How to build a lead generation funnel in 4 steps

Small businesses have been hit hard by the sudden changes in buying behavior that have accompanied the 2020s. From shifts to remote work (and then back again) to peak inflation rates, small businesses have had to navigate unexpected shifts in spending habits.

That's why it's more important than ever to develop an ironclad lead generation strategy. If you have a solid sales plan in place, you can adjust to changes by adjusting your strategy. A business that just relied on foot traffic to bring in customers, on the other hand, would have to build a lead generation funnel from the ground up if a major change interrupted people's normal shopping habits.

I want to share with you how my team has tackled lead generation. Because every business will have different lead gen strategies, your journey won't look exactly like this, but the goal is for it to spark some ideas that help take your lead gen to the next level.

Table of contents

• What is a lead generation funnel?

• Stages of the lead gen funnel

• How to build a lead generation funnel

• More lead generation funnel examples

• Tips for optimizing your lead generation funnel

• Automate the lead generation funnel

What is a lead generation funnel?

Lead generation is the process of bringing in potential customers and turning them into qualified leads.

The lead gen process is like fishing. You'll start by choosing the type of fish you're after and figure out where to find them, then choose the right bait for your hook and cast your line. It doesn't end there, though—once you've got a bite, you can't just start reeling in your line. There's a technique to getting your fish on the hook and bringing it in without losing it along the way.

You probably encounter lead gen funnels all the time without realizing it. For example, if you've ever been lured into a mattress store by a teenager's incredible sign-flipping skills (just me?), you were the victim of a lead generation funnel.

Stages of the lead gen funnel

There are five main stages of the lead generation funnel: awareness, interest, appraisal/desire, action/confirmation, and conversion. Each stage maps to a part of the lead generation funnel—top-of-funnel (TOFU), mid-funnel (MOFU), or bottom-funnel (BOFU), as you can see in the diagram below.

• In the awareness stage, you'll use a lead magnet to capture potential buyers' attention.

• In the interest stage, you'll capitalize on that attention by demonstrating your company's value and garnering interest in your brand.

• In the appraisal/desire stage, you'll focus the prospect's interest on a particular product or service that provides them a specific benefit or solution.

• In the action/confirmation stage, you'll convince the prospect to pull the trigger and buy the item they've been considering.

• In the conversion stage, you'll close the deal by making the sale.

How to build a lead generation funnel

To give you a sense of what a lead gen funnel looks like in practice, it should help to see the thinking behind an actual strategy used by a real company from start to finish. Here's the step-by-step process my company followed to increase sales. 

1. Find your target customers

At Solvid, we provide businesses with copywriting and content services, and part of our long-term strategy is to build a network of loyal brand ambassadors—AKA affiliates—that promote our services in return for a generous commission. Our goal was to generate enough quality affiliates that we didn't have to spend a dime on paid marketing. Our affiliates would take care of it for us.

So first things first: we needed to make sure that we were reaching the right people. In our case, we wanted to target bloggers as potential brand ambassadors.

We knew that bloggers often monetize their blogs once they start generating a good amount of traffic, and that one of the most popular ways to do that is through affiliate marketing. So after a few days of keyword research and competitor analysis, we came up with a strategy: produce an in-depth blog post covering the best affiliate marketing programs for bloggers.

2. Create great content (and other lead magnets)

We created the piece, and within a few months (which is what it takes to gain traction with SEO), it started generating around 500 daily visits. We'd initially not included our own program in the list to avoid seeming overly self-promotional on the first go, but once we saw that our content was offering value to readers, we added our own affiliate program to the list (only at the second spot). 

We were getting signups from the blog post, too. In the image above, you can see that the post generated 316 unique visitors, 34 of whom proceeded to the affiliate registration page. From there, 17 registered—that's a ~5.4% conversion rate. Not bad for a blog post, considering that we didn't even put our own affiliate program first on the list.

Lead magnets like this are, essentially, prospect bait. These are things that provide value to your target customer—guides, offers, information, entertainment—and get them "through the door," so to speak. And when it comes to lead magnets that provide value without breaking the bank, content really is king.

Content as a marketing strategy isn't new, but simply creating content isn't enough. Your content has to be good, not just…there. Content that gets attention but doesn't draw people in will get you solid brand awareness, but it won't generate leads.

Though we were lucky enough to see some immediate results, content alone isn't enough to generate reliable conversions. That's where calls to action, or CTAs, come in.

3. Use CTAs to drive traffic down the funnel

We used two types of calls to action (CTAs) to get more traction: sticky CTAs and exit CTAs. Here's what a sticky CTA looks like:

This banner wasn't very intrusive, and it generated a good number of signups (over 600, which we measured through OptinMonster).

Our exit intent pop-up was intended to capture the email addresses of people who were about to leave the website (meaning they were moving their cursor toward the close button).

You may find these kinds of pop-ups annoying as a reader, but as a seller, you'll find that not everyone agrees. This pop-up alone generated over 700 email subscribers over 12 months. 

You'll notice that these two CTAs have different goals—the first asks readers to sign up for our affiliate program, while the second asks them to sign up for our newsletter. Those who will move quickly through the funnel will be more likely to click the sticky CTA, while the exit CTA targets those who need a little more time in the interest phase. Which brings us to our next tactic: email marketing.

4. Engage leads with email marketing

Email marketing provides a way for us to keep leads engaged and show them more content that will continue to increase their interest and move them toward eventually signing up for the program. We wouldn't send the same types of emails to potential affiliates that we sent to potential customers, so we use ConvertKit to tag each subscriber with identifying information based on which form they used to sign up.

Once someone subscribes to our email list, they're segmented into a very specific email channel with its own chain of automated emails relevant to their interests—in this case, affiliate marketing.

The first email is a welcome email that includes links to resources on our blog that might be helpful for someone just starting out with affiliate marketing. We include a link to our affiliate program, but it's not front and center quite yet.

Two days later, we send out a second email, designed to promote a few specific affiliate programs—including ours. And the automated emails continue until someone signs up, at which point they're moved into a different email journey.

More lead generation funnel examples

Here are some more examples of how real companies use lead gen funnels to acquire, nurture, and convert leads.

Top-of-funnel

For a refresher, top-of-funnel refers to tactics that raise awareness and build interest.

If you're perusing an otherwise cuisine-agnostic online publication like Vulture to learn about the latest news in meme culture and come across an ad like this one for Peter Piper Pizza, congratulations, you've fallen into the top of a funnel.

With its big, bold-yet-vague "double up" claims and photos of presumably delicious pizza, this ad is purely designed to get your attention. You could make compelling arguments about what part of the funnel this belongs in, but I'd argue this qualifies as top-funnel since it's bringing awareness to a deal and brand that might otherwise be completely unknown to the viewer/lead.

Mid-funnel

Mid-funnel content is tricky because it presumes basic awareness of the product/brand as it moves the lead toward a period of appraisal, building desire and moving them toward action.

In this example, let's say you're perusing a post on the blog of SE Ranking, an SEO tool, to get insights on how to find backlinks on competitor blogs. It's reasonable to believe that if you're interested in backlink profiles and are familiar with the SE Ranking brand, you might be interested in an eBook on the effects of AI Overviews.

This sign-up form isn't a sale for SE Ranking since it's free, but it's an opportunity to move leads through the funnel from awareness through interest toward purchase.

Bottom-funnel

Now we're at the stuff all successful campaigns are made of: action and conversion. Once leads reach the bottom of the funnel, the idea is that they're prepared to convert from lead to customer.

In this not-explicitly-but-clearly-automated email from Anthropologie, the hypothetical recipient is sent an enticing $20 off their next purchase, complete with links to clothing and home goods for which $20 will probably not make much of a dent. 

In this case, said hypothetical user is either already an Anthropologie customer or close enough to being one that they've signed up for the AnthroPerks program for promos like these. The discount offer is just a final nudge to get them to buy.

Tips for optimizing your lead generation funnel

Now that you've built your lead generation funnel, use these tips to optimize it: 

• Qualify leads: Determine what leads are most likely to purchase, and direct more efforts toward those leads. For example, a lead that starts a free trial is likely further down the funnel than a lead who clicks a CTA. 

• Find tools that fit your workflow: There are many lead generation tools on the market to help drive traffic, capture leads, and facilitate communication. For example, if you need to schedule meetings with leads, choose software that manages your calendar and allows you to set up video calls. 

• Use trial and error: Experiment with different strategies and lead funnels to find what your audience connects with. A few examples of strategies to test include creating different types of content, adjusting advertising efforts, and testing landing pages. 

• Learn from rejected leads: Analyze rejected leads by looking at the source of those leads, weighing the amount of engagement, and asking for feedback to understand what happened. 

• Keep quick turnaround times on leads: Consider investing in lead management automation to ensure fast lead response times. 

Automate the lead generation funnel

When automated correctly, a lead generation funnel is kind of like having a salesperson to work on bringing in new clients while you work on other things.

Zapier's no-code automation can help you do just that with automated workflows across thousands of apps, including popular marketing and lead nurturing tools. Automatically track your leads, send them to your email marketing or CRM software, or even nurture them—without any hands-on effort.

You can also use Zapier Chatbots to build an AI chatbot that captures leads, Zapier Interfaces to create a custom lead capture form, and Zapier Tables to create an AI-powered lead management table. Manage your entire lead gen funnel all in one automation-first tool, so you can focus on all the other things that make your business tick. Here are some templates to get you started.

AI Chat for Lead Generation Template

Increase lead engagement with a conversational chat experience embedded on your website.

Try it

Lead Router Template

Alert qualified sales reps with active claiming and decrease lead response time.

Try it

Lead Tracker Template

Easily track your sales leads, send custom emails, and close more deals.

Try it

Related reading:

• How to automate your email marketing for better communication

• Fatal mistakes in lead generation strategy

• How to deliver content that matters

This post was originally published in February 2021 and has also had contributions from Shea Stevens and Bryce Emley. The most recent update was in August 2024.