CRM Key Concepts Account, Prospect, Customer, Contact, Lead, Opportunity
People often ask me about the difference between accounts and prospects. Today we will cover some of the key concepts in CRM that I have personally seen many customers and business users struggle with. How an account is different from a customer, what differentiates leads from opportunities, whether we need both leads and opportunities. Does any of this sound familiar? If you’re struggling with these fundamental concepts in CRM, then read on.
Different CRMs define these concepts differently, but I would like to define these concepts from an SAP Sales Cloud perspective, because I think that’s the right lens through which to define all of these CRM concepts.
First of all let’s understand Accounts, Prospects and Customers and how they are related. These are legal entities, companies or organizations who you sell or intend to sell your products or services to. These are the current or potential buyers of your products or services. I use the term legal entities rather than individuals, because I’m describing business to business or B2B scenarios.
Think of Accounts as records in your CRM system that uniquely identify these legal entities through their details such as Account ID, Name of the business or organization, Address, City, State, zip, Phone Numbers, website, industry classification, etc. Account is the umbrella term used for all the current or potential buyer organizations or businesses records in SAP Sales Cloud.
Prospects & Customers
Now let’s turn our attention to Prospects and Customers. These are just classifications of your Accounts. They distinguish between your current or even previous buyers, and your potential buyers. All the Accounts who are your current or previous buyers will be classified as Customers, and the remaining Accounts will be called ‘Prospects,’ which are potential buyers. Accounts have an indicator of either a Customer or Prospect, not both. When you look at any Account in SAP sales cloud it will be either a Customer or a Prospect. That makes perfect sense right? Either you have current or previous buyers in the system or you will have potential buyers. So think of Account as the common term used for both Customers and Prospects, as Account will either be a Customer or a Prospect. Another delineation I can give you if you are running an ERP such as SAP S/4HANA or SAP Business One; all the Customer records should co-exist in both your ERP as well as Sales Cloud, however Prospects will remain only in your Sales Cloud.
Potential Buyers to Actual Buyers
You might be wondering what happens when a potential buyer then makes a purchase and becomes a buyer. It’s easy! Just change the indicator on the Account record from ‘Prospect’ to ‘Customer’. And if you are running SAP ERP in the backend, and have enabled standard integration between your Sales Cloud and SAP ERP, Customer record will replicate to your SAP ERP to make sure your Customer records are in sync across these two systems.
Next let’s talk about the Contacts: the individuals working at these buyer organizations. You define them in your Sales Cloud as Contacts with their details, using a contact ID, first name, last name, title, email, etc. The key is to make sure Contacts are linked to Customers and Prospects.
Hopefully this gives you a better understanding of Accounts, Customers, Prospects and Contacts. In the next article we’ll discuss Leads, Opportunities and how they tie together with Customers, Prospects and Contacts. Please do not hesitate to reach out to #teamasar if you have any questions or need any help. Thanks for reading and tune in next week!