OK, I admit it: it took me a long time to figure out what a “Demand Unit” Waterfall is.
When SiriusDecisions unveiled their latest model roughly 2 years ago, I was scratching my head.
At the time, my mental model was firmly set to care about the previous model they pushed for so long – you know, the one where we counted MQLs, SALs and SQLs – and I wasn’t quite ready for this new way of thinking. I resisted for as long as I could, until I finally had to concede that the new model was, in fact, helpful in pointing out the parts of B2B marketing where there was (and is) a lot of untapped value.
At its simplest the Demand Unit Waterfall model says that in B2B, the purchasing decision is made by a group of people who come together to solve a specific business problem. Jon Miller founded Engagio based off of this premise 2 years before the release of the new waterfall. In fact, you can see how closely SiriusDecisions and Engagio are aligned on this core idea in B2B.
Let’s look at simple example: let’s consider the case of a business deciding to buy more cybersecurity software.
And, in this example, let’s say that it’s our job to sell cybersecurity software to businesses.
How can the Demand Unit Waterfall help us sell more?
Targeted Personas, Buying Groups and Product Level Engagement
For one, it says that we should focus our Sales and Marketing efforts on the people who work in that business who will be responsible for making or influencing the purchasing decision (i.e., demand units).
This is a simple and obvious statement to make but difficult to do in practice because it means really knowing our customers (and potential customers) really well.
In our example, the business we’re trying to sell to probably recognized a specific vulnerability that it’s trying to secure. It’s our job to know who in that business cares about that specific vulnerability, and how best to secure it.
- Should we sell to the Security Analyst? Which one?
- Would the Chief Security Office care?
- Is this a technical problem that someone from IT care about?
- What about the compliance department?
Answering these questions means identifying the right Personas within that business, and how they work as a Buying Group to identify solutions to their problems.
Targeting and tailoring our communication to the right person within the account is a powerful way to stand out among the competition and gain trust in our market.
Executing on this vision with your Sales and Marketing teams requires you to have the following capabilities:
- Account Based Foundation: You can’t be account-based when your systems aren’t. Traditional marketing technologies are lead-based, and important information about accounts is spread across disparate systems. This is the foundation that holds everything up under the account.
- Visibility into Personas and Buying Groups: ABM requires a different a different way to look at and measure your Sales and Marketing efforts.
- Do you have the right people in your database? Where are the gaps?
- Are target accounts and buying groups aware of your company and its different solutions
- Do the right people and right accounts spend time with you? Where?
Once you know who the right people are in your accounts, we need to be able to understand when is the right time to sell a specific product.
It helps to know what’s top of mind for the buying group in your account: What is the urgent business problem they’re trying to solve, and how can we help them?
Which brings us to the third capability:
- Which of our products or services are the people in the target account buying group currently looking at?
Configurable Journeys (NEW)
Finally, this brings us to our newest capability: a way to track the Account’s progress by customizing and measuring the buying journey.
Journey analytics define how accounts move through defined stages toward intended outcomes, and give marketers metrics to manage their process with rigor. They service as leading indicators of impact on the way to closed-won revenue.
Traditional lead funnels confuse the transition from individual leads to account-based opportunities.
It’s unclear how to measure “lead to opportunity” conversion since leads are people but opportunities are attached to the account. Furthermore, if an opportunity is created at an account with one lead attached to it, what should happen to the journey for all the other people at the account?
This was one of the key shortcomings of the older SiriusDecisions Waterfalls models – and why the “demand unit” was created!
Account funnels measure customer acquisition, just like traditional demand generation. But they can also track other important stages, too, such as customer success and expansion.
Sales cares about closing accounts, not leads. With account funnels, Marketing does, too.
Though account funnel stages vary across different businesses, this simple framework is a starting point.
We can then iterate from there by adding more advanced stages like Recycled Accounts or Disqualified Accounts.
Different account types move through journeys differently. Some accounts move faster, some slower. Certain types convert better, others worse.
To unlock this insight, drill into journey metrics by account type.
- Territory and business segment: you need to know how balance and flow vary by territory and business segment, otherwise some sales reps will be “hungry” — for example, what if you need more MQAs in the Northeast?
- Source: inbound accounts usually convert faster than outbound ones.
- Company size: large enterprises may convert slower than small companies.
- Product: if MQAs for specific products convert faster than others, consider investing.
- Target vs non-target: targets aren’t thinking about you. Non-targets self select. Where do your efforts succeed and stall in each case?
- Industry: which verticals move best through the funnel?
- First engagement campaign: often, accounts that respond to inbound channels convert faster than outbound ones.
These insights enhance Marketing’s ability to plan and make investment decisions.
SiriusDecisions developed the Demand Unit Waterfall to move away from a purely leads-focused approach that demand gen offers, in favor of something more sophisticated, strategic, and reflective of the realities on the ground for B2B Sales and Marketing. It’s another manifestation of the move towards effective, personalized, targeted approach to focus on the right set of people and accounts for your business.