calculate the estimated value of the opportunity by using a combination of the products attached to the opportunity and the selected price list. If you select User Provided, you can enter the dollar amount of the opportunity value directly into the Est. Revenue field. Setting up products and price lists in Microsoft Dynamics CRM requires system administrator privileges, so the exercises in this chapter will utilize the User Provided option for revenue.

For the Est. Close Date field, enter the date when you expect to close the opportunity, either as a win or as a loss. The Probability field allows you to enter a percentage to indicate your confidence that you will win the opportunity. You can enter a whole number from 0 to 100 in the Probability field. For example, entering 50 in this field means that you’re 50 percent confident that you will win the opportunity. Rating is another measure of the opportunity. The default values are Hot, Warm, and Cold. Some organizations use the Rating field to indicate their perception of the customer’s interest, and other organizations use Rating to record how interested they themselves are in pursuing the opportunity.

Earlier in this chapter, you learned how to create an opportunity record by converting a lead. You will also want to create opportunities for existing accounts and contacts, so you also need to know how to create opportunities outside of the lead qualification process.

In this exercise, you will create an opportunity for the Sonoma Partners account record created in a previous chapter.

One of the main reasons that organizations track opportunities in Microsoft Dynamics CRM is to allow managers and executives to forecast upcoming and future business. As you saw in the previous section, you can record the potential customer’s name, the products or services they’re interested in purchasing, the estimated close date, estimated revenue, and probability for each opportunity. By using these data points, sales managers can review the open opportunities to ensure that orders can be fulfilled and understand which sales representatives are generating new sales pipelines.

Microsoft Dynamics CRM includes several system views for opportunities, including:

You can use the Advanced Find tool to modify these views, or you can create new views to analyze your opportunity information. Refer to Chapter 16, for more information about creating new views.

In addition to opportunity views, Microsoft Dynamics CRM provides additional reports, charts, and dashboards that you can use to analyze your sales information, such as the following:

If none of these reports or analysis tools meet your needs, you can create new reports, charts, and dashboards yourself. Refer to Chapter 13, for more information on charting capabilities; and refer to Chapter 14, for information on how you can set up and create your own dashboards. Refer to Chapter 15, for information about creating reports by using this feature.

Lastly, you can perform ad hoc opportunity reporting and forecasting by exporting your opportunity data into Microsoft Excel. Chapter 17, explains how to create reports and perform analyses by using static and dynamic Excel worksheets.

In this exercise, you will open the Sales Activity dashboard and then view the Sales Pipeline chart.

After you work with a prospect or customer to determine whether he or she wants to purchase from your organization, you close the opportunity record to indicate what the customer decided. Closing an opportunity does not delete the record; Microsoft Dynamics CRM just deactivates the record and updates its status so that it no longer appears in the active opportunities list. A won opportunity is one in which the customer decided to purchase from you, and a lost opportunity is one in which there was no purchase.

A lost opportunity does not necessarily mean that the customer purchased from someone else. You might close the opportunity as lost if the customer canceled the purchase decision or put it on indefinite hold. As with lead disqualification, your administrator can customize the reasons for marking an opportunity as lost so that you can report this type of data. Furthermore, if you lost the opportunity to a competitor, you can record which competitor you lost to for reporting and analysis.

In this exercise, you will close an opportunity as won.

The previous section mentioned that you could close an opportunity as lost if the customer delays the purchase decision. If you later find out that the customer would like to reopen discussions about the potential sale, you do not need to create a new opportunity record. Instead, you can reopen the closed opportunity and use that record to continue tracking the sale. When you reopen a closed opportunity, you can access all of the previously created activity history and notes attached to the opportunity.

In this exercise, you will reopen a closed opportunity.

Earlier in this chapter, you learned how to manually create a new lead. Another technique that you can use to create a new lead is to convert an email activity into a lead. You might want to do this if you receive an email message from a prospect that isn’t currently recorded in your Microsoft Dynamics CRM database.

In this exercise, you will create an email activity and convert it into a lead.