• A CRM funnel mirrors a sales funnel, tracking leads as they move closer to becoming paying customers.
• CRM funnels can help automate the closing of a sale, keeping sales reps informed of customer needs and behavior.
• Automating sales at each stage of the CRM funnel can improve efficiency and drive more sales.
• This article is for small business owners interested in improving their sales with CRM software.

Your business depends on customers and the relationships you build with them. It is important to understand how they relate with others as part of increasing awareness of your brand. These relationships depend on maintaining communications and connections with your customers. A customer relationship management (CRM) funnel can help you to develop and manage leads, add to your customer base, and grow your business.

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What is a CRM funnel?

A CRM funnel is a methodology (as well as software) for tracking and communicating with current and potential customers. It enables you to track sales history, conversations, promotions, and other elements of the customer relationship. It also makes it easier to identify potential customers and those who have no interest in your offerings.

CRM funnels are similar to sales funnels, which are designed to attract and convert leads into customers. They enable your business to track and manage leads, as well as to determine steps along each stage of the funnel to move leads to the next stage. You can use a sales funnel to create a CRM funnel, which works within your CRM tool to automatically track the progress of your leads, and then nurture and engage leads along the path to becoming customers.

Key takeaway: A CRM funnel mirrors a sales funnel and serves to capture data on leads as they move closer to becoming paying customers.

What are the four stages of a CRM funnel?

A CRM funnel has four stages, which mirror the stages in a sales funnel.

Awareness

The first stage of the CRM funnel is awareness. This is when a lead develops awareness of your business and its products or services. Awareness may occur in various ways, such as from your email marketing, online and offline marketing campaigns, and social media. For example, a prospect might become aware of your company’s offerings when searching online for a solution to their problem.

Interest

The second stage of the CRM funnel is interest. The prospect shows interest in your products or services when they contact you through your website or follow you on social media. They might also provide their email address in exchange for a webinar or e-book.

Decision

The third stage of the CRM funnel is decision. The prospect plans to purchase your product or use your services. They evaluate their options by comparing your pricing and features against your competitors’ offerings. Your sales team might reach out to the prospect to determine if they are ready to buy.

Action

The final stage of the CRM funnel is action. Either the prospect decides to become a customer and moves forward to complete the purchase of your product or service, or they reject your offering and do not become a customer.

Key takeaway: As a lead moves from awareness to action, CRM software gathers data that supports your sales and marketing teams’ efforts to convert leads to customers.

How CRM automates sales at each stage of the funnel

A CRM funnel can automate the closing process and help your company to increase its revenue stream. It can also provide the following benefits:

• A CRM funnel can help your business to deliver its services in a way that better meets your customers’ needs. Since the CRM contains information on customers’ issues, you can use it to improve customer interactions and raise the level of your customer service.
• Your CRM contains data that can help you to understand your customers’ behavior. You can then use a CRM funnel to introduce products or services to customers when they need them or when they are open to learning about them. This will help you to identify your most profitable customers and avoid spending time on less profitable customers or leads who are unlikely to convert, optimizing the sales process.
• A CRM funnel can help your company to increase its sales using the information stored on current and potential customers.

Follow these best practices to automate sales at each stage of the CRM funnel.

Awareness = prospecting

You probably use multiple social media platforms to generate customer relationships. You can use CRM social media integrations to track these interactions with prospects. This helps you listen to and engage with prospects, building relationships with them through social media.

Every customer conversation (through live chat, email, cold calls, etc.) is an opportunity to generate leads. You can also use customer questions, feedback and complaints to find out what is important to your audience. Your customer support team can feed this information into the CRM software, and your sales team can use this data to identify upsell opportunities or ask for referrals.

Your CRM should organize prospects to make them easy to review and contact. You can then use the CRM to segment prospects into categories (e.g., region, industry, role, profitability). This will enable you to create marketing campaigns and custom communications for specific customer segments.

Interest = qualifying leads

Before you spend the time to market to your leads, determine which leads are most likely to become customers. Use your CRM for lead scoring – ranking leads according to their potential value and likelihood of becoming customers.

How you score leads will depend on what matters most to your business. For example, you could rank leads according to their contact information, company data, lead source or other factors. Your CRM would use selected variables in the formula you design to assign numerical scores to the selected leads. You can filter scores from highest to lowest and then focus on the leads at the top of the list.

Some leads will not be qualified after they have been scored. Use the CRM to determine why they were not qualified. For example, a lead might not have the budget for your product or service, or they might not need it at this time. You might have reached the wrong contact at the company. Include these reasons in the CRM so you can follow up later or remove them from the list.

Use the CRM to monitor interactions with leads. Determine how often a lead has interacted with someone at your company, their reasons for making contact, and what questions they asked or concerns they raised. Integrating your email account with the CRM enables you to record those interactions so you can filter key data and metrics (e.g., email opens and replies). Monitoring communications with leads will also allow you to identify other useful information, such as the key decision-makers in a company, the prospect’s budget, and the value of your product or service to the prospect.

Decision = quoting prospects

The CRM contains a lot of data about customers and prospects who have made it to this stage. Before you make an offer or discuss pricing, review the customer’s data in the CRM (such as their customer profile and your recorded calls with them) to uncover useful insights and personalize the experience.

For example, you could address the lead’s previously noted concerns from an email exchange during the phone call. This will show you understand the prospect’s issues and pain points, and that you care about addressing their needs.

Use CRM software to improve your efficiency by setting reminders to perform tasks on specific dates and times. You can set follow-up tasks and reminders to contact specific leads, and assign tasks to leads or contacts. Stay organized by checking off completed tasks, setting deadlines to submit quotes, and adjusting those deadlines when prospects do not respond by a given time.

You can also use the CRM software to track the activities of your company’s other sales reps. Publish activity reports to monitor quotes sent out, opportunities missed, calls and emails made, appointments made and concluded, notes taken, visits with prospects, and more. You can sort activities by groups, review email and call outcomes, and determine which sales reps are (or are not) moving deals to the next stage in the funnel.

Action = closing the deal

Use the CRM sales forecasting report to track the progress of deals in the sales pipeline. Evaluate each deal’s estimated close date and probability of closing. If a deal is not likely to close, you can determine the reasons and identify possible solutions to help close the deal.

Evaluate the effectiveness of your sales funnel and the CRM process. Determine where deals are getting stuck or being canceled. Use the CRM’s stage duration analysis feature to determine the length of time a deal spends at each stage of the funnel. Look at your historic data on successful and failed deals to calculate the likelihood of closing a deal. Publish reports to identify which sales reps are closing at lower rates.

For example, a sales funnel analysis report enables you to compare the number of closed deals to how many deals you had projected to close. This can help you to prepare and improve upon results when closing deals in the future.

Once deals have either been won or lost, use metrics in the CRM to uncover valuable insights into your results (e.g., win rate, average sales cycle, conversion rate of leads). This will enable you to review activities that worked best and determine which activities had poor results.

When deals are lost, record the customer’s data and the reason you lost the deal so you can follow up later. This will help you identify ways to overcome those reasons in the future. It might also provide an opportunity to approach the lead in a different way. You can also update the CRM to remove leads with low or no opportunities for closing, saving you the time and money of pursuing uninterested prospects. 

Key takeaway: CRM software is invaluable for automating many tasks at each stage of the CRM funnel. Contextualized lead data helps sales and marketing teams convert leads to customers.