You’ve heard of leads and you’ve heard of opportunities. If you’re like some people, you might even be (wrongly) using them interchangeably—okay, maybe we’ve all been guilty of it at some point.
But they’re different. Very different.
Look, I get it. Terminology can get confusing, especially when sales and marketing teams alike are constantly coming up with new, cool-sounding lingo. As the Director of Marketing Operations here at Copper, I have my hand in both sales and marketing—and I work in the tech industry—so you can imagine the amount of fun jargon I come across on a daily basis (and shamelessly partake in).
It is very important to thoroughly understand the terms you’re using though, and two terms I constantly see people using incorrectly are “leads” and “opportunities.” So, I did what any marketer would do: I wrote a blog post about it.
In this post, we'll talk about:
- Why it's important to use “leads” and “opportunities” correctly,
- What a lead is,
- What an opportunity is, and
- How to turn a lead into an opportunity
Brace yourselves. By the end of this post, you’ll never use these terms incorrectly again.
Using “leads” and “opportunities” correctly matters. Here’s why.
Short answer? Because if you don’t know what each term means, you can’t be giving them the treatment they deserve.
You can’t be giving opportunities mere lead treatment or any old lead the extravagant opportunity treatment (this sentence will make more sense later).
Simply put, opportunities were once leads, but they passed certain qualification criteria which relabeled them as opportunities. In other words, they’re leads who are actually likely to buy your stuff.
Think of this way: leads are point A, and opportunities are point B.
If you know how to distinguish between a lead (pretty much anyone who interacts with your brand that you’re able to contact) and an opportunity (someone who has taken a few more steps and is closer to actually being a sale), you’ll have a much better idea of how to get from point A to B.
What’s a lead?
A lead is someone who has shown interest in your brand in some way. They’re not qualified yet, meaning they might be interested in buying your product... or they might not.
And honestly, you don’t want every lead to buy from you—you only want the ones who are truly a good fit for your product (and vice versa).
This is especially true when you’re working in SaaS, where acquisition costs are high and ROI doesn’t happen until months or even a year or more of subscription revenue from that acquired customer.
Ensuring a good product-customer fit is essential for a long-term business relationship and to prevent churn.
That’s where lead qualification comes in. it helps you confirm a lead’s interest and make sure they have the budget and the decision-making power to buy your product or service. Plus, you’ll need to really converse with the customer to ensure you have a good understanding of their use case and the objectives they’re trying to accomplish with your product, to make sure your product can deliver on those expectations. (In other words, making sure it’s a good customer-product fit!)
Qualifying also is important because leads have anywhere between a 0 and 100% chance of conversion… and you don’t want to spend as much time and energy (or any at all, really) on the 0% chances as you do on the 100s.
Qualification helps raise that bar to a good 50-100% chance instead. Better odds, less time wasted (for both you and the leads).
Some examples of leads are:
- A list of contacts you obtain either through research or from a third-party lead generator
- Referrals from existing customers
- Contacts you get through inbound marketing efforts such as a lead capture form on your website
- People who follow your brand on social media
Note: A lead could be either an individual or a business. They might not even have the authority to purchase your product, but they are interested, which means they could eventually help lead you to the decision-maker and to the sale.
Once you’ve qualified your leads, some of them might turn into opportunities. More on that next.
What’s an opportunity?
Simply put, an opportunity is a qualified lead. They’re the leads that made it clear they’re interested in discussing your product and are seriously considering buying it. It’s all hands on (sales) deck now. You have a good chance of closing these people (definitely a higher chance than 0%).
In your CRM, you're usually able to see your opportunities clearly laid out with the value, relationship-owner, and status attached (among other key details):
Copper shows you all your opportunities in one place, including information like their dollar value and status.
So, to summarize: while leads are still pondering whether they’re really into you, opportunities are ones who’ve moved past that stage and have expressed they’re open to pursuing a relationship with your company (a.k.a. they’re ready for you to sell to).
Things starting to make sense? Well, here’s a curveball: the exact time window of when a lead becomes an opportunity can differ from company to company.
Here's an example:
Say you sell creative project management software.
A website visitor fills out the form on your contact page saying they’d like to learn more about your product. Turns out, they're the CEO of a huge tech company.
Exciting? Sure. But not an opportunity—yet. At this stage, they’re still a lead.
The contact gets assigned to a sales rep on your team. They reach out and offer to set up a sales call to walk them through the product. The lead agrees.
Now, remember what I said about different companies labeling leads as opportunities are different stages? Well, depending on your unique qualification criteria, just setting up this meeting could dub that lead as an opportunity.
Or, you might choose to take it a step further. Maybe you have the sales call, and it goes great. You confirm the lead has the need, budget, and authority to buy your product. You could decide that this is the point where your lead becomes an opportunity.
Turning a lead into an opportunity:
For starters, decide at which stage in your sales process you want to consider a lead as an opportunity.
For example, your criteria for converting a lead to an opportunity could be one or more of the following:
- You’ve identified what their business goals are and confirmed your product can help them achieve those goals (they’re a good fit).
- They’re the decision-maker and have the authority to buy your product.
- They have the money/budget to buy your product.
- They’ve explicitly stated that they want to discuss the possibility of purchasing your product with you.
Depending on which criteria you pick, you can determine at which stage of your sales process your leads convert into opportunities. This is helpful because it’s a lot easier to remember that leads turn into opportunities in the “presenting stage,” for example, then to say, “Oh, check if they met X, Y, and Z criteria.”
Here are the stages of a typical sales process:
- Prospecting: identifying potential customers via events, referrals, online research, etc.
- Connecting: reaching out to your leads via phone, email, or online with a short sales pitch
- Qualifying: determining your chances of conversion and deciding whether or not to move forward with a lead
- Presenting: formally pitching your product to a qualified lead, whether in person or online
- Handling objections: addressing any concerns from your leads and engaging with their specific needs
- Closing: converting your lead into a customer
- Getting referrals: using this new customer to generate more leads
Since you can decide when your leads convert into opportunities, this is a highly unique flow for each company. The best CRMs should allow you to visualize this clearly with a customizable pipeline.
Here's how it looks in Copper. As you can see, you can drag and drop your leads as they move through your sales process:
Using the example above, while some companies might start dubbing their leads as opportunities at the “Projects” stage, others might not consider them opportunities until they’re well into the “In Production” stage.
Pro-tip: Learn how to customize your pipeline stages with Copper here.
While some companies might start dubbing their leads as opportunities at the Qualifying stage, others might not consider them opportunities until they’re well into the Presenting stage.
To help you figure out which one applies to your company, ask yourself this: what would our opportunity-to-win ratio be if we relabeled leads as opportunities in X stage?
If you’d win less than 50% of them, you might want to buckle down on your qualification criteria.
Speaking of opportunities, here’s one to learn more.
Now that you know the difference between leads and opportunities, it’s time to put that new knowledge to work. Learn how to get good leads and flip them into even better opportunities with this webinar. 👇
Learn about effective methods of sales prospecting in this webinar with PersistIQ's CEO.