How to Build a Lead Generation Funnel - Step-By-Step

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How to Build a Lead Generation Funnel – Step-By-Step

by | Jan 2, 2023 | Marketing

Are you looking for a surefire way to generate leads for your business?

Well, you’ve come to the right place! In this article, we’ll be exploring how to build a lead generation funnel from scratch – step-by-step.

That’s right – no leads will be left behind!

We can promise that by the end of this article, you will have created a foolproof marketing funnel and have loads of leads coming your way.

Join the FREE 5-Day Lead Challenge


What Is a sales funnel?

Lead Generation Funnel

A sales funnel helps any business to increase leads, conversions, and sales. It’s a vital component of every single business. No exaggeration.

It’s a visual representation of the journey a potential customer takes from discovering your business to making a purchase, and becoming a raving fan.

In other words, it’s a system designed to take a complete stranger to shut up and take my money”.

With the help of a sales funnel, businesses can nurture prospects through each step and create an effective, and personalized digital marketing strategy.

The core purpose of creating a sales funnel is to convert more visitors into paying customers.

By providing valuable content at every stage in the buyer’s journey, you can guide them down the path towards becoming raving fans.

Each element in your sales funnel should be designed to further engage prospects until they are ready to make the final purchase decision.

From offering free resources like eBooks or webinars to presenting compelling offers that drive conversion, these elements can make all the difference in helping businesses build an effective sales funnel.

In it’s most basic form, it is broken down to 3 stages.

  • ToFu – Top of Funnel – Target Audience Awareness
  • MoFu – Middle of Funnel – Engaging Potential Customers
  • BoFu – Bottom of Funnel – Converting New and Current Customers

What Is a Lead Generation Sales Funnel?

A lead generation sales funnel is the very top of your sales funnel and it’s usually a part of your ToFu (Top of Funnel) strategy.

Think of a lead generation funnel as the bridge between complete strangers and potential customers (leads)

It’s a system within a system.

It starts with attracting people in your target audience.

Then it moves onto capturing those leads – by offering them a super valuable lead magnet that it would be stupid for them to resist – followed by getting them to click through to the landing page and giving you their contact information.


B2B Lead Generation Funnel vs. B2C Lead Generation Funnel

The key factor in a B2B or B2C funnel is its priceregardless of the audience it’s selling to.

When selling products with high prices, you need to provide more value in their lead generation funnel in order to justify the increased cost.

The more valuable your product is, the more trust the customer must have in order to make a purchase. This is because expensive products demand greater levels of commitment from customers.

It’s one of the reasons why B2B funnels tend to have longer sales cycles because the product is more expensive.

Lead Generation Funnel Stages

There are 3 primary states of a typical lead generation funnel.

  • ToFu (Top of Funnel)
  • MoFu (Middle of Funnel)
  • BoFu (Bottom of Funnel)

Top of the Funnel (TOFU) – For Lead Gen

TOFU is an important step in lead generation that focuses on creating interest in your brand and developing relationships with potential leads.

It involves activities such as content marketing, influencer marketing, webinars, email campaigns, SEO and social media campaigns to drive traffic your product or service.

The main objective of TOFU is to create awareness and attract website traffic from complete strangers who are likely to become leads.

It’s important to create content that speaks directly to these prospects and engages them by offering helpful solutions or providing valuable information about your business.

Otherwise, if you just have attention grabbing content that isn’t targeted for your audience, you can get a lot of traffic, but not many qualified leads.

Middle of the Funnel (MOFU) – For Lead Gen

When it comes to lead generation funnels, MOFU is when a visitor has engaged with your brand.

The purpose of MOFU is to keep your audience engaged with you, share some more details about your offer, and drive them to convert to a lead (BOFU)

The distance between TOFU and MOFU for a typical lead generation funnel can be quite short. Usually just a click away.

MOFU activities can include sharing more information and benefits of the ebook you’re giving them, show them a demo of the template you’re offering, maybe a few bonuses to help push them down to the next step.

Bottom of the Funnel (BOFU) – For Lead Gen

Bottom of the Funnel (BOFU) is an integral part of the lead generation funnel.

It is the stage in which prospects are ready to make a decision and convert into a lead.

BOFU is used to target customers who have expressed a strong interest in your product or service, and have shown signs that they are ready to become paying customers.

At this point, it’s important for marketers to use key tactics such as remarketing campaigns, and retargeting ads.

These tactics will help you re-engage with these potential customers by providing them with relevant information about your product or service through various channels.

Additionally, utilizing customer testimonials and reviews can be helpful in persuading customers to move forward with making their conversion.

At the end of this step, they will have entered their contact information in exchange for the bribe (lead magnet) you offered them!

Lead Magnets (aka prospect bait)

A lead magnet is essentially the bait on your hook for fishing potential prospects and customers.

Lead magnets can range from PDF guides, to quizzes, or free trials for software.

The type of prospect bait you use heavily depends on the type of customer you want to catch.

Just like fishing!

How To Build a Lead Generation Funnel

Follow these 8 steps to create your own lead generating funnel for unlimited high quality leads.

Step #1: Define Your Target Audience

You need to know exactly who you are speaking to if you want high quality leads.

When you try to market to everyone, you market to no one. Be specific on exactly who your target audience is.

If you have an established business, you can look back on your customer data to see who are buying your products.

Is it mostly moms? Is it fitness buffs? Is it techy people? Don’t assume, look at your data and make data-driven decisions.

Once you identify who your existing customers are, then you’ll be able to strategize about how to attract more people that resemble them.

If you’re a new business, then you’ll need to make an educated guess. Who is likely to benefit the most from your products?

Step #2: Identify A Problem Your Target Audience Is Struggling With.

Once you’ve identified your ideal customers, take the time to research them.

This can help you better understand their needs and find new ways to make what you do even more valuable for them.

To get to know your audience better, go online and observe their discussions.

  • Relevant Twitter Hashtags
  • Relevant Subreddits (Reddit)
  • Relevant YouTube video comments
  • Relevant Online Forums
  • Relevant Facebook Groups
  • Relevant Pinterest Pins
  • Relevant Quora Discussions

Your goal should be to find a painful problem that your ideal customers are struggling with, either the same or related to the problem that your frontend offer solves.

Once you’ve found a painful problem, it’s time to create a lead magnet that offers a solution to it.

Step #3: Create a Lead Magnet That Solves That Problem

Your lead magnet can be anything that your ideal customers can either download directly to their devices or access online:

  • An ebook.
  • A video course.
  • An email course.
  • A cheat sheet.
  • A spreadsheet.
  • A template.
  • A step-by-step plan.
  • A free trial.

…etc. You get the picture.

You want to pick a format that is best suited to convey your message. If you were in your ideal customer’s shoes, in what form would you prefer to receive that content?

What’s important here is that you approach creating your lead magnet with the same seriousness that you approach creating your paid products.

You want your ideal customer to come away feeling that they have learned something valuable from your lead magnet and build trust at the start of your relationship.

Step #4: Create a Landing Page for Your Lead Magnet

So now you have your lead magnet, now what?

Time to create a landing page for it.

Think of it as a sales page but instead of asking for money you are asking for the potential customer’s email address.

Since lead magnets are free, “selling” them doesn’t require much persuasion, so their landing pages tend to be short.

They are called squeeze pages.

Because you’re “squeezing” a prospect by asking them for their email in exchange for a goodie.

Sometimes, they can be full on sales pages with testimonials, social proof, MORE social proof, bullet points, and whatever other content needed to help persuade the lead to enter their information.

You might be saying to yourself “Tim, it’s crazy to put this much effort into persuading people to download my freebie!”

But it’s not. It’s clever.

Think about it:

  • The better your squeeze page is, the more people will download your lead magnet.
  • The more downloads on your lead magnet, the more leads you have that you can sell to.
  • The more leads you can sell to, the more sales you will make.
  • The more sales you make, the more you and your customers lives will change.

So treating your lead magnet landing page as a proper sales page makes sense.

Definitely consider doing it yourself.

Step #5: Create a Lead Nurturing Email Autoresponder Sequence

You also need a lead nurturing email autoresponder sequence.

This means a series of emails that are automatically sent to everyone who downloads your lead magnet.

This email sequence should:

  • Provide value to the potential customer.
  • Warm the potential customer to the idea of purchasing your frontend offer.
  • Make the sales pitch for your frontend offer.

What’s important here is to strike the right balance between providing value and selling your product.

Focus too much on the “value” and you risk leaving money on the table. Focus too much on the “sales pitch” and you might put the potential customer off.

Step #6: Driving Traffic To the Lead Magnet Landing Page

It’s time to start driving traffic to that landing page.

It’s safe to say that the fastest way to do that is via paid advertising. Set up a Facebook or Instagram ad campaign. You can quickly determine the effectiveness of your lead generation funnel.

Although paid ads can be an effective short-term strategy, SEO should be your main focus in the long run. Doing so will help you generate a steady flow of leads without having to constantly rely on paid advertising.

Using Paid Advertising (PPC) To Generate Leads

Paying for traffic is the fastest way to get eyes on your landing page.

Imagine advertising platforms are a major highway (Google, LinkedIn, Facebook, Instagram, etc) because they own all the traffic.

By buying ads, you’re simply building an “off ramp” from that highway to say “hey, check out my offer that would help you solve your problem.”

Paid Advertising is the fastest method to test your offers immediately.


Here are some examples of paid traffic sources:

  • Facebook Ads
  • Instagram Ads
  • Google Search Ads
  • LinkedIn Ads
  • TikTok Ads
  • Native Ads
  • Display Ads

Using Organic Search To Generate Leads

Organic search refers to people searching for and finding your product online through using search engines.

This kind of inbound lead generation traffic is called organic traffic because you don’t pay for it.

To drive organic traffic to your sales funnel, your content must be easily discoverable on search engines.

To do this, you must leverage search engine optimization (SEO) best practices. The most important include:

  • Using keywords in your content
  • Incorporating search/user intent in your content
  • Building backlinks to your blog posts
  • Creating a positive user experience (UX) on your website

Applying these principles is paramount to ensuring many visitors at the TOFU stage of your funnel.

Using Social Media To Generate Leads

Social media has changed the way we connect and network around the world.

Whether it’s B2B or B2C, your audience will be using social media in one form or another.

Creating valuable, and entertainment content that speaks to your audience will attract followers, which in turn will check out your TOFU offer.


Step #7: Analyze the Data and Adjust Accordingly

Once you have enough data coming in, make sure to adjust your tactics accordingly to start optimizing for better results.

Leverage Data

Each step of the funnel is meant to help the user go to the next stage, so make sure to examine each stage and adjust accordingly.

Using the ad platform data in accordance with the Google Analytics data can show you where the users are dropping of.

Is it your ad?

Is it your landing page?

Identify Obstacles And Fix Them

Once you find the issue, it’s time to fix it.

If you ads are not performing well, try adding more creative variations, or changing up the copy.

If your landing page isn’t converting well, try changing the headline or the offer, or change your bullet points.

Data points to watch:

  • Ad Click-thru Rate
  • Landing Page Conversion Rate
  • Ad Conversion Rate


Your color, fonts, or logos are often the LAST things that need to be adjusted for better conversions.


Focus on the copy and offer first.

Segment — regularly

Segmentation is crucial to helping you create personalized and catered experiences.

Create different customer journeys for each of your segments.

It’s also advisable to regularly revisit your segmentation strategy to ensure they contain prospects with similar demographic and psychographic attributes.

Demographic segmentation is when an ad for a man ages 25-35 may not be the same as an ad for a woman 45-55.

Psychographic segmentation may be ad targeting entrepreneurs starting their own business and a different ad targeting working at home employees, even though it’s the same product.

More advanced segmentation include, but not limited to:

  • People who have clicked on an ad but did not convert.
  • People who watched 90% of a video ad but did not click on the ad.
  • People who have clicked on multiple ads but did not convert.

The possibilities are truly endless.

Step #8: Build a database and convert leads into customers

By now, you should have:

  • A clear understanding of your target audience
  • An irresistible lead magnet (prospect bait) for that audience
  • A squeeze page where your prospects can enter their information in exchange for the freebie.
  • A email sequence where you provide value and pitch your product or service after they receive the freebie.
  • A continuous flow of traffic (Fastest way is social media ads for Facebook and Instagram)

As your funnel gets filled up with your buyer persona, you will build a email list of leads.

This list is one of the most valuable assets in any business and it’s important to keep building it and continue with segmentation.

To help you keep track and organize your leads, you need a good CRM (customer relationship management) tool.

This will help you:

  • Segment your list
  • Lead scoring (qualify leads)
  • Manage your sales pipeline (and leads) from a central dashboard
  • Streamline the sales process

Don’t Forget The Big Picture

Sales are the lifeblood of any business.

Lead generation is a crucial process for EVERY businesses.

Without it, its impossible to make sales.

Never leave it to chance – don’t gamble on your business.

So take the time to build a lead generation funnel.

It may take a while to get it right. But once you do, you will be able to put lead generation on autopilot.

And you will never look back.

If you need help with building a lead generation funnel, Russell Brunson has a FREE 5 Day Lead Challenge program.

He will help you with building your first lead gen funnel step-by-step.

Join The FREE 5 Day Lead Challenge

Tim Zhang

Tim Zhang

Founder. SEO. PPC. Digital Warrior.

Ex-Real Estate Agent, Sometimes Actor, Digital Marketing Consultant. All things business, marketing, mindset, and making money online in the digital millennium. PPC, SEO, Funnels, Traffic, and Digital Domination. Founder of