In 2006, SiriusDecisions introduced their revolutionary Demand Generation Waterfall, which defined the stages B2B orgs use to measure and optimize demand creation. As the market evolved, so too did the thinking about how to go to market. Inbound marketing was just taking off, and SiriusDecisions was among the first to recognize that sales can also generate leads, and first to stress the importance of teleprospecting. Thus, in 2012, SiriusDecisions re-architected their waterfall to acknowledge these changes.
Over the next five years, the market continued to evolve. With advancements in technology and shift in the way people buy, the way we qualify opportunities also changed. It became more important to focus on buying groups within an organization, and there was an imperative to shift from lead-centric to account-based thinking.
Hence, in 2017, SiriusDecisions revealed their new Demand Unit Waterfall at SiriusDecisions 2017 Summit. This seven-stage waterfall focuses heavily on the buying group in an account, which they have named the “demand unit.” Demand units, as defined by SiriusDecisions, are “buying groups with needs that fit the solution.”
If you’ve been following Engagio, you know that we’ve been preaching and practicing account-based thinking from day one (if you haven’t been following us, you can read more about our Account Based Marketing philosophies here). So, now that we have a brief history and broad understanding of the core concepts, we can dive further into the new Demand Unit Waterfall and how to implement it.
Introducing the SiriusDecisions’ New Demand Unit Waterfall®
You can learn more about SiriusDeicions’ Demand Unit Waterfall on their resource center, but we’ll quickly cover the basics from our perspective. Let’s start at the top.
- Target Demand – This your total addressable market (TAM) for your product or solution defined by firmographics, like size, industry, location, etc.
- Active Demand – Within your total addressable market, these are buying groups that you have good reason to believe are in need for your product.
- Engaged Demand – Someone that raises their hand to indicate interest in you, your content or your solutions. We call this stage Aware.
- Prioritized Demand – A buying group has reached a certain threshold of engagement further indicating an explicit need. We call this the Marketing Qualified Account (more on this in the next section).
- Qualified Demand – Through interactions with the buying group, you can confirm that there are resources, relationships, fit and urgency. This is typically done by an Account Development team.
- Pipeline – You can give an estimated closing date and dollar value to the opportunity.
- Close – You have successfully won the opportunity.
Again, I highly encourage you to talk to SiriusDecisions to get an in-depth explanation of their new waterfall.
How to Transition to the New Demand Model
“Don’t count the people you reach; reach the people that count.”
At a high level, that should all make sense. But how do you actually operationalize it and transform your key metrics to be account-based?
Companies are usually pretty good at measuring the Qualified Demand, Pipeline, and Closed stages, since those have always been account-focused. The Predictive Marketing companies (like EverString and Lattice) and Intent vendors (such as Bombora) can help you with measuring Target Demand and Active Demand — or you can do this yourself as part of your account selection process.
But to measure the earlier stages, especially Engaged Demand and Prioritized Demand, you need to put some foundational pieces in place. To implement the new model, you must:
- Connect all the leads in your system to the appropriate accounts
- Measure engagement at the account and persona / buying group level
- Redefine qualification and prioritization criteria using accounts or demand units
Connect leads to accounts
Start off with connecting leads in your system to the appropriate accounts. This allows you to view everything at the account level. In order to do this, you need Lead-to-Account Matching. Lead-to-account matching maps all leads in your CRM and marketing automation platform to their respective accounts so your information is clean, organized, and current.
If leads are not tied to accounts, you can’t begin to measure engagement of your most important accounts. Furthermore, leads get routed to the wrong account owner, leads don’t get scored and nurtured properly, and ultimately, the customer has a bad experience.
Lead-to-Account Matching also gets both sales and marketing speaking and thinking the same language – the language of accounts.
The next key piece is engagement, an idea core to account-based thinking, and one we’ve been championing from the beginning. It’s simple – before someone spends money with you, they first spend time, and the best measurement of time is in minutes. The more time they spend, the more interest, therefore the higher likelihood of buying. Engagement is the most meaningful metric to demonstrate interest within an account. I suspect that’s the reason SiriusDecisions’ new model puts such an emphasis on it.
However, not all engagement is created equal, which is you need the ability to measure specific types of engagement to operationalize the account funnel. In particular:
- People – Knowing exactly who (title, job level, department, etc.) has engaged with your company is a critically important. Would you treat an intern the same way you would treat an executive who has engaged with you? The whole idea of demand units is tracking engagement for different groups and personas.
- Actions – Visibility into specific actions taken by a target account is another key component. The action of requesting a demo deserves more attention than downloading a top-of-funnel whitepaper.
- Timeframe – “When” the account engagement takes place can be just as important as “how” much time is involved. You need to consider the specific timeframe engagement has happened at an account.
- Exclusions – Knowing who not to go after is just as important as knowing who to go after. Defining rules and filters for types of engagement that are excluded eliminate false positives, which in turn save your team time and energy. For example, partners or companies that don’t fit your account prospect criteria.
“A key part of the new account-based funnels is the ability to prioritize demand by scoring account engagement,”
-Jon Miller, founder and CEO of Engagio.
Redefine qualification criteria
Lastly, it’s time to redefine what it means to be “qualified.” In our view, this means you must replace Marketing Qualified Leads (MQLs) and Automation Qualified Leads (AQLs) with Marketing Qualified Accounts (MQAs). A Marketing Qualified Account is a target account (or discrete buying group) that has reached a sufficient level of engagement to indicate possible sales readiness, and it’s the essential way to prioritize demand in the new waterfall.
In traditional demand generation, companies used MQLs and AQLs to designate a lead deemed worthy to be handed off to sales. But in the new model, instead of relating to an individual person, they align to target accounts. While the MQL relates to one lead ready to go to sales, the MQA relates to one account ready to continue in the buying process.
“We have now seen the new account-based waterfall, and it’s clear to us that Engagio is the only platform that really supports it. The Engagio ABM platform was built from the ground up with the tools that are essential to implementing the new account-centric waterfall. My recommendation to anyone looking to operationalize these new ABM demand models is first to get Engagio.”
-Kristen Wendel, Director Marketing Operations for VersionOne
Change is accelerating faster than ever before. New technology and strategies demand a new buying process and new success metrics. If you want to keep up, you must adopt this new way of thinking.
Engaged Demand and Prioritized Demand are two stages of the new waterfall where teams are spending substantial time and energy. It takes a lot to get someone to raise their hand or respond to sales outreach to indicate interest. We’ve always put a heavy emphasis on measuring Awareness as one of they key metrics in account based approaches. Awareness asks: Are your target accounts and the buying groups aware of your company and its solutions?
Once the demand unit begins spending time with you, it’s imperative to track the type of engagement (i.e., the people, actions, and timeframe). Again, not all engagement is created equal! That’s why defining your Marketing Qualified Accounts is essential in operationalizing the new Demand Unit Waterfall and taking an account-based approach.
The transition won’t happen overnight, but it will pay off in the long run. Change the way you think and operate from lead-centric to account-based. Begin by tracking and optimizing for engagement at buying groups. Next, connect all the leads in your system to the appropriate accounts so that you have full visibility into your target accounts. Lastly, redefine what it means to be qualified. Consider the people in the buying group, the actions they take, and the timeframe of those actions. All of this gives you the ability to generate more demand and close more revenue.