Demand Waterfall
The Demand Waterfall is a framework used in marketing and sales processes to illustrate the various stages a prospective customer goes through before becoming a final customer. This concept is widely used in B2B (business-to-business) marketing to visualize and effectively manage the process from lead generation to final sales.
Stages of the Demand Waterfall
The Demand Waterfall consists of multiple stages, where leads are evaluated and moved to the next stage based on certain criteria. The common stages include:
Inquiry:
The initial contact made by a potential customer. This occurs through advertisements, websites, trade shows, etc.
Marketing Qualified Lead (MQL):
A lead identified through marketing efforts as having the potential to make a purchase. This is usually determined by specific actions taken by the lead (e.g., attending a webinar, downloading a white paper).
Sales Qualified Lead (SQL):
A lead that has been further evaluated by the sales team and deemed worthy of moving forward with a concrete sales discussion. These leads typically have identified needs, budgets, and decision-making authority.
Sales Accepted Lead (SAL):
A lead that has been formally accepted by the sales team, marking the beginning of targeted sales activities.
Opportunity:
A lead where concrete sales discussions have begun, and proposals or quotes are in progress. The purchase decision is imminent.
Closed Business:
The final stage where a contract is signed, and revenue is generated.
Importance of the Demand Waterfall
Process Visualization:
Clearly identifies the stage of each lead, allowing for effective management of the overall process.
Performance Evaluation:
Evaluates conversion rates and performance at each stage, enabling measurement of marketing and sales effectiveness and identification of improvement areas.
Resource Optimization:
Functions as a basis for optimizing resource allocation, supporting efficient work by sales and marketing teams.
Deeper Customer Understanding:
Identifies where customers drop off in the process, providing insights into customer needs and behaviors and allowing for better strategies to address them.
Implementing the Demand Waterfall
Setting Clear Criteria:
Establish clear criteria for moving leads through each stage to standardize lead evaluation.
Using Systems and Tools:
Utilize CRM (Customer Relationship Management) systems and marketing automation tools for lead management and tracking.
Regular Reviews:
Conduct regular performance reviews of each stage to identify and implement process improvements.
Enhancing Team Collaboration:
Strengthen collaboration between marketing and sales teams to ensure smooth lead transitions.
The Demand Waterfall is an essential framework for success in B2B marketing and sales, serving as a powerful tool for efficient lead management.