In practical terms you may hear database objects being referred to as "records." For the most part, these terms are interchangeable. Whether we're talking about a "Lead Record" or a "Lead Object," the meaning is the same—it's the data container for a "Lead" that resides within the database.
Leads and Accounts are the highest-level, general-purpose database object that houses information—company name, phone number, address, job title, company size, current status, description, and more.
Leads and Accounts are different, however, in terms of the assumed relationship users have with them. Lead records are assumed to have a relatively unestablished business relationship, if there is a relationship at all. New records added by a lead provider, a list of names bought from a company like Dun & Bradstreet or Hoovers, or a name you entered yourself from a business card you got at a trade show are classic examples "Leads."
Once a more formal business relationship is established (what that is will entirely depend on your process), a Lead is generally converted to an Account. When you convert a Lead to an Account, all of the existing Lead object information transfers with it.
Once a Lead is converted to an Account, the database "unlocks" three additional secondary object types that can now be associated with the account: Contacts, Deals (sometimes called "Opportunities"), and Cases.*
The difference in assumed relationship between Leads and Accounts can have specific effects on your workflow. Many of the automation tools are "Lead-centric" in their approach, since building relationships with new prospects takes time and effort. Once a Lead is converted, many of the "high touch" nurturing and automation features are less important, since the relationship between the rep and the Account is assumed to be more personal and one-to-one.
Not all organizations want or use the Account object at all, instead keeping their data as Lead objects, which is perfectly acceptable. There's really no inherent advantage either way, depending on your workflow needs; the key is just to understand that Leads and Accounts are the primary objects, and every other component of the system revolves around them in some fashion.
Every secondary object should be attached to one of the two primary object types: a Lead or an Account. Logically and administratively, it makes little sense to create a secondary object without attaching it to a primary object.
Contacts, Deals, and Cases "logically" do not exist on their own without being attached to a primary record. You can create them without a parent, but they will be "orphans" in your database. You will be able to search and view them, but their purpose will be a mystery without an associated lead or account.
Contact record objects are probably the most confusing to understand, at least at first. When a record exists in the Lead database, all of the information is stored in a single record view—name of the person, their individual phone number and email, name of the company they work for, company-specific info (number of employees, industry, etc.), and so on. Once a Lead gets converted to an Account, however, the database "splits" the information up. All of the company-specific information gets put into the Account record, and the personal contact information, like the name of the person, their email address, title, etc., moves to a Contact record.
Some wonder why we built the system this way. The primary reason is that once the relationship with a Lead becomes developed enough to convert into an Account, in many cases agents are working with multiple people at the same company. They may have dealings with the VP of Sales, the controller, the front-line sales manager, and the IT director.
For business-to-business (B2B) sales organizations, splitting Accounts and Contacts into two discrete objects makes it easier to track those individual points of contact. For business-to-consumer (B2C) organizations on the other hand, the Account/Contact split is largely irrelevant; for all intents and purposes, the Account object contains the exact same information as the Contact object (for this reason, many B2C organizations do not use Account objects at all, as explained previously).
*It is in fact possible to use Deal and Case objects before a Lead is converted into an Account, but companies that do this are a distinct minority. Contact records are only available when a Lead is converted to an Account.
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