Demand Waterfall: 8 Ways to Optimize Your Sales Cycle
Recently, we welcomed Devin Ragghianti, Vice President of Program Management at Liongard, to our Facebook Live Chat on demand waterfall. Joined by Axcient’s Director of Growth Operations, Matt Hemingway, the two discussed why demand waterfall is so pivotal for sales and marketing success. Moderated by Corey Banner, Director of Customer Success at Axcient, the half-hour discussion provided a lot of actionable takeaways you can put into practice immediately.
What is Demand Waterfall?
The SiriusDecisions Demand Waterfall® is a popular and widely adopted modular, B2B framework introduced in 2006. Designed to better align marketing and sales, the framework uses a standard set of terms and definitions to describe key stages in the lead management process. The waterfall helps businesses understand the efficiency of their sales cycle using data analysis, in order to accomplish sales goals.
The big question that demand waterfall answers is, what efforts will deliver the most return on investment (ROI) for your activity and time? Segmenting your sales cycle into the agreed upon stages lets you see how each stage influences the next. For example, how much pipeline do you need to bring in new business and how many leads do you need? What can be automated and what requires manual input? How does a free trial compare to a demo?
Through the process, you gain insight into your capabilities, available and necessary resources, and the probability of realistically attaining your goals. A common scenario is a company believes a certain marketing activity, like trade shows, are successful because they bring in a lot of leads. However, after evaluating the process from trade show to conversion using demand waterfall, you find it takes two to three times longer to close, and has a 50% lower close rate than webinars. Obviously, you would reevaluate the investment in both and be better suited to make smart decisions adherent to your goals.
Now that you know what the framework is all about, the following eight tips came from our experts, Devin and Matt, to maximize the impact of your demand waterfall.
1. Know your sales cycle.
The first step to using demand waterfall is to have a clear and accurate picture of your sales cycle, including upsells, cross sells, and new sales. From there you can define your goals and inputs. What is the value you hope to achieve and how fast can you make it happen?
Once that’s established, work your way up the funnel. Slice and dice the data you have by customer size, product, lead origin, time in the sales cycle, or whatever makes sense for your goals. Focus on the data you have, as well as what you need to fill in the blanks.
2. Validate your data.
Too often, companies fall victim to stale data repetition. Someone will state a fact that may have been correct years ago, but hasn’t been validated for your current project. This goes for both the data you have, as well as the data you don’t have. Skewed or inaccurate data will disrupt the entire the demand waterfall, so make sure you’ve got the right information to make decisions.
3. Make your goals achievable.
Set your sales team up for success by ensuring you have the team necessary to accomplish the mission. Strike a balance between what the business needs, how long it takes to reach your ROI, and the flow of leads necessary for sales to do their jobs. Do you have enough sales reps? Is the lead flow large enough to hit established goals based on conversion rates? Invigorate your sales team with realistic expectations that maximize efficiency and keep them energized toward achievement.
4. Leverage the waterfall regularly.
The information revealed in your demand waterfall shouldn’t be siloed. Instead, use it regularly to help sales and marketing teams focus on the best opportunities available. Incorporate the data in weekly or monthly meetings to give everyone an idea of where their efforts are producing. Use it to motivate, reward, or change strategies, and bring the business together with standard measures of success.
5. Collaborate with marketing.
Remember, the demand waterfall is designed to better integrate sales and marketing – a pairing that often presents challenges. We’re all on the same team, with the same overall goals, and frankly, both departments need each other. Data requires context to produce value, and that comes from open discussions.
You may discover that some leads are being contacted too early in the sales cycle, and a drip campaign could move them closer to having that one-on-one sales interaction. Together, you can rate leads to constantly refine where resources should be directed for the biggest impact. Revisit the waterfall design and analysis to make sure everyone is aligned on where time and money is spent, and why. The result will certainly be in your business’s favor.
6. Listen to your sales reps.
Just as collaboration with marketing is important, so is hearing from the frontlines. The anecdotal and real life experiences of sales reps with your potential and current customers can lend meaning and context to data. Create a culture that invites and encourages sales reps to speak honestly about their ideas and unique knowledge. You might be surprised by what you hear.
7. Keep CRM fields simple.
Implementing demand waterfall doesn’t have to be hard, but it does require discipline and the ability to compromise. Setting up a customer relationship management (CRM) system with your operations and marketing teams involved, gives all departments the opportunity to see the data they need. However, first and foremost, it has to be simple to use and not hinder the sales reps using it. Otherwise, they will not use it, or worse, you could be acting on skewed data.
Don’t let analysis paralysis compromise selling. Choose the five most important data points between the three departments and make those fields required. Explain to your reps why these fields are important so they’re more apt to use them correctly. Additionally, figure out how to leverage automated inputs, which can also contain a lot of value. It can be a challenge to simplify data needs, but it will streamline data application for decision making.
8. You don’t need a fancy system.
Many managed service providers (MSPs) utilize a CRM system, but if it’s not in your budget, you can still get the benefits of demand waterfall. There are a range of CRM platforms available, so first evaluate the cost against the potential wins of having the data available. Regardless, both of experts said they still regularly use spreadsheets to make data actionable. So don’t be afraid to start by tracking data yourself. It may make the case to your business leaders on the value of investing in a CRM. After all, some data is better than no data.
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About the Author:
Liz Mellem // Technical Copywriter, Axcient
Liz Mellem has been a freelance copywriter for over three years in the technology, education, and alternative medicine industries. She produces content, sales collateral, and email marketing campaigns that contribute to digital marketing strategies for sales growth and brand awareness. In her free time, Liz enjoys reading, exploring Austin, and Netflix with her cat, Harlem.