Wednesday, April 10, 2013

SugarCRM 101: Leads, Contacts, Accounts and Opportunities.

Have you ever wondered about the reasons why some modules exist within SugarCRM? The reason is not always obvious, especially to someone new to the sales/marketing world, and often prompts questions.

Perhaps no other area generates more questions than the Leads, Contacts, Accounts and Opportunities modules. To some, the data contained in some of those modules seems redundant, especially the first two as they both contain data about individuals. In other cases, their usage seems like overkill. Yet others are confused as to their need, due to semantics, for example, to some a Lead and a Contact are synonymous with each other. 

Lets try to unravel some of this confusion and answer some of these questions.

If we quickly analyze sales procedures at a variety of businesses, we discover some commonalities across many industries, regardless of the size of the business. Here is a summary:
  1. Someone, typically in marketing, is in charge of attracting potential buyers of your services/products. 
  2. A potential buyer responds and is screened/qualified, to determine their specific interest and purchasing power. 
  3. Lastly, a deal is worked and if won, the potential buyer becomes a paying customer.
That is a very simplistic look at a sales cycle, but it serves our purposes rather well. 

Modern CRM systems, such as SugarCRM, are designed with the above principles in mind. As a result, they include functionality aimed at helping users more clearly differentiate the type of customer information they are looking at to fit in within those various points listed above. More specifically, an application like SugarCRM clearly draws a line between a potential customer and a paying customer, as well as what deals are in the works. 

That, in short, is the reason why the various modules exist, but lets talk some more about their usage.

Data in the Leads module would coincide with point number one in the list above. The individuals in said module represent potential customers. They are kept separate from paying customers for a couple of reasons, including:

  • Easier identification
  • Data integrity
  • Measuring effectiveness

Physically separating these records from the list of paying customers makes it very easy for anyone to quickly identify the records in the database that represent potential versus paying customers. The separation also helps keep your database clean, as your paying customers list would not include records the likes of Donald Duck or other random garbage data someone might provide -- remember, some of your leads may be coming by way of a web site. 

It is usually best to think of the Leads module as a holding bin where potential customers are screened and their interest in your products/services is measured. Lastly, SugarCRM provides a mechanism for promoting a Lead into a paying customer, commonly referred to as Lead Conversion

Converting a lead physically copies the data of the selected Lead entry to the Accounts and Contacts modules. The idea behind this process is to clearly denote the fact that the potential customer has been screened and an opportunity for revenue has been identified. They are progressing in the sales cycle from being a potential customer and inching closer to becoming a paying customer. Along the way, one also has the option to add an Opportunity, which represents the deal, with a monetary value, that would make them a paying customer. This, in turn, facilitates management of the sales pipeline at your organization. 

The conversion process also opens the door to another metric: conversion rates. Not all the records in the Leads module will be converted to Accounts/Contacts entries. Some of the individuals will drop out of the sales cycle either due to lack of interest, lack of funds, not a proper fit or various other reasons. However, it is valuable to know the percentage of Leads that do/do not get converted to paying customers. Measuring this number helps evaluate the effectiveness of not only your marketing efforts, but also those tasked with screening your potential customers.

Of course, not all businesses have these needs, which often leads folks to think this is all overkill. Different businesses use different strategies for their sales methodologies. In some cases, using Accounts, Contacts and Opportunities is more than enough. 

There is nothing inherently wrong with ignoring some modules in SugarCRM. In fact, the product provides customization tools that allow you to hide certain modules and features for this very reason. Remember, the software should adapt to your processes. The above is merely a description explaining the reason why some things are there in the first place. In some cases, this explanation actually prompts changes in a business, so as to adopt their usage, but the main goal is more so to make them available should you need them.

Hopefully that helps shed some light on the topic of Leads, Accounts, Contacts and Opportunities. In a future post, I will discuss the Accounts and Contacts module in greater depth and within this same context.


  1. Thanks Angel for the explanations.

    What do you think about creating Opportunities for Leads?

    I would like to keep my data as clean as possible, as you said.
    And not all my Accounts\Contacts will become paying customers

    1. The issue with that approach is that when one looks at a given Lead, the linked Opportunities are not readily visible (without some customization of the system).

      You might be served better by simply converting them from a Lead to a Contact, with a related opportunity. The opportunity is where you will make the determination as to whether or not they have paid you for something. There isn't anything inherently wrong with having those contacts mixed in with those that do, remember that these modules/features exist to facilitate process as opposed to forcing you to work a certain way. Also, assuming some of those contacts indeed aren't paying customers, they should all be qualified. Meaning, nobody in the contacts module should be someone that hasn't already been talked to about their interest in your products/services.

  2. Hi angel ..Please give me the code for updating a field in contacts module when i click save in the feedback module which is user defined?

    1. I think the easiest way of doing it would be through a before_save hook on the Feedback module. The hook code can then include something like this:

      $contact = new Contact();
      $contact->my_custom_field_c = $my_value_for_contact_custom_field;

  3. Thanks Angel good article.

    What do I do if I want to run a cross sell campaign to existing Accounts via a call centre. I could create new Leads to track the campaign but then the call activity won't be linked to the Account or I could just create a new Call record against the Account but then I can't track campaign activity. Any ideas?

    1. That's a bit tricky. Maybe you could create the new lead linked to the account, along the lines of your initial thoughts and then link the call to the lead. While you won't be able to do the roll up in the application, you should be able to create reports that pull that data and show you all the detail.

    2. why not just create an opportunity for each responding account with Lead source of the campaign?

  4. How can I create an account along with opportunity? i.e. I need a single page to create account and opportunity.

    1. You would need to create a custom view that allows a user to provide the data for both and then upon save, you could use a logic hook or a custom controller to create both records.

      It will require code, but it is not difficult.

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