Improving customer conversions is essential for SMBs’ sustainable growth and maximizing limited resources. Yet many struggle with knowing which conversion data to track and how to monitor it throughout the sales funnel.
In this article, you’ll learn how to overcome this hurdle and track the right conversion rates for your business. Discover how to set clear goals, qualify leads and use CRM tools like Pipedrive to gain real-time insights and drive more sales.
What is customer conversion, and why do SMBs get it wrong?
Customer conversion involves turning potential buyers into paying customers. Measuring conversions can indicate how well your business turns interest into revenue, helping you understand:
What’s working in your sales funnel
Where sales prospects drop off
How to improve your customer journey
Better conversion rates mean more efficient resource use, faster growth and higher return on your marketing campaigns and sales investment. However, the challenge for SMBs is knowing how to monitor their process in a way that helps them boost conversions.
One reason for this difficulty is that the lead-to-customer conversion process can vary from business to business. For one business, a typical conversion path may look like this:
Demo request → meeting booked → meeting held → deal created → deal closed
For another, converting customers might follow a completely different path, such as:
Ad click → product page visit → item added to cart → purchase completed
Even within the same business, there can be multiple conversion pathways depending on the product, channel or customer segment. For example:
A new visitor might convert by signing up for a free trial after reading a blog post
A returning customer might convert by clicking a promotional email and making a direct purchase
An enterprise lead might convert after several sales calls and a custom demo
Even when companies are clear on their conversion path, the following practices can prevent them from measuring customer conversions effectively.
Unclear goals and metrics
Clear conversion goals help you measure what drives sales revenue and make better decisions across the funnel. When everyone tracks the same outcomes, optimizing campaigns, qualifying leads and forecast sales is easier.
Without clear goals, teams can get distracted by likes or traffic spikes that don’t lead to meaningful actions.
Solution: Set clear, measurable conversion goals that align with your business objectives.
Say that your business growth target is to increase monthly recurring revenue (MRR) by 15% over the next quarter. To support this objective, your conversion goals might focus on trial-to-paid conversions instead of trial volume.
Poor lead qualification
Well-qualified leads convert faster and make your sales pipeline more accurate, letting your sales team focus on the people most likely to buy.
Businesses can struggle to define qualified leads. Usually, this is due to a lack of historical data for spotting patterns or simply not having the time or knowledge to clarify their ideal customer.
Yet without a shared definition of “qualified lead”, teams waste time chasing prospects who are unlikely to convert.
Find more of the best leads fast with your lead qualification ebook
Solution: Analyze your past closed deals to identify common customer traits such as industry, company size, buyer role or budget range. Look for patterns in the types of customers who convert quickly and deliver long-term value.
Then, use a sales CRM to set up lead scoring based on factors like company size, budget or behavioral signals. This process helps you rank prospects based on their likelihood to convert.
Note: If you don’t have historical data, create a basic ideal customer profile (ICP) based on your product’s value proposition. Clarify who benefits from your solution and what problem you solve. Use this to define a starting point for qualification, then refine your criteria as you gather more data over time.
Manual, inconsistent follow-ups
Timely, consistent follow-ups keep prospects engaged and reduce the risk of losing deals. Many SMBs struggle to follow up effectively simply because they don’t have the time, resources or systems in place. As a result, leads fall through the cracks.
Automation ensures every lead hears from you without adding manual work to your team.
Solution: Use a CRM to build follow-up email sequences based on prospect actions, like scheduling a demo or downloading a PDF. The CRM will then send personalized email sequences to nurture leads and keep them moving through the sales funnel.
Take a look at Pipedrive’s CRM as an example.
Use workflow automation to send personalized emails when the system creates a deal or reaches a specific stage. These automated emails keep prospects engaged while your team focuses on high-priority sales activities.
Here’s a breakdown of how the automation works:
No visibility into pipeline performance
Without tracking where leads drop off in the buying journey, SMBs miss opportunities to improve the customer journey.
Say that leads consistently stall after a demo. This trend indicates unclear next steps, a weak follow-up process or gaps in promoting the product’s value.
Without visibility into the sales pipeline, businesses might never identify this trend. As a result, sales and marketing teams miss the opportunity to refine messaging and remove obstacles that slow conversions.
Solution: Monitor pipeline stages with CRM dashboards to spot bottlenecks early. With Pipedrive, for example, you can create custom dashboards that display essential performance data.
Here’s an example of a Pipedrive dashboard:
With dashboards, you can see where deals get stuck, which sources convert best and where your sales process needs work. These key metrics help you prioritize the highest-impact improvements.
Does the conversion rate formula work?
The basic conversion rate formula creates a percentage that shows how well you turn leads into paying customers.
Here’s how the formula looks:
(Total number of conversions ÷ Total leads) × 100
It’s simple, quick to calculate and indicates whether your sales and marketing strategies are working.
For example, if your team generated 200 leads last quarter and closed 40 deals, your conversion rate would be:
(40 ÷ 200) × 100 = 20%
This kind of top-level metric helps you:
Compare performance across campaigns, channels or reps
Spot trends over time
Identify major drop-offs in your pipeline
However, the formula doesn’t always tell the full story.
Relying on one flat rate can be misleading because not all leads are equal. Some are unqualified, others are early-stage or not sales-ready.
The formula also ignores multi-touch attribution, meaning it doesn’t account for how different touchpoints (like ads, demos or content) influence the outcome.
The smarter way to use conversion rates: segment your data
Segmentation means breaking down conversions by categories like funnel stage, lead source or customer type instead of looking at one overall percentage.
This information offers a more detailed breakdown of sales performance based on where leads are in the buying journey.
For example, instead of tracking just the overall conversion rate, break it down by pipeline stages:
Lead → MQL (marketing qualified lead)
MQL → SQL (sales qualified lead)
SQL → deal won
Using the right software makes monitoring and tracking these conversion rates in real time easier. Technology gives you clear visibility into your sales pipeline and performance at every stage.
Consider Pipedrive as an example. You can use Pipedrive’s custom reports to view segmented conversion rates in a central location.
Here’s an example of a campaign conversion report in Pipedrive:
With clear visibility and real-time updates, you can quickly track different conversion rates across your sales funnel and pinpoint the real source of any issues.
For example, you might see a low overall conversion rate but discover a 70% close rate from demos, indicating that your real challenge lies in lead quality, not sales effort.
4 ways to optimize your SMB customer conversion rate
Targeting the right prospects, nurturing leads effectively and improving the customer experience can boost conversion rates, helping SMBs maximize resources and drive better sales outcomes.
Here are four practical ways to boost your conversion rates and accelerate growth.
1. Build a clear, repeatable sales process
A structured sales process aligns your team throughout the buying journey, ensuring every lead moves smoothly toward closing. A clear process helps you better oversee all leads, avoid missed follow-ups and capture more sales opportunities that lead to conversions.
Imagine a B2B IT services company struggling with inconsistent follow-ups and missed leads. It maps out its entire sales process by:
Defining key stages like initial contact, needs assessment, proposal and negotiation
Set clear criteria for when leads should move between stages, like receiving a signed proposal before moving to negotiation
Standardize follow-up tasks at each step, such as sending a proposal within 24 hours after a needs assessment call
With this structured approach, the sales team aligns on priorities and focuses efforts where they matter most. As a result, they reduce missed follow-ups, speed up the sales cycle and increase conversion rates.
Here are some ways to build a clear and repeatable sales process:
Plot the sales process | Defining the stages of your sales process (for example, “lead captured”, “demo scheduled”, “proposal sent and deal closed”) helps you create a consistent roadmap. A clear map makes it easier to manage leads and replicate success. |
Set clear criteria for moving leads between stages | Defining how leads move between stages (for instance, moving a lead from a demo scheduled to the proposal stage after the sales demo is complete) ensures that your team knows when to take action. |
Standardize follow-ups | Establish consistent tasks for your team to complete at every step, like sending a personalized thank-you email within 24 hours after a demo. When sales reps know exactly what follow-ups to send and when to send them, it’s easier to repeat the process. |
As your business evolves, refine the stages of your sales process to ensure your sales and marketing efforts align with new customer needs, market shifts and growth goals.
Regularly analyze sales performance, consumer behavior and conversion rates. If you notice prospects dropping off at a certain stage, update your messaging, follow-ups or stage criteria to keep leads moving forward.
A CRM system like Pipedrive helps you track and monitor this data. Visualize each stage of your pipeline to spot drop-off points and see how deals progress.
Here’s an example of a deal progress report in Pipedrive:
Use filters to spot trends, measure stage-by-stage conversions and make data-driven improvements to increase conversions and boost customer retention.
2. Target the right people
Targeting the right people ensures your team spends time on leads most likely to buy. Salespeople can then move high-fit prospects through the pipeline faster, boosting conversion rates.
Say you discover mid-sized companies convert fastest and deliver the highest lifetime value. As a result, you shift your social media ad spend and outreach to similar companies.
These changes help you shorten the sales cycle, better use your sales team’s time and increase the conversion of customers.
Here’s how to identify and target the right audience for your business:
Define your ideal customer profile (ICP). Identify your best customers’ common traits, like industry, company size or pain points. A clear ICP helps you focus on leads who are more likely to convert.
Use lead scoring. Assign scores to leads based on high-value traits, such as job title, engagement level and likelihood to buy. These scores help you to prioritize prospects that fit your ideal profile and focus on the most promising opportunities.
Filter out unqualified leads early. Set up quick qualification questions on forms or during discovery calls to ensure you spend time on the right prospects. For example, disqualify leads who fall outside your target audience or budget range.
Aligning marketing and sales teams on the shared criteria will ensure everyone targets the right people. When both teams use the same ICP and lead scoring rules, they focus on attracting and nurturing the right prospects.
A CRM like Pipedrive centralizes this information so everyone stays on the same page. Define, score and segment leads directly within your visual sales pipeline, providing sales and marketing teams with a clear overview of who to target.
The image below shows how to label deals based on their lead score to identify top prospects:
3. Respond to leads quickly and consistently
Fast, consistent responses help capture attention when interest is highest, increasing your chances of converting leads. Delays can cause prospects to lose interest or turn to a competitor who replies faster.
Say that one company responds to a lead within two hours and another takes a full business day. If both businesses offer similar pricing or services, the prospect will likely continue with the faster responder.
Studies also show that you’re far more likely to reach and qualify a lead if you respond within the first hour. After that, your chances drop sharply – 10 times for contact and six times for qualification.
Here are a few effective ways to help your team respond quickly to every lead:
Set up instant alerts for new leads | Instant notifications ensure your team knows the moment a new lead comes in so they can act quickly. Create automations in your CRM to trigger alerts via email, app notifications or task assignments when a lead is captured. |
Use email and call templates | Pre-written templates for common questions or follow-ups save time and ensure consistency in messaging. Sales reps can then send tailored emails within minutes rather than starting from scratch. |
Schedule reminders for follow-up tasks | Reminders help reps stay on track with timely follow-ups, increasing the chance of moving deals forward. For example, a reminder to call back after a demo ensures no opportunity slips through the cracks. |
A CRM streamlines the process of delivering speedy replies, making it easier to manage.
Pipedrive, for example, instantly notifies your team when new leads arrive. You can automatically assign leads to certain sales reps, ensuring faster and more personalized responses that boost conversion rates.
You can also access ready-made templates to speed up email replies or create your own with the email builder.
Pipedrive’s AI email writer also streamlines email creation. The software transforms simple prompts into professional sales emails, saving time and allowing sales reps to focus on other areas of work, like closing deals.
Here’s an example of an AI-generated email in Pipedrive:
4. Nurture leads who aren’t ready to buy immediately
It’s easy to focus on ready-to-buy leads, but nurturing colder prospects keeps your pipeline warm and boosts long-term conversions. Instead of losing touch, you build trust over time and stay top of mind until leads are ready to make a decision.
Say that a SaaS company has an email marketing list of leads that haven’t engaged with the business in over 30 days. They send a monthly email series to these subscribers, including practical tips, product feature highlights and case studies that address common pain points.
Over time, some of these leads re-engage with the company by opening emails, signing up for webinars and booking demo calls.
Receiving emails with advice and seeing the product’s value made them feel more confident in taking the next step, bringing them closer to a conversion.
Here’s how to keep colder leads warm and ready to convert:
Segment leads by readiness. Group contacts based on their stage in the buying journey. For example, you might tag one segment as “researching solutions” and another as “comparing vendors” so you can tailor messages accordingly.
Create value-driven drip campaigns. Deliver educational content to build relationships with potential customers without being forceful or salesy. For instance, sending weekly tips on how to solve common industry challenges.
Track engagement and adjust nurturing. Monitor opens, clicks and replies to identify leads moving through the funnel. For example, if a lead consistently engages with product updates, you can move them to a more sales-ready sequence.
Using the right technology is crucial for monitoring lead behavior and personalizing communications. Pipedrive, for example, streamlines key elements of the lead-nurturing process.
Segment contacts based on customer behavior, deal stage or custom fields. Sales reps can then send timely and relevant messages to leads that aren’t ready to convert, but keep them in the pipeline and moving towards a sale.
You can also create custom pipelines to categorize leads and visualize where they are in the buying journey.
For example, you might build a pipeline with stages like “cold lead”, “engaged”, “requested demo” and “ready to buy”.
Here’s how that would look:
This pipeline lets your team instantly see lead status and tailor outreach based on interest level. By matching follow-ups to each stage, reps can deliver more relevant messages, which helps move leads forward and increases the chances of conversion.
Final thoughts
Improving customer conversions involves focusing on the right prospects, building repeatable processes and using data to refine every stage of your funnel. Start by qualifying leads effectively and nurturing them through the sales process toward a confident buying decision.
With the right CRM, you can monitor sales performance and conversion rates in real time. Use Pipedrive to track key performance indicators (KPIs), automate follow-ups and uncover insights that lead to smarter decisions.
Sign up for a free 14-day trial to qualify leads faster and convert more prospects into loyal customers.
