The lead generation funnel represents the customer journey in three stages: top, middle, and bottom. Creating a successful funnel that allows businesses to track conversions and improve performance is essential for growth.
Follow the step-by-step guide for building a lead gen funnel that drives optimal outcomes.
Identify Your Lead Generation Funnel
The lead gen funnel is displayed as an inverted pyramid to reflect the decreasing number of leads you’ll have in each stage.
The definite goal of every funnel is to fill the sales pipeline by moving leads toward the purchase decision.
|The Lead Generation Funnel|
|The Top of the Funnel: Awareness|
|The Middle of the Funnel: Engagement|
|The Bottom of the Funnel: Purchase|
|Option #1: Retention / Option #2: Churn|
1. The Top of the Funnel
TOFU is the “brand awareness” stage where businesses must focus on capturing leads’ interest.
Consider these strategies to collect prospects’ contact info:
|Strategies||Inbound Lead Generation|
Outbound Lead Generation
Inbound lead gen refers to generating leads organically by drawing them to your products or services. Inbound activities are generally deployed by marketers, but your sales and marketing teams should work together to formulate the highest-impact inbound activities for converting leads.
Outbound lead gen refers to attracting customers through cold advertisements or outbound sales. Sales teams have a more direct impact on outbound lead generation.
- Paid ads can contribute to inbound or outbound lead generation strategies and are an immediate way to get your brand in front of potential buyers.
- Outbound sales, commonly referred to as appointment setting, is the most direct way to generate new leads.
Many businesses build SDR teams that are solely responsible for generating new leads via outbound cold calls and emails. Building internal SDR teams is resource-intensive, so it’s worth considering outsourced appointment setting to increase your cold-reaching volume and conversion success.
Tip: Your landing page is a critical touchpoint that impacts both inbound and outbound lead generation efforts as SDRs commonly include those links in their cold emails.
Optimizing the page with convincing call-to-actions such as “Start Learning Today” increases conversion success.
You can measure all types of lead generation strategies by measuring cost per lead (CPL) at the TOFU.
- CPL shows how much money it takes to generate a new lead for your business.
If you put $6K into an advertising campaign and capture 60 leads, your CPL would be $100 per lead.
$6K/ 60 = $100.
2. The Middle of the Funnel
MOFU is where you aim to convert prospects into sales opportunities. To qualify your leads, consider these strategies:
Social Media Channels
Omnichannel integration is a lead nurturing and user engagement strategy that integrates all online and offline touchpoints.
Connecting sales, marketing, and IT to create an omnichannel experience provides several benefits including increased conversions and an accelerated time-to-close.
Tip: Add a chat widget to your website for your sales team to interact with prospects who don’t want to fill out the contact form and want immediate communication.
Social media channels such as Twitter, LinkedIn, and Facebook nourish your lead gen funnel with engagement opportunities.
Sharing content demonstrating how you alleviate your prospects’ pain points boosts your conversion success.
Email marketing is a must-have strategy to share content such as webinars or case studies with leads on your contact list. The number of email accounts is 3,8 billion with a 100 million increase since 2018.
When compared to social media, email marketing is more direct because there is no platform algorithm moderating when your content is displayed.
Email marketing can be more effective than social media because:
- You control which lead gets what type of content.
- You can segment messages to increase engagement.
- You directly communicate with the interested prospects who have shared their contact info.
- You can personalize your offerings for better results.
Blog content is where you implement conversion points such as subscribing to a newsletter or downloading free offerings. You can use social media to retarget blog visitors who didn’t leave their contact info.
Focusing on the consistency and quality of your blog content is key to achieving better results.
By monitoring conversion rates by channel, you can measure the effectiveness of these strategies.
- The lead conversion rate shows how many visitors turn into leads.
If your sales and marketing teams drive 200 leads to your landing page and 50 of them fill the contact form, your lead conversion rate is 25%.
(50 / 200) x 100% = 25%
- You’ll want to measure your SDR inputs differently for outbound-driven lead gen funnels. You can calculate your SDR conversion rate by measuring how many appointments turn into opportunities.
If your SDR schedules 100 appointments and 50 of them turn into opportunities, your lead conversion rate from SDR outreach is 50%.
With these metrics, you can calculate conversion success and outline areas for improvement at the MOFU.
3. The Bottom of the Funnel
BOFU is where you convert sales opportunities into paying customers. Consider these strategies to move your leads to the purchase decision:
|Pricing Comparisons |
Case Studies / Testimonials
Pricing Comparisons: You can use pricing tactics to eliminate budget-related problems.
Pricing comparison allows customers to compare the price and value of your offers with others. Asking your marketing team to create a 1-sheeter comparing your product against your competitors is one way to let your SDRs and Account Executives (AEs) leverage pricing comparisons in their cold outreach.
Discount Offers: Applying a discount on your prices triggers leads to make a purchase and maintains your competitive advantage.
Consultations: Some qualified leads require more interaction with you over the phone or in person. Consultations are an effective way to share information and point your buyers toward the best solutions for their needs.
Case Studies / Testimonials: Sharing a proven track record of success encourages your qualified leads to finalize a purchase decision. Both your sales and marketing teams should leverage case studies wherever possible.
BOFU can also include psychological tactics to close sales. Some of them are:
- “Now or never” strategies refers to creating a sense of urgency through a special offer that is time limited. It can be something like: “We offer a 20% discount if you sign up today.”
- “Summary” is a method to highlight the value and benefits of your offer by summarizing the deal.
- “Probing” means asking prospects probing questions to ignite desire and eliminate possible objections. For example: “Do you think our offers solve your problems?” or “I want to ask how your organization is now dealing with [common problem] before we get into this feature”.
These tactics improve businesses’ chances of closing deals. To measure your success in conversion at the BOFU, you can calculate Customer Acquisition Cost (CAC) and Opportunity Conversion Rate.
- CAC is the cost of generating a paying customer.
Assuming your total cost is $50K on sales and $50K on marketing in a year and attracted 20 customers, your CAC would be:
($50K + $50K) / (20) = $5K.
- Opportunity Conversion Rate is the percentage of prospects converted into qualified leads with significant chances of closing.
If you have 500 leads and 60 of them converted into opportunities, your opportunity conversion rate is 12%.
(60 / 500) x 100% = 12%.
After the purchase decision happens, your paying customers face two options: retention or churn.
4. Retention or Churn
Retention refers to ensuring your customers’ loyalty to your product or service, while churn refers to your customers’ rejection of working with you in the future.
The goal is to keep your paying customers in your pocket, as a customer can generate recurring sales throughout the years.
- Both sales and marketing teams can nurture existing customers by generating consistent quality content to maintain long-lasting relationships and improve retention.
- Personalization means customizing your offerings based on your customer’s purchase history, shopping preference, and interest. SDRs and AEs are best positioned to share personalized offers and content as they have more information on prospects than marketing teams.
- Loyalty Programs provide your customers with points, rewards, or discounts for their purchases and boost your retention strategy.
To measure your success in retention, you can use the Customer Lifetime Value (CLV) metric.
- CLV calculates a customer’s total worth over the future relationship.
To calculate your CLV, identify the average purchase and lifespan per customer.
Assuming your average purchase is $210 with an average customer lifespan of 8 months, CLV would be:
$210 x 8 months= $1680.
Step-by-Step Building a Lead Gen Funnel Guide
Your success in lead generation is bound to how you set up your sales funnel. Here are the steps to set it up and the best tactics to boost it:
Step #1 Outline your buyer’s journey: The buyer’s journey is the road map of how your leads progress from solution-seeking visitors to paying customers. Identifying buying progress reveals your leads’ problems and informs how to approach them.
Boost it: While mapping your buyer’s journey, gather stakeholders from different departments to avoid missing out on a crucial step.
Step #2 Get familiar with your target audience: Spot your target audience’s problems to offer solutions. Knowing when, where, and how you can reach out to your leads increases the chance of closing sales.
Boost it: Create buyer personas and give them characteristics such as name and job title, interests, etc. based on your target audience to understand their needs and increase conversion.
Step #3 Choose your lead gen channels: Work together with the marketing team for inbound and outbound lead generation strategies such as paid ads, outbound sales, or omnichannel integration. Identify the best channels to fill your sales pipeline.
Boost it: Appointment setting is the most direct way to generate new leads and the function can be easily outsourced for an immediate lift to your lead gen efforts.
Step #4 Collect data and segment it: After collecting your prospects’ info, classify your audience to retarget based on segmentation variables.
Boost it: Some visitors convert into subscribers, but others only leave the page. Retarget these anonymous visitors to increase your conversion rate.
Step #5 Optimize your website: Website optimization has several adjustments such as good SEO practices, design process, plugins, speed, etc. Optimizing your website increases the engagement of contact forms, blog posts, and landing pages.
Boost it: Add convincing conversion points such as call-to-action (CTA) to your blog posts or landing pages can boost your conversion rate. Instead of using words that cause friction like “Buy!” and “Submit!”, choose effective statements like “Treat yourself today” or “Buy now and enjoy.”
Step #6 Engage with your leads: You can encourage your leads to convert by using email marketing, paid ads, webinars, consultations, events, or social media channels.
Boost it: Offer them solutions by sharing consistent quality content through the lead gen channels you identified as being most effective.
Step #7 Keep track of metrics: You can measure your progress, analyze it, and optimize your lead gen strategies. To push leads through your funnel, keep track of your metrics.
Boost it: Create a schedule to measure and analyze the KPIs at each stage of your funnel.
Step #8 Close the sale: Each qualified lead needs a different approach to close the sale. Understand your prospects’ problems to create value and urgency before they become unresponsive to your offerings.
Boost it: Social proof is a powerful tool that makes it easier for prospects to sign a deal with you. Offer them case studies, testimonials, and referrals.
Step #9 Implement a retention strategy: It’s important to keep your paying customers on your side. Don’t let them choose churn and work with your competitors.
Boost it: Offer them a loyalty program and take benefit of it.
Bottom Line: Know when to consider outsourcing
If you lack a marketing department to support your lead gen efforts or don’t have the internal skillsets to build an outbound sales team, consider outsourcing your lead gen efforts. Both sales and marketing agencies can accelerate the time it takes to generate high-quality leads.