7 Steps to Creating an Effective CRM Process

Updated Dec 2, 2022.
Effective CRM Process

Every business strives to profit from the product they sell or the services they offer. Smart businesses use customer relationship management (CRM) to improve customer relationships for profit-making.

There is a higher chance of keeping your existing customers loyal and acquiring new customers if you implement the right steps of the CRM process.

In this article, you will learn the six steps for creating an effective CRM process to help you effectively keep in touch with your customers, respond to their queries, and provide robust solutions to customer complaints.

Let's get started.

What is a CRM Process?

The customer relationship management process, CRM for short, refers to the strategies used to interact with acquired leads and customers in a meaningful and personalized way to ensure loyalty and continuous patronage.

Effective CRM improves customer interactions, engagement, retention, sales management, contact management, business process management, and marketing automation: both the customer and the business benefit from the steps in the CRM process.

You need a clear and detailed understanding of the customer lifecycle to implement your CRM strategy. Without understanding the customer life cycle, you will struggle to implement your strategy and CRM best practices effectively.

The CRM process deals with every important aspect of business operation that deals with customer data, such as business development, sales, customer service, and marketing.

Stages of the Customer Relationship Management Process

Four stages make up the CRM process irrespective of the CRM software you use. These four stages correspond to every step in the customer life cycle. They summarize how the CRM process works and how you can use it effectively in real-life situations in various organizations.

If you follow these four steps diligently with the right CRM tools, marketing teams in various organizations will produce the desired result regarding customer loyalty, customer satisfaction, retention, conversion, and business growth.

1. Marketing

Through marketing, existing and potential customers get informed about the product or service the organization is willing to offer at a particular time.

With marketing automation software integrated into the CRM system, organizations can easily automate daily marketing tasks like sending emails and following up on social media engagement. You can use it to automate marketing campaigns tailored to your target audience.

Marketing CRM software reduces the workload on the marketing team and business owners, enabling them to focus on strategic marketing initiatives to grow the business.

Examples of marketing automation software are Constant Contact, GetResponse, ActiveCampaign, HubSpot, and Keap.

2. Sales

Among key benefits that CRM software offers, sales force automation is a key benefit that business owners and sales managers take advantage of for business growth and to increase revenue.

The automated sales process makes the job of the sales team easier. Sales reps must endure stress while manually tracking leads, and following up has been eliminated.

Sales CRM software helps sales reps better understand their sales pipeline and funnel. Thanks to data from past successful sales and analysis of sales notes, the general sales experience in the organization will improve significantly.

Sales Funnel Stages and Pipeline stages_
Source: ServiceSource

3. Conversion

Converting leads into paying customers is a crucial step in the CRM process. The whole essence of your marketing campaigns and sales pipeline is to capture new customers and retain existing ones.

You can use CRM software to convert qualified leads you have reached out to paying customers effectively. CRM serves as your central customer database. Your sales, marketing, and customer service teams rely on your CRM database for customer conversion.

Cloud-based CRM software gives sales reps insight into their progress level with each customer. Thanks to automated messages and communication features, your sales team can convert leads into customers at all times and guide them to make the purchase.

4. Customer Service

The efficiency of an organization’s customer service has a lot to do with the organization's success. An organization’s ability to provide superior customer service will help to build strong customer relationships.

A CRM system helps administer a good customer service experience that your customers will not forget easily. You can retain customers and improve customer loyalty with the right CRM software.

Improving customer loyalty with the right CRM software
Source: Zendesk

A major component of good customer service is maximizing customer data to ensure every customer has a great customer service experience.

You can easily keep track of all your customers and attend to their various needs at the appropriate time with the right CRM software.

7 Steps for Creating an Effective CRM Process

The Customer Relationship Management (CRM) process describes certain important steps organizations take to effectively manage and improve their relationship with leads, prospects, and present customers.

A CRM system allows organizations to successfully streamline their operations and every customer interaction to build quality relationships with customers.

1. Generate Brand Awareness

Establishing an effective CRM process requires the organization to build brand awareness. You can not get loyal customers if your brand is not known.

Social media and advertisements can create awareness about your products and services for potential customers.

Not every person will be interested in the product or services you offer. The marketing team is saddled with the responsibility of researching how best to target audiences relevant to the organization’s products and services.

Your team should focus on historical customer information such as purchasing behavior, preferences, interests, and demographics.

To make the targeting exercise effective, the team creates a customer avatar or persona to create unique customer segments.

After the segmentation, you can launch targeted marketing campaigns based on audience insight earlier acquired that resonates with your customer base.

You can easily acquire data, discover behavior patterns of past leads and get insight into the best strategy for getting more conversions with the right CRM software.

Creating marketing campaigns becomes easy with the data you have acquired. You can customize the campaign to resonate with your target audience and increase conversion.

Marketing Campaign Management template
Source: Smartsheet

2. Acquire Leads

Introducing your business to interested customers is not enough. You have to take a further step: generate leads. Leads are individuals or organizations who have shown interest in the product or services you are willing to offer.

The sales or marketing team or both are responsible for lead generation. Your sales team has to identify lead qualification criteria for your target audience.

The four Q's to lead generation
Source: XXII Brands

Sales reps should use proper communication channels to engage the target audience. The marketing team can use tools like sign-up forms on your website and landing page builders to acquire visitors' data.

Your sales team can effectively acquire the data of visitors and answer their questions with the CRM’s live chat function.

Acquire Leads
Source: Pepper Cloud

3. Convert Leads into Customers

Acquiring leads and introducing your brand and company to potential customers is an important step in the CRM process, but that is not the end. Other vital activities must follow for you to get the desired results.

After generating viable leads and capturing the interest and attention of prospects, the next phase involves ensuring that these prospects end up being paying customers.

Your sales team has to be knowledgeable in identifying how interested leads are in your offer and their degree of interest. They can use CRM’s lead scoring tool to achieve this goal.

Lead Scoring Example
Source: Smith AI

You will have to apply a combination of marketing automation and content marketing to get the desired result. A CRM solution can help you with this process. CRM properly analyzes and captures the lead’s interaction with their specific interests and activities.

After this, the sales team measures lead interests and can build further trust with potential customers until they are compelled to purchase. Lead management is crucial for lead conversion.

Lead Conversion Process
Source: SlideTeam

Lead conversion is not the same for all businesses; it implies that you can not use the same strategies and tactics for every business.

For example, the strategies implemented to convert leads into paying customers for a retail business like a laptop store differ from that of a high-value service organization like a real estate company.

For the laptop store, the conversion strategies may include sending promotional marketing emails or SMS marketing to compel potential customers to purchase the available goods.

SMS Marketing vs. Email Marketing
Source: Textedly

On the other hand, a high-value service organization like a real estate company may include more complex business processes or sophisticated approaches like:

  • Contracts and cost negotiation,
  • Sending and revising proposals,
  • Consistent follow-up conversation to convince the potential customer to make a purchasing decision

The primary purpose of the conversion phase is to ensure that potential customers who have shown interest in the products or services offered to end up as paying customers.

4. Nurture Leads

Nurturing leads is a vital step in successfully building your consumer’s loyalty. Happy and loyal customers keep returning to purchase the same product or service or other products and services from you. Proper lead management is crucial for nurturing leads.

Email marketing stands out among various strategies for effectively nurturing leads. It is one of the most effective ways to nurture leads into repeat customers.

To ensure loyalty, you can carry out the nurturing process through email marketing by consistently sharing relevant content based on their preference.

Some of the best email marketing software tools include ActiveCampaign, Constant Contact, Sendinblue, HubSpot, and Moosend. You can use these tools to help you build and grow your email list.

A bespoke approach while using the email marketing strategy may not be the best decision to get the best result because, in most cases, your costumes have different preferences.

Because your customers have varied preferences, you can utilize the email marketing list segmentation.

Email List segmentations Results
Source: SendPulse

Email marketing list segmentation helps you build various email marketing distribution channels based on demographics, past purchase history, and various pages visited on your website.

Here is a list of tactics content sales professionals can use to nurture their leads.

  • Blog posts about key features of a product
  • Introductory product demo videos
  • Email newsletters about useful services
  • Link to relevant webcasts or podcasts
  • How-to articles or eBooks
  • You can use whitepaper with customer case studies and testimonials
  • Survey about customer goals or product preferences

5. Drive Upsells & Cross-sells

Get repeat buyers acquainted with your other products or services after successfully building your customer database.

You could inform your customers about the relevant product releases, upgrades to their everyday purchases, and if a similar product to their usual purchase is available in-store to add more value than their original purchase.

Inform customers about a different product that may interest them based on their purchase behavior and preferences.

Two sales strategies are vital to accomplishing these tasks effectively: cross-selling and upselling.


Cross-selling is a sales strategy involving suggesting complementary products or services to customers during their purchase to get them to buy these additional products.

This strategy aims to gain more value from a deal or transaction. With this sales strategy, you can generate more revenue from customers ready to purchase a special deal.

Cross-selling works when you pair a complementary product with the product the customer wants to buy to encourage the customer to purchase both products or services.

For instance, a cell phone retailer may pair the phone he has for sale with a fancy pouch and ear pods at a discounted price to encourage the customer to make the purchase.


Upselling is an effective sales strategy to encourage existing customers to purchase additional products or services. Sometimes, you may upsell an upgrade relating to the original purchase.

Cross-selling vs. upselling - online mattress store example
Source: ConvertFlow

The purpose of upselling is to ensure that you can generate more revenue from your loyal customers by convincing them to buy more products similar to the original product they intended to purchase.

A typical example is selling certain utensils in groups to ensure the customers buy every utensil in the group. You can inform your customers about another product that offers more features than the original product the customers buy.

CRM technology helps to organize your customer list based on their purchase history and create custom email templates specific to relevant products for each group to send these emails to customers.

You can set reminders to ensure that you make regular check-in calls with repeat customers. This strategy helps you get useful customer feedback and information on improving the quality of your product or services and customer experience.

6. Drive Referrals

Referrals can be an effective way to reach your target audience, increase your customer base and grow your business without having to incur too much cost. You can effectively manage your referral program with an effective CRM tool to get the best result from the program.

The ROI of Referral Programs
Source: Referral Rock

A business referral is when an individual in your network recommends your business, products, or services or promotes your brand to prospects.

Referrals can occur during regular conversations or due to a conscious marketing strategy driven by marketing managers.

Building brand awareness becomes possible with an effective referral program, which results in an increased customer base and helps the business generate more revenue.

You can generate more leads for future conversion by driving referrals. They are important in business growth. You need to establish multiple referral systems which allow your customers to refer you.

Here are four referral strategies you can implement to grow your business.

Direct Referrals

With a direct referral strategy, your existing customers do the job of a referee by telling people in their world about your business, which improves your customer base.

Implied Referrals

Implied referrals operate so that you will carry out certain services for people that are of key benefit to them without directly promoting your business. These services you offer will naturally promote your business and drive referrals.

Tangible Referrals

With this referral strategy, you give your current customer's gift items of significant value to give to friends or people around them as a referral source. This gift aims to attract potential customers within the sphere of influence of your current customers.

You can run this referral program more than once a year and create a reward system for your customers when the gift item turns into real customers as a motivating factor.

Community Referrals

Various community organizations require support, mainly financially, to effectively carry out their activities. By partnering with these organizations, your business will get the promotion it requires to increase its customer base and build brand awareness.

7. Increase Customer Retention

Customer retention describes a company’s capacity to keep customers engaged with its products and services.

Increasing customer retention is vital because it provides organizational insight into their efficiency regarding business processes and customer relations management.

To increase customer retention, you will have to boost customer loyalty. By increasing customer retention, you also increase brand awareness and ensure that the organization generates more revenue.

Implementing Customer Retention for your business
Source: WebEngage

Create a Better Customer Experience with a CRM Process

The CRM process is an effective business strategy that allows business entities to understand their customers. It prevents poor customer service by delivering what customers expect to gain from making a purchase.

To create a better customer experience and stand out from your competitors, you must deliver a personalized and impactful customer experience.

People tend to respond to organizations that portray a level of understanding of their specific needs and show concern about their wellbeing.

If their experience with your organization gives them a feeling of belonging and value assurance, they will most likely be loyal to the organization.Applying these seven steps in the CRM process with the appropriate CRM tool will certainly deliver superior support at every phase of every customer journey to ensure you create a better customer experience than your competitors.

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Martin Luenendonk

Editor at FounderJar

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.