Understanding CRM Terminology

It is very important that you understand the basic terminology that makes up your CRM system. Being able to distinguish the different types and the interactions between them will enable you to not only track the correct information, but insure your processes efficiency.

Below are the most common terms used in all CRM systems:

• Leads – unqualified contacts/accounts you receive from different sources. There has to be a set assortment of qualifications that determines whether the lead is hot, warm or cold and a process to the next step after the lead type is determined. Lead source should be a required field to track the effectiveness of your lead generation efforts.
• Accounts – an organization that you want to track a business relationship with, this can be a customer, prospect, partners, competitors or re-sellers. It is important that you have a field to designate what type of relationship you are tracking and for segmenting out your accounts for different initiatives. You should also be able to break your customer accounts into an A, B or C categories for example to record your best to worst customers and the approach to each.
• Contacts – any individual in your database with the majority of them associated to specific accounts. Contacts have different roles based on what type of account you are tracking. For instance with a prospect you will want to the track contacts such as decision maker or influencer. In most CRM systems leads are initially contacts and then converted to contacts under accounts.
• Opportunities – the goal is to convert your most qualified leads to opportunities where you are tracking the dollar value of the deal, close date as well as the your sales stage. Your sale stages are at what point you are in the buying process and the associated percent of closing you have determined for that stage.
• Forecast – the sales stages tracked in the opportunities are also linked to forecast categories such as pipeline, best case, commit and closed won/lost. This gives you an accurate projection of your sales on a quarterly basis and will assist you in what is needed in the pipeline.

Make sure that you are familiar with these basic CRM terms and you take the time to update your database with the correct designation. Remember successful processes and results start with accurate data.