Dynamics 365 — When to Use a Lead Record vs. Opportunity Record

I was doing a project review with a client the other day and was asked this question – “What is the difference between the Lead and Opportunity record types?”. This isn’t the first time I’ve heard that question from clients so I wanted to take a minute to do my best to explain these two very important sales records in Microsoft Dynamics 365 and describe some of the business reasons you would use a Lead and/or an Opportunity record.

A typical sales process would most likely start with the Lead record but to attempt to explain these two entities as clearly as possible, I’m going to explain the Opportunity record first.

The Opportunity record would be used in a Sales Process at the point in your Sales Process where that Company and/or Contact should become part of your “Sales Pipeline”.  This just simply means you want to track Estimated Revenue, Estimated Closing dates, and other key Sales Pipeline details for that Potential Sale.  The Opportunity record feeds the Sales Pipeline charts and will reflect Estimated Revenue by the various Sales Stages defined within your Opportunity.

Here are some screenshots of the fields, forms, and charts that make up this Sales Pipeline.

when to use lead record vs opportunity record in microsoft dynamics crm 1

when to use lead record vs opportunity record in microsoft dynamics crm 2

Because this Opportunity is flagged in the “Develop” stage of the Sales Process, the Estimated Revenue for that Opportunity is reflected in the Develop section of the above chart.

Additionally, the Estimated Close Date tracks when this Opportunity is expected to close providing your organization with visibility into sales projections. The chart below is calculating Open Opportunity Estimated Revenue by the month of the Estimated Close Date.

when to use lead record vs opportunity record in microsoft dynamics crm 3

An organization would move this Opportunity through their sales processes and hopefully eventually end up closing that Opportunity as Won within Dynamics 365.  This would then track that Estimated Revenue as “Actual Revenue” in Dynamics 365.  Here’s a chart that displays Actual Revenue of Won Opportunities within a given month.

when to use lead record vs opportunity record in microsoft dynamics crm 4

Now to explain where the Lead record would come into the picture. The Lead record in Microsoft Dynamics 365 should be used to track ANYTHING prior to the Opportunity.  What that means is, any potential business that has not met the qualification guidelines set by your organization in order to be part of the Sales Pipeline, should be recorded in Dynamics 365 as a Lead.

Here are some examples of when the Lead record should/could be used:

  • A Lead could be a business card you got from someone at a Tradeshow that you entered in order to reach out to them at a later time.
  • A Lead could be from a list you bought that supplies contact information for companies or individuals you are selling to.
  • A Lead could be entered into CRM to record someone that has reached out to you and is interested in buying your products, services, etc. but hasn’t obtained any budget from their organization yet.
  • A Lead could be a potential up-sale for existing business that you want to record and continue marketing to.
  • A Lead could be someone who filled out one of your company website forms.

Here’s a sample Lead record.  Although it’s part of the Sales Process we also see on the Opportunity record, this record would not be included in the Sales Pipeline related charts I referenced above at the Opportunity level, as the Lead by default does not have any Estimated Revenue or Estimated Close Date to track.

when to use lead record vs opportunity record in microsoft dynamics crm 5

Once this Lead meets the qualifying factor to become an Opportunity, you would “Qualify” this Lead which would automatically create the associated Opportunity, Account, and Contact records.  It’s up to your organization to determine what that qualifying factor/factors are for your organization but below are some examples of a qualifying factor.

  • When the person defines budget for the services, products, etc. you are selling.
  • When they’ve asked for general pricing.
  • When they’ve agreed to an onsite meeting.
  • When they’ve expressed any interest in a particular product.
  • Once they’ve filled out your company questionnaire.

Hopefully this information will help you determine when it’s best to use a Lead in Dynamics CRM and when you should be qualifying that Lead to an Opportunity record.

By Jessica Stansberry, Senior Applications Consultant with Dyn365Pros, a Microsoft Partner focusing exclusively on service, support and education for Microsoft Dynamics 365 and the Power Platform. Based in Atlanta, Georgia. Click here to contact Dyn365Pros.