We currently have our Marketo/SFDC set up that any new prospects come in as leads until they're qualified and converted to a contact. I don't know the full background of why things were set up this way - wondering if there's any reason why we couldn't have it set up so that everyone comes in as a contact instead of a lead and is added to an account? Thoughts?
Your current setup is pretty standard. You can definitely switch to using Contacts. There are several threads on this that you should take a look at before attempting to implement this.
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