Lead funnel: How to build it, definition, and stages

The saying “There are plenty of fish in the sea” doesn’t just apply to dating—it’s also true for sales. You might cast your line in a sea of prospects but fail to reel in any qualified leads or convert them to bookings.

By clearly defining your sales funnel and investing in a full-funnel tracking approach, you ensure that you’re not just fishing in the right pond but actively baiting and guiding potential customers through every stage of the buying process. Even for customer experience (CX) teams, understanding the lead funnel is crucial to anticipating and meeting needs at the right moments, making the transition from prospect to loyal customer as smooth as possible.

In our guide, we’ll walk you through the stages, structure, and best practices of a lead funnel so you can reel in prospects and nurture long-term relationships.

More in this guide:

• What is a lead funnel?
• Lead funnel stages
• How to build a lead generation funnel in 6 steps
• Types of lead funnels
• Lead funnel strategy best practices
• Frequently asked questions
• Manage your lead funnel with top-tier software

Lead funnel stages

The lead funnel is a fundamental part of the buyer’s journey and consists of three primary stages.

Stage 1: Top-funnel leads or awareness

No matter what type of customer you’re targeting, their journey to your company starts long before they know you exist. At this stage, customers learn about your brand for the first time, but they aren’t on the hunt for products yet—they’re on the hunt for solutions, so you need to ensure prospects are aware of your product or service when they want to make a decision.

Consider investing in prospecting tools to collect customer information at this stage so you can follow up with prospects at a later date. These early interactions are crucial for capturing attention, sparking curiosity, and igniting your lead generation efforts.

Stage 2: Middle-funnel leads or consideration

Once customers are aware of your offering, they enter the consideration phase. At this stage, leads and prospects know your product exists, evaluate how well it meets their needs, and consider it a possible solution to their problem.

The consideration stage is often the longest phase of the funnel. To nurture these middle-funnel leads across varying customer touchpoints:

• Maintain a steady but not overwhelming email campaign.

• Customize and personalize messages.

• Keep your interactions short and to the point.

• Research your leads before speaking to them.

• Provide access to case studies, product demos, and reviews.

The best thing you can do for a middle-funnel lead is build customer trust to encourage them to join you in the conversion stage.

Stage 3: Bottom-funnel leads or conversion

In the conversation stage, prospects are ready and have the means to make a purchase. Now that they’ve decided your product is the best fit for their needs, It’s your responsibility to make the customer acquisition process seamless by:

• Offering personalized customer service

• Meeting your customers where they are

Don’t stop investing in lead nurturing at this stage. Continue interacting with prospects, offering clear calls to action (CTAs), and removing barriers to encourage them to convert. And don’t forget that the lead funnel doesn’t stop here—ideally, your continued customer relations will encourage prospects to make an initial purchase, move through the sales funnel, become repeat customers, and morph into brand advocates and referrers.

How to build a lead generation funnel in 6 steps

There’s no one-size-fits-all approach to building a lead funnel, but here’s how you can build an efficient one in six steps:

1. Identify your target audience

The first step is identifying who your customers are and then learning about their customer pain points, preferences, and behaviors. Map their customer journey to understand what they need at each stage of the funnel. Then, you can use this data and market research to create a buyer persona to increase empathy and customer understanding.

2. Determine your must-have actions

Be specific about what actions you want your audience to take at each stage of the funnel, even though every prospect won’t follow an exact set of actions.

Know what you need to do to prompt these actions, and remember that not every prospect gets the same treatment. Personalization in marketing and active listening in sales are both essential to customer conversion, but prospects should take similar actions during their buyer journey.

3. Create valuable content

Creating valuable content is about more than just filling your website with words—it’s about providing your audience with the information, solutions, and inspiration they crave. Plus, creating captivating, high-quality content can help you establish yourself as an authority in your industry, building trust and credibility with your target audience and sales qualified leads (SQLs).

To capture your audience’s attention, create lead magnets like:

• Ebooks

• Webinars

• Infographics

• Quizzes

• Free trials or tools

• Templates

• Guides

• Cases studies

Strong lead magnet content can also increase your visibility and reach by attracting organic traffic to your website and improving search rankings. This means more potential customers can discover your brand and enter your lead funnel, building a sustainable and thriving online presence and lead nurturing strategy.

4. Build strong CTAs with distinct goals

Many prospects won’t move through the lead funnel alone—instead, they need CTAs, or strategic nudges, to guide them toward their next action. These CTAs should directly correlate with your business’s desired actions, like downloading an asset, signing up for a demo, or subscribing to a newsletter.

Strategically place CTAs throughout your funnel, from landing pages to email campaigns. Businesses can also use sticky CTAs to encourage prospects to take action no matter where they land on a page. CTAs should also be visually appealing and easy to spot, and they should stop prospects from wandering aimlessly around your content.

5. Prioritize sales pipeline management

Sales pipeline management tracks and organizes potential customers as they move through your sales journey. Effectively managing your leads in the sales pipeline is key to moving them from marketing to sales while identifying bottlenecks and optimizing your efforts to maximize conversions.

A well-organized sales pipeline helps you prioritize leads based on their potential value and engagement level, enabling you to allocate your resources efficiently while nurturing the most promising opportunities. While not all prospects will make it through the entire funnel on the first try, pipeline management allows you to track important factors like lead source and sales cycle length, providing valuable insights into your lead funnel’s health.

6. Monitor, analyze, and refine funnel

By monitoring key metrics such as lead conversions and prospect behavior, you can gain valuable insights into the performance of your funnel and your customers’ needs. Teams that generate and use lead or sales reports also stay up-to-date on sales volume, leads, and new accounts.

Regular analysis of your funnel’s performance can help you uncover bottlenecks, identify ineffective elements, and measure the impact of your marketing efforts. You can use lead scoring software to identify which leads are most likely to convert (and why), and you can invest in sales analytics software to analyze drop-off points and refine strategies to optimize future cycles. This iterative process ensures that your funnel remains aligned with your business goals and adapts to changing market conditions.

Types of lead funnels

Lead generation funnels, sales lead funnels, and sales pipelines are all distinct types of lead funnels that require unique approaches depending on your business goals. Below, we clarify the differences between these three funnel types.

Lead generation funnel

A lead generation funnel, or lead magnet funnel, focuses explicitly on prospective customers who have never purchased from your company. This funnel type attracts new leads through content marketing and lead magnet content designed to engage prospective customers. Successful lead generation funnels will move prospects into the sales lead funnel.

Sales lead funnel

Lead generation funnels and sales lead funnels have some overlap, but you can use sales lead funnels with new and repeat customers. Ideally, all prospects in the sales lead funnel are either current customers or qualified leads from the lead generation funnel. This type of funnel moves prospects through the decision-making process with targeted sales materials, product demos, and personalized outreach.

Sales pipeline

A sales pipeline uses more focused strategies than the other types of funnels. Building a sales pipeline requires businesses to create detailed sales strategies, negotiations, and personalized offers for individual prospects. In this funnel, businesses can invest in sales pipeline software to organize and automate the sales process.

Lead funnel strategy best practices

Just like any other aspect of sales, lead funnels come with their own set of strategies and proven best practices:

• Use AI and automation. Understand the role of AI in sales and leverage tools like Zendesk AI that help you qualify and verify leads more efficiently.
• Set clear goals. Whether it’s increased email clicks or doubling the number of demos requested, having sales goals at every funnel stage helps clarify what success looks like.
• Track your lead movements. Keep an eye on where your leads are in the funnel to improve your follow-ups. Then, invest in sales funnel software for simple communication and data tracking.
• Listen to your prospects. Customer feedback is key to refining your funnel and offering better experiences, so actively listen to their wants, needs, and expectations to show your care about them as people first.
• Know when to let leads go. Not every lead will convert, and it’s important to know when to focus on the next opportunity or refocus on those at the forefront.
• Learn from rejections. Ask for feedback, read negative reviews, and take customer criticism seriously to identify areas for improvement and specific adjustments to prioritize.
• Keep turnaround times quick. Promptly responding to inquiries can increase customer satisfaction and stop leads from going cold.

These practices provide a solid foundation for building a successful and sustainable lead funnel that serves your prospects and can help you achieve your business goals more efficiently.

Frequently asked questions

Manage your lead funnel with a modern sales CRM

The best thing you can do for your lead funnel is invest in powerful tools. Unified software solutions like Zendesk Sell can identify, nurture, and track prospects as they move through the lead funnel and generate regular funnel reports so you can identify and adjust areas for improvement in the moment. Zendesk can also help you automate lead management, eliminate confusion, and ensure seamless transitions between funnel stages. Plus, our sales CRM integrates with your service solution so you can connect your support and sales efforts to increase revenue.

Create better connections from awareness to purchase and improve lead management with a free Zendesk trial today.