Quick Tip: Associating Contacts, Companies, and Deals - A Case Study in Lemonade

[#1]

Hi there,

My name is Jenny Sowyrda and I am a Community Manager for the HubSpot Community. 

One way to think of contacts, companies and deals in terms of the simplest business model there is: the lemonade stand.

1. Contacts

In general, contacts are the human connections you are making for all elements of your business. A deal is pitched to a human, a company is run by a human, your emails are read and answered by humans.

In my lemonade stand business, the contacts are the potential customers I have. Drivers passing by, children out riding bikes, parents out jogging-they are all the contacts in my CRM because they are my potential customers. They are my contacts.

2. Companies

Companies are more than where your contact works. A company defines your contact’s budget, resources, and ultimately whether your contact will be able to buy your product.

For my lemonade stand, the neighborhoods that I market my lemonade to are the companies. If I set up a lemonade stand in a neighborhood that no one drives or walks through, or a neighborhood that has six other lemonade stands, I am not going to sell my lemonade. These neighborhoods would not be the right companies for me to market to. And just like companies can have multiple contacts, neighborhoods can have multiple individuals eagerly lining up for my lemonade.

 

An important note—just like an individual cannot live in two neighborhoods at the same time, a contact in HubSpot cannot be associated with multiple companies at the same time.

3. Deals

Generally speaking, deals are the business transactions that are associated with a contact or a company.

 

For my lemonade stand, a deal is when I begin to pitch my lemonade to a customer. While not everyone who stops by my stand will purchase lemonade, my deals are each transaction. And just like one customer can purchase two cups of lemonade, a contact can be associated with two deals.

 While contacts, companies and deals can all act independently in a CRM, using them together makes every deal as sweet as selling lemonade.

[#2]

Contacts, companies, deals and lemonade ...who would have thought?

CC'ing some of our top HubSpot Partners and Academy Professors who I know spend a lot of their time consulting/training others on using HubSpot CRM and inbound sales methodology. I'd love your thoughts on the above / insight on any anolgies you have had success with yourselves?

@Phil_Vallender @Samantha_Alford @Josh @KyleJepson @SeanHenri @coachcourt @Babel_Gem @FesAskari_SIC @AngelaHicks @HubTrog 

Thanks for sharing Jenny!

[#3]

I love the lemonade stand analogy!  I might change it ever so slightly though.

• Contacts are your potential lemonade stand customers.
• Companies are the homes those contacts live in. 
• The company's industry is the neighborhood your lemonade stand's customers live in.  This is your target market.
• Deals are when they haggle two cups of lemonade for a dollar instead of one for 75 cents.

This applies well for those using the CRM in a non B2B scenario, like a school who's using it to manage applicants and their families.  For the school's we work with, we tell them to think of a company as a family unit or household, and the Deal as the application.

[#4]

Thanks for the follow up @SeanHenri - great to hear you've experience working with schools/education partners who use the CRM. I've seen a lot of questions from marketing and sales managers who work in schools - @Fridrik @PaulDyer @OwenLatham @msodotnet you might find both Jenny and Sean's analogies here useful

[#5]

Thanks for sharing this helpful and simple analogy @jennysowyrda! I had the same thought as @SeanHenri about a household being analogous to a Company in a CRM. Your post made me question, and this is something I've questioned before, when do you set a contact to Closed/Lost? Are they really lost? If a contact doesn't buy lemonade today, does that mean they'll never buy lemonade from me? If that "closed/lost" contact shows up next week, should I try a different sales tactic with them or even offer a discount? I've always wondered how we can do more for the "closed/lost" or if it's even a good use of effort.

Thanks for starting this discussion!

[#6 · Accepted solution]

Hi @AngelaHicks, 

Are referring to moving a deal to closed/lost? I often struggle as well with when a deal is truly lost, as there is always (hopefully) the potential to bring that deal back. I think the lemonade stand analogy makes it a bit easier to see this because if a child is in the middle of purchasing his or her lemonade when their parent picks them up for soccer practice, that may be an analogy of a deal being lost. I hope that child comes back to purchase lemonade, but that deal may not be for an hour, a day, or even a week. As I don't know when, or if, that potential revenue will come back, I would consider that first loss of a sale a lost deal that is marked as "closed lost". Would you agree? 

[#7]

That's a clear scenario of when to mark the deal as closed/lost. Thanks @jennysowyrda!

[#8]

Great question! I think there's three common scenarios to consider there:

1. Not Ready - A contact expresses interest but the timing isn't right just yet for one reason or another. In these situations I like to use the Lead Status field to indicate that they aren't ready yet, but should be nurtured with the hope that they might be a bit further down the road. We'll often create a custom status like "Nurture" to accomidate this.  If the client is also using HubSpot Marketing, we can use this status change to enroll them in a "backburner" or "top of mind" workflow that is designed to keep you top of mind and bring them back into the conversation when the timing is right. If your business, school or organization works on an annual cycle, you might also create a task to follow up with the contact with a call 9-10 months down the road knowing that time of year is approaching.
2. Lost or Stalled Deal - Once a deal is lost or I know it will be stalled for several months to a year, I'll mark it as closed-lost immediately.  Yes, they may likely come back, but I don't want that open deal taking away my focus from those deals that are still likely to close in the near future. To prevent them from slipping through the cracks we might create a task reminding us to follow up in 3 months, 6 months, or whatever is appropriate. We could also enroll them in the above-mentioned workflow, or create one that's specifically designed to deals lost to competitors.
3. Not Qualified -  Some people are never going to be a fit for one reason or another. By using the Lead Status field in the CRM to indicate this, you can flag them from removal from your database, or if you prefer to keep them, at least exclude them from certain emails or prospecting activity so you can keep your efforts focused on those contacts who are a true fit for your organization's offering.  

To your other question about treating them differently depending on situation, I'd say yes, absolutely. You'd probably want to treat someone associated with a deal that got stalled because of funding or other internal challenges differently than someone who you say lost to a competitor. Having that context available can be super useful to both sales and marketing.

If marking a Deal Closed-Lost, utilize the Closed-Lost Reason field to provide that context. You should also log some notes to add some additional detail that can be referenced when that deal heats back up again.

[#9]

Thanks @SeanHenri! I like your ideas about using the Lead Status field. And yes! Hopefully the team will use the Notes field to provide enough details so any rep can pick up a "Not Ready" or "Stalled" prospect!

[#10 · Accepted solution]

Hi all, not sure I can see what the question is here, but I would suggest creating some bespoke deal stages that align with your sales process. Some examples may be - 'No Decision', 'Repeat/Renewal Deal' or 'GPCT Stage' - this last one is having a conversation with you customer to understand what the real opportunity here (or isn't!); e.g. are they buying lemonade just for themselves, their team or their whole company! 

[#11]

Thanks for that, it's made it very clear

Here is my situation.

I have contact that either work for, or own the company

So far, so good

Once we are working together, they will often use others in the company to do some of the legwork of emailing information or discussing certain things

What's the best way to deal with these?

Is there any way of associating them with the contact as they are the people I deal with not the company

I know what I mean, but not sure if you will

They are not really contacts, they work there. My dealings with them is likely to be via email/phone gathering info for the contact

Sort that one out oh knowledgable ones

Phil

[#12]

Thanks for the example Jenny!

Perhaps it is the way we are going about it but it appears that we are losing the connection between companies and contacts when creating / viewing a deal.

- We enter Contacts and a Company is created

- When viewing the Company, we see the Contacts associated with that company

- From the Company view, we add a Deal to the company

- Now, from the Deal view we would expect to see the Contacts associated with the Company to also be associated with the Deal.  However, they are not.

- To add Contacts to the Deal, click Add A Contact and we have to search for the Contact by name or email (as opposed to seeing a list of Contacts for the company)

Is there a better way to approach this? 

Thanks!

[#13]

And ... there's more ...

- see [Now Live] Deal-based and Ticket-based Workflows

[#14]

Hi @jconti , I know this is an older post, but I am looking into turning the company creation and association feature on. Do you have any negatives in your experience with your process below? This is what I am looking to do. We currently have sales create companies and the re-entering of data is cumbersome. thanks!

[#15]

This analogy really doesn't work, and definitely doesn't solve the problem. If we need to stay inside this metaphor:

Think about one person, who works in Neighborhood A, and lives in Neighborhood B. She *certainly* exists in two places - -she eats, shops, drives, buys in both locations. If I have to track her as "Nancy at Work" and "Nancy at Home," then I don't really have a clue who she is.

In a more real-world example, I have an agency partner who is introducing me to multiple of his clients. I really need to see that my friend Julian is an influencer in a dozen different accounts that are NOT his company, even though I'll never sell his company a single dollar's worth of software. I also want to be able to look at Julian's Contact record, and see all the different Companies (and Deals) where he has influence. Suggesting that he can only be associated with one Company, and only the Deals for that Company, is really naive.

I've never seen any other CRM - not Salesforce, Sugar, Dynamics, Oracle (Siebel), SAP, Zoho - that doesn't support this function. It's a GLARING hole.

[#16]

So you know you can add a contact to multiple deals right?

If you add Julian to a deal for another company this will show in the timeline.

[#17]

Hi Jenny (and all!) - how would you suggest the situation of there's one company, but they have multiple branches. Do you have to create a company for each different location? Or is there a better way to see who's associated with which location?

Thanks for all the help!

[#18]

Hi @ncaldwell,

It depends on the level of information and activity you'll be tracking with each branch. One option would be to utilize the parent/child company association. 

Additionally, are there contacts that need to be associated with each branch? Or are all of the contacts associated with the main division of the company? 

@FesAskari_SIC and @MFrankJohnson do you have any thoughts on this? 

Thanks,
Jenny

[#19]

There would definitely be certain people who would need to be associated with specific branches, not just the "main" company. That's the issue I'm running in to.

Can the parent/child company association fulfill that as well?

[#20]

Thanks for the tag @jennysowyrda ...

Hi @ncaldwell,

If you're going to need to see HubSpot Contacts associated with HubSpot Companies you might consider using the 'dummy domain' workaround discussed in the following thread.

- see [SOLVED] One domain name 5 companies

Help answer your question? If so, remember to accept this solution now.

[#21]

Hello- I know this is an old post, but I'd like your perspective on something I am working on. I came from salesforce, where we'd convert a lead into a contact and company at the right point and that worked. These being separate has me confused on how to manage. My thought is that we create a contact as a (lead) and only create a company if we have a contact. What do you guys recommend? Do clients create a bunch of companies first or contacts first? thanks

[#22]

Welcome @laceyg, 

HubSpot can be set to auto-create companies (based on website URL). Sometimes this is helpful. Sometimes, not so much.
- see Automatically create and associate companies with contacts

The thing is, HubSpot Companies are uber-useful when trying to 'associate' / organize Contacts -- which have no other way of being associated with each other in the HubSpot CRM.

Hope that helps a little.

Over to you @jennysowyrda 

[#23]

Thanks @MFrankJohnson ! I did learn about this feature yesterday. I would love to know how accurate you think the data is. Can you share any negatives I may exprience? I don't want to turn it on and deal with mapping my current industries if it's not going to be good long term. We do have pain points around constantly re-entering data since nothing is connected so it could help us. 

[#24]

Ok, so HubSpot Companies are optionally auto-fed data from something called HubSpot Insights which aggregates company data from multiple sources. We've seen/heard issues around having to re-enter updated company info, but nothing that warrants discontinuing use of auto-creation IMHO. In fact, the auto-create company from URL feature is a HUGE time-saver. Especially since HubSpot Companies are free -- i.e., don't count towards the billable Contacts tier.

Will there be 'extra' Companies ('accounts' as you call them)? Yes.

Is that better than having to create each account manually, THEN having to associate that account with all of its contacts manually? ABSOLUTELY.

No perfect solution, but certainly workable at scale.

[#25]

Hi @laceyg,

If the company is on your radar as a lead (without a specific contact yet), I would say there is no harm in creating the company record and beginning to store updates and information around the company on the record. 

Once you have a contact, you can begin to nurture the specific contact with all of the information you already have from the company.

And finally once you've nurtured the contact, you can create a deal as well!

Hope that helps!  

[#26]

Thanks, I have always been of the opinion that an account is converted to from a lead (contact) so this is not something I see as a good practice. I am still getting used to Hubspots objects with no association, so it's good to hear other opinions. thanks

[#27]

Thanks for the post - very helpful for this longtime Salesforce user.  

Quick question in this scenario - if I wanted to build a Deal Filter of number of deals per "neighborhood", the attributes of the neighborhood reside with the company but I am building the filter on the deal.  

In my case, I want to see how many deals I have that are international.  We have a "Country Code" field on the Company.  However, I have not been able to figure out how to build a query that combines the relationship of "Get all Deals for current quarter whose Company Country Code <> US or United States".  Is it possible to build a query like this in Hubspot?  Thanks in advance...

[#28]

Hi @adearing, 

For the deals within the current quarter, would you be looking for deals with a close date in the current quarter, that were created in the current quarter, or something else? Knowing what criteria we want to filter the deals off of, in addition the country code, will help us build this filter.

Thank you,
Jenny

[#29]

Jenny - thanks for the reply!  I would be looking to create a report with a close date in the  current quarter with the associated company outside the US.  Appreciate the help!