Terms used in Microsoft Dynamics 365 for Sales

The Microsoft Dynamics 365 for Sales application is designed to provide a robust system for the management of sales activities in your organization, although many deployments start with the sales application and customize it for whatever line of business they are servicing. This blog introduces the components of the sales application.

Understanding Leads, Opportunities, and Customers

It’s important to understand Microsoft’s interpretation of the core entities that make up the sales application.

  • Leads. The Lead entity in Microsoft Dynamics is designed to store information about potential but not-quite-qualified customers. Since customer information is stored using Contacts and Accounts, the concept is to store new information about people and organizations and your efforts to win business from those people and organizations. And if the efforts are successful, the lead is “Qualified”, and thus converted to a Contact and an Account, if applicable. The most common use-case for the Lead entity is to store large amounts of low-quality data – such as purchased lead list, or a downloaded large list of contact information for potential customers, a list of your followers from LinkedIn, or perhaps a stack of business cards you collected at a trade show or by some other means.  You will see information on a lead form related to three major parts of the sales process, which become signification in the conversion process:
    • The person you are communicating with
    • The organization you are communicating with
    • The topic of conversation
  • Opportunities. In Microsoft Dynamics 365, the Opportunity entity is designed to store information about qualified Leads[1]. In fact, the act of Qualifying a Lead record immediately creates an Opportunity. We are often asked the difference between the Lead and the Opportunity entities.  There are a number of important differences:
    • An Opportunity requires a Customer (either a Contact or an Account.) A Lead can stand alone.
    • The Opportunity contains information about Revenue and Time (estimated and actual revenue, and estimated and actual close date)
    • The Opportunity supports line items from the Product Catalog, and the value of the Opportunity can be automatically calculated from the values added from the catalog.
    • The Opportunity can be quickly converted to an Quote.
  • Customers. It’s slightly misleading, because there is actually no such entity as “Customer” in Microsoft Dynamics 365. In fact, the concept of “Customer” is a conditional descriptor of EITHER a Contact (a person) or an Account (an organization). This is represented in the Microsoft Dynamics 365 interface in a number of ways:
    • The “Customer” area in the Sales module navigation, where Contact and Account are listed as tiles to choose from.
    • The special field named “Customer” and “Potential Customer” on certain entity forms, such as Opportunity, Quote, Order and Invoice, which can be EITHER a Contact or an Account.
    • When an Opportunity is created from a Contact, the Contact is the Customer. When an Opportunity is created from an Account, the Account is the Customer.

[1] Some organizations that deploy Microsoft Dynamics 365 choose not to use the Lead entity, since the bulk of their sales are repeat sales from existing customers. In this case, the Opportunity is simply created under the existing Customer, instead of converting a Lead.