What is a Sales Funnel (+ Where a CRM Fits Into It)?
This article covers what a sales funnel is, why it’s crucial to success in business, and where your CRM fits in.
From the moment a prospect becomes aware they have a problem that needs solving, their buyer's journey begins. As they move towards purchasing to solve their problem, they must travel through various stages of their buyer's journey.
By the time they purchase your product, many potential customers have already been lost at various stages of the funnel. Each is a potential lead that could have been easily guided to the end of their journey — translating into profit for you. But due to inefficiencies in the sales funnel, they've slipped through the cracks.
If you're looking for a way to prevent this from happening, then read on because this article will explain how you can use a CRM to make sure your sales funnel stays efficient and doesn't let anything slip through.
What is a Sales Funnel?
The term "sales funnel" is just the description sales and marketing teams use to visualize the collective buyer's journeys that prospects go through before making a purchase from your business.
The reason a sales funnel best depicts the sales process is because it's symbolic of the customer journey when seen collectively.
The top of the funnel is always broad to signify the large number of people that become aware of your brand or business. As people lose interest, the funnel gets smaller to signify that only a few prospects continue their buyer's journey. Then, the funnel thins more, and only the few that make a purchase remain at the bottom of the funnel.
Sales Funnel Stages
In general, the sales funnel is divided into four stages:
A well-defined sales funnel (something achievable with sales funnel software like a CRM) should aim to properly define these stages so that the entire buying process can be made more efficient.
The funnel begins at the awareness stage. This is when prospective customers become aware of your product or service.
At this stage, many of them are often not even aware they have a problem. However, as they are exposed to your product or service, they become more aware that they have issues that can be solved.
This stage should focus on generating as much initial curiosity as possible about your product.
Once you’ve sparked their curiosity, you move leads to the stage of interest. Here you develop more curiosity so that leads are actively interested in what your brand has to say.
This is also the stage where you can educate customers about problems they might face and how you could help solve those.
At this stage, your prospect's pain points are obvious to them, and they're now considering your business as well as competitors in the lead-up to making a purchase.
This stage is where you want to differentiate yourself from the competition. You'll also want to continue to build a relationship with your prospects and pass them over to your wonderful sales team.
This is the stage where a potential customer turns into a paying customer. This is where you have a chance to make the best offer. It's where you'll close the sale and end the sales funnel process.
Many marketers lay the groundwork for engagement during this phase, meaning they try to set customers up for their next purchase (even if that's weeks or months away).
Sales Funnel Vs. Sales Pipeline
While the sales funnel represents the total number of prospects at each stage of their buyer's journey, the sales pipeline represents the stages an individual consumer goes through on the way to making a purchase.
The pipeline has various stages similar to the sales funnel. These are slightly different to account for the individual.
The sales pipeline begins with lead generation. Lead generation involves making sure you capture leads and then qualify them to make sure they're a good fit.
Once a lead has been qualified, you can ask for a meeting where you can either aim to educate or, if the lead is ready, propose an offer. After this, all that's left is for you to close the lead.
Customer retention is also an important part of the pipeline because it's a lot easier and cheaper to retain a customer than it is to sign a new one. In fact, increasing retention by 5% can increase profits by 25%.
Sales Funnel Vs. TOFU, BOFU, and MOFU
The sales funnel can be segregated into three basic stages for the purposes of simplifying marketing and sales efforts. These stages are the Top of the Funnel (TOFU), Middle of the Funnel (MOFU), and Bottom of the Funnel (BOFU).
Leads at the TOFU stage are not always qualified. By focusing on increasing awareness, they can be moved towards the MOFU stage, where the focus should be on providing information and differentiating your brand from the competition.
Finally, at the BOFU stage, businesses can make an offer. This is done to only the most qualified leads that remain at the end of the funnel.
Sales Funnels and CRMs: A Match Made in Heaven
A successful business depends upon sales efficiency, meaning as many qualified leads as possible are moved to the next stage of the funnel. Businesses that want to seriously boost sales performance need to use a Customer Relationship Management (CRM) tool to ensure that no qualified lead slips through the cracks.
CRM software is ideal here because of the numerous features that make it a perfect fit for boosting your sales reps’ sales funnel management capabilities.
Benefits of Integrating your CRM Into Your Sales Funnel
Integrating a CRM with your sales funnel lets you keep track of your individual interactions with prospects. Then you can personalize your interactions with them depending on the stage of the funnel they're at.
You also get a better understanding of customer behavior and can target leads at better times when they're more likely to convert.
A CRM also allows you to use marketing automation at various stages of the funnel. This way, you can automate several interactions and free up your sales reps.
With a CRM like Really Simple Systems, you can have notifications set up to ensure that sales reps follow up with cold leads. Automation will also catch any leads that slip past your sales reps so that you won't lose them.
How To Implement a CRM Into Your Sales Funnel
By implementing a CRM with your sales funnel, you take a more active approach to the sales process.
At the top of the funnel, you aim to spark curiosity, and by implementing a CRM, you can potentially use data from online behavior to target leads more appropriately.
When handling leads from the middle of the funnel, you can use previous interactions, which have been stored and recorded by the CRM, to personalize and create better messaging. This helps you nurture a relationship with a prospect.
Finally, at the bottom of the funnel, you can use a CRM tool to follow up with leads that haven't been closed yet and automate interactions so that they'll happen when they're more likely to make an impact.
All this makes a good case for using a CRM like Really Simple Systems, doesn't it?
Best Practices For Seamless CRM Integration
When attempting to integrate a CRM with your sales funnel, it's of utmost importance that the data that's going into your CRM is of the highest quality. Inconsistencies with raw data could be magnified and create misleading projections that are detrimental to everyone involved. So, minimize manual entries and automate as much as possible.
Aim to provide proper training to the sales reps that will handle the CRM so that they're aware of all the features and how powerful the software they're using actually is. This will reduce mistakes.
Use metrics to help you assess your sales funnel. This will make sure you catch any sudden dips in performance.
Plans the transition a few weeks in advance. This will help you avoid common transition pains like losing access to vital tools in the middle of a busy workday.
Transition sales reps slowly. Don't go cold turkey with your old tool.
Elect a change leader. This person can guide everyone else through the process and be a beacon of light.
Give your sales reps plenty of notice. This will help them prepare.
Characteristics of a Good Sales Funnel
Let’s take a look at some important factors to consider if you want to build a strong sales funnel:
It’s Designed For YOUR Target Audience
A good sales funnel shouldn't be a copy of another business's sales funnel. What works for them may not work for you.
Instead, consider past customer interactions and your buyer personas carefully and build your own funnel from scratch.
It's also worth asking existing customers why they moved past the interest stage and turned into paying customers. This will help you see what's working and what isn't.
It’s Flexible and Re-visited Regularly
The processes you use to create awareness and generate interest among your potential customers might change as you make improvements and try new methods out. Two years ago, for example, marketers didn't depend on TikTok like they do today. Imagine where we will be two years from now.
Your sales funnel should be able to actively accommodate those changes, and you should adjust it when there are changes.
It Helps You Qualify Leads and Prioritize Accordingly
A good sales funnel should make it easy to qualify leads and keep track of them through the funnel. It should also facilitate easy prioritization, allowing you to focus more on leads that are more likely to convert and turn into paying customers.
Apart from this, it should also keep track of qualified prospects as they move to the next stage and follow up when required. It should also send notifications to your sales reps and help them shorten the sales cycle by reducing the time it takes to move a lead through the pipeline.
It’s Driven By Metrics
A good sales funnel should be driven by metrics. Some important metrics to consider are:
Lead velocity rate. This is a good indicator of your sales revenue. It basically signifies the month-to-month growth in qualified leads and measures how many are converting into customers from those you're currently working with.
You can also set a goal and compare your progress, like in this graph:
Conversion rate. This is how many leads convert to customers. Based on the software you use to keep track of your sales funnel, you can analyze the conversion rate across each stage of the sales funnel.
Opportunity count across stages. This will help you gauge how easily sales reps are moving leads down the funnel. You should have a similar number of opportunities or leads in each stage. A large number of leads in one stage signifies difficulty moving to the next stage (something you'll need to resolve).
Time spent on each stage. This is an important metric to track to ensure that you're not being too aggressive with your sales tactics and are allowing enough time for the lead to be nurtured and primed at every stage. On the flip side, it can stop you from leaving leads to stew for too long.
Marry Really Simple Systems and Your Sales Funnel
If you've read this far, you're now undeniably aware of what it takes to build a solid sales funnel and how crucial it is to your entire sales team and their performance.
Not only does it determine how you do as a business, but it also plays a crucial role in ensuring that your prospects are given the appropriate attention they deserve.
To ensure that you get the most out of your sales funnel and plug any leaks, make sure that you're using a CRM.
Really Simple Systems is a CRM designed specifically to ensure that whether you're in sales, marketing, or customer service, your business is never struggling with managing leads.