Lead Generation Funnel A Comprehensive Guide for Small Businesses


Small businesses have faced numerous challenges in recent years, especially with the sudden changes in consumer behavior and the economic landscape. From the rise of remote work to peak inflation rates, these shifts have significantly impacted small businesses and their ability to attract customers.

To navigate these changes successfully, small businesses must develop a robust lead generation strategy. By having a solid sales plan in place, businesses can adapt to evolving circumstances and adjust their strategies accordingly. In contrast, businesses that solely relied on foot traffic for customer acquisition would have to start from scratch if their traditional methods were disrupted.

In this article, we will share how our team at Funnelpreneurs.com has tackled lead generation. While every business will have different lead gen strategies, we hope that our journey will inspire and provide ideas to take your lead generation efforts to the next level.

What is a Lead Generation Funnel?

A lead generation funnel is a system or process that aims to attract potential customers and convert them into qualified leads. It is similar to fishing, where you identify the type of fish you want to catch, determine where to find them, select the right bait, and cast your line. However, it doesn’t end there. Once you get a bite, you need to employ techniques to hook and reel in the fish without losing it along the way.

The lead generation funnel consists of five main stages, which align with different parts of the funnel: awareness, interest, appraisal/desire, action/confirmation, and conversion. These stages correspond to the top-of-funnel (TOFU), mid-funnel (MOFU), and bottom-funnel (BOFU) stages, as illustrated in the diagram below.

Lead Generation Funnel Diagram

Awareness Stage

In the awareness stage, your goal is to capture the attention of potential buyers using a lead magnet. A lead magnet is something valuable that you offer in exchange for their contact information or engagement.

Interest Stage

The interest stage focuses on capitalizing on the attention you’ve garnered and demonstrating your company’s value. This is where you aim to generate interest in your brand and offerings.

Appraisal/Desire Stage

In the appraisal/desire stage, you direct the prospect’s interest towards a specific product or service that provides a unique benefit or solution. You want to make them desire what you have to offer.

Action/Confirmation Stage

The action/confirmation stage aims to convince the prospect to take action and make a purchase or commit to the desired action. It may involve providing additional incentives, overcoming objections, or addressing any concerns they may have.

Conversion Stage

The conversion stage is where you close the deal and make the sale. This is the final step in the lead generation funnel, where the prospect becomes a paying customer.

How to Build a Lead Generation Funnel

Now that we understand the different stages of the lead generation funnel, let’s delve into the step-by-step process we followed at Funnelpreneurs.com to increase sales and generate qualified leads.

1. Find Your Target Customers

The first step is to identify your target customers. At Funnelpreneurs.com, we provide copywriting and content services, and our long-term strategy involved building a network of loyal brand ambassadors, also known as affiliates. These affiliates would promote our services in exchange for a commission. To achieve this, we needed to reach out to the right people.

In our case, we wanted to target bloggers as potential brand ambassadors. We knew that bloggers often monetize their blogs through affiliate marketing once they generate a significant amount of traffic. After conducting keyword research and competitor analysis, we devised a strategy to create an in-depth blog post covering the best affiliate marketing programs for bloggers.

2. Create Great Content and Lead Magnets

We created the blog post and focused on providing valuable information to our target audience. Within a few months, the post started generating around 500 daily visits. Initially, we didn’t include our own affiliate program in the list to avoid appearing overly self-promotional. However, as we saw the value our content offered to readers, we added our program to the list.

The blog post not only generated traffic but also sign-ups. As shown in the image above, the post attracted 316 unique visitors, with 34 proceeding to the affiliate registration page. Eventually, 17 individuals registered—an impressive conversion rate of approximately 5.4% for a blog post.

Lead magnets play a crucial role in attracting prospects. These can be guides, offers, information, or entertainment that provide value to your target customers. Content is often an excellent lead magnet, as it can engage and educate your audience. Remember, it’s not enough to create content; it needs to be compelling and draw people in to generate leads.

3. Use CTAs to Drive Traffic Down the Funnel

Calls-to-action (CTAs) are essential in guiding prospects through the lead generation funnel. At Funnelpreneurs.com, we employed two types of CTAs to increase traction: sticky CTAs and exit CTAs.

Sticky CTAs are banners or buttons that remain visible as visitors scroll through a webpage. These CTAs are strategically placed to encourage sign-ups or other desired actions. In our case, the sticky CTA asked readers to sign up for our affiliate program. This unobtrusive banner generated a significant number of sign-ups.

Exit CTAs, on the other hand, are pop-ups that appear when a visitor is about to leave a website. These CTAs aim to capture email addresses and keep potential leads engaged. While some readers may find these pop-ups annoying, they have proven effective in capturing leads. Our exit intent pop-up alone generated over 700 email subscribers in just 12 months.

It’s important to note that different CTAs serve different goals. The sticky CTA targets prospects who are ready to move quickly through the funnel, while the exit CTA appeals to those who need more time in the interest phase. This brings us to the next tactic: email marketing.

4. Engage Leads with Email Marketing

Email marketing is a powerful tool for keeping leads engaged and nurturing their interest in your offerings. At Funnelpreneurs.com, we use ConvertKit to tag each subscriber based on the form they used to sign up. This allows us to segment our email list and send targeted content to specific groups of subscribers.

Once a subscriber joins our email list, they enter a specific email channel with a sequence of automated emails tailored to their interests. For example, if someone signs up through our affiliate marketing form, they will receive a welcome email with links to blog resources on affiliate marketing for beginners. This email serves as a soft introduction and provides value to the subscriber.

Two days later, we send a second email promoting specific affiliate programs, including our own. This sequence continues until the subscriber signs up for our program or takes the desired action. This personalized approach helps us nurture leads and increase the chances of conversion.

Tips for Optimizing Your Lead Generation Funnel

Now that you have built your lead generation funnel, here are some tips to optimize its performance:

  1. Qualify leads: Determine which leads are most likely to convert and allocate more resources to engage with them. For example, a lead that starts a free trial is more likely to be further down the funnel than a lead who simply clicks a CTA.

  2. Find tools that fit your workflow: Explore different lead generation tools available in the market that can help drive traffic, capture leads, and facilitate communication. For instance, if you need to schedule meetings with leads, choose software that integrates with your calendar and enables you to set up video calls.

  3. Use trial and error: Experiment with different strategies and lead funnels to find what resonates with your audience. Test various content types, adjust advertising efforts, and optimize landing pages to see what generates the best results.

  4. Learn from rejected leads: Analyze leads that did not convert by examining their source, level of engagement, and soliciting feedback to understand what went wrong. This information can help you refine your lead generation approach and address any weaknesses in the funnel.

  5. Maintain quick turnaround times on leads: Consider investing in lead management automation to ensure fast response times to inquiries and follow-ups. Promptly addressing leads can significantly impact conversion rates.

When automated correctly, a lead generation funnel acts as a virtual salesperson, consistently working to attract new clients while you focus on other aspects of your business. While you still need to create new lead magnets and funnel content regularly, an automated funnel can handle much of the tedious work and free up your time to concentrate on other critical tasks.


Developing an effective lead generation funnel is crucial for small businesses to navigate the challenges posed by changing consumer behavior. By following a well-defined process and implementing the strategies outlined in this guide, you can attract potential customers, nurture their interest, and convert them into qualified leads.

Remember, your lead generation funnel should be tailored to your specific business and target audience. Continuously monitor and optimize your funnel based on feedback and results to ensure maximum effectiveness. With the right approach and tools, you can build a robust lead generation system that drives growth and success for your small business.

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