Beyond Measurement Advanced Demand Waterfall Use Cases PDF

Beyond Measurement:
Advanced Demand
Waterfall® Use Cases
Jason Hekl Terry Flaherty

Vice President Sr. Research Director
14 May 2015
Today’s Session: Flexing Your Waterfall Muscles
© 2015 SiriusDecisions. All Rights Reserved 2

Executive Summary
•  Key issues
•  Too few organizations have utilized the Demand Waterfall® beyond functional
alignment, process definition and basic measurement
•  Advanced Demand Waterfall applications require the addition of new data
elements, collection strategies and analysis methodologies
•  Aggregate Demand Waterfall reporting masks insights and diagnostics that can be
applied to optimize and improve marketing and sales programs
•  What you will walk away with
•  An understanding of the value of advanced use cases for both marketing and sales
•  Insight into data collection and analysis methodologies needed for these use cases
•  Strategies to diagnose investments in marketing and sales programs

Aligning Waterfall Analysis With Insights and Actions
SiriusPerspective: With the right data and process foundation, the Waterfall can be
used to analyze historical performance, diagnose issues and predict future success.
Inquiry
Inbound Outbound
Performance Measurement
Marketing Qualification
Automation Qualified Leads (AQLs)
Teleprospecting Accepted Leads (TALs)
Teleprospecting Teleprospecting Generated

Process Diagnostics
Qualified Leads (TQLs) Leads (TGLs)
Sales Qualification
Sales Generated Leads

(SGLs)
Sales Accepted
Leads (SALs)
Revenue Forecasting
Sales Qualified Leads (SQLs)
Close
Won Business
Demand Planning

Aligning Waterfall Analysis With Insights and Actions
SiriusPerspective: With the right data and process foundation, the Waterfall can be
used to analyze historical performance, diagnose issues and predict future success.
Inquiry
Inbound Outbound
Additional Data Elements Performance Measurement

Demand Waterfall Views

Teleprospecting Teleprospecting Generated
Process Diagnostics
Qualified Leads (TQLs) Leads (TGLs)
Sales Qualification
Demand Waterfall Metrics

Sales Generated Leads
(SGLs)
Sales Accepted
Leads (SALs)
Revenue Forecasting
Close
Context Filters Demand Planning
Won Business

Foundational Building Blocks for Advanced
Demand Waterfall Use Cases
What your organization needs to get started
Waterfall Analysis Data: It’s All About the Arrival
SiriusPerspective: Understanding a lead’s current Waterfall stage and the path it took is
critical for measuring the efficiency and effectiveness of this process.
Stage Arrival Date

INQ 2/7/15
AQL 3/11/15
TAL 3/11/15
TQL 3/21/15
SAL 3/23/15
SQL 4/23/15
C/W

Waterfall Analysis Views: Supporting Business Insight
SiriusPerspective: When analyzing Demand Waterfall performance, create and leverage
multiple views into the Waterfall data based on different business contexts.
Current Stage Passport

Identifies Current Captures the Path
Stage in Waterfall Through the Demand
Waterfall

Waterfall Analysis Metrics: Required for Actionable Insight
SiriusPerspective: Waterfall-specific data fields – combined with analysis views – enable
the creation of key metrics required for advanced Waterfall use cases.
Volume Conversion Rate Velocity

What do I currently How efficiently are How fast are leads
have in each stage of leads converting moving through the
the Waterfall? through Waterfall Waterfall?
stages?

Waterfall Context Filters: Telling the Right Story
SiriusPerspective: When measuring Waterfall performance, profile and origination
filters ensure that the Waterfall is measured in the correct context.
Lead Origination Audience Profile

Filters
Business Geographies Customer
Units Types
Data filters
Filters
provide
Aggregate context
Campaign Creation
Date

Polling Question
•  How would you rate the maturity of your organization’s current

Waterfall data collection and analysis methodology?
•  Beginner
•  Intermediate
•  Advanced
•  Best practice

Advanced Waterfall Use Cases
Key questions, implementation guidelines and example
scenarios
Advanced Performance Measurement: Three Key Questions
SiriusPerspective: Focus on operational alignment and business context to utilize the
Demand Waterfall as a performance management tool.
How can the Waterfall be leveraged to analyze

demand program and tactic performance?
How do I leverage the same Waterfall constructs

to measure significantly different sales and
marketing situations?
How do I isolate lead handoff process issues from

design and execution issue?

Advanced Performance Measurement: How It’s Done
SiriusPerspective: Waterfall measurements must be disaggregated to conduct
meaningful analysis of the programs and processes contributing to current performance.
Step Step Step Step Step

1 2 3 4 5
Define Isolate Build Convene Diagnose

Waterfalls Cohorts Dashboards Council Problems

Advanced Performance Measurement Examples
Revenue
Define
Requirement
Waterfalls
Step 2
Waterfall
measurement starts
Step 3 with defining the
right context for
Step 4 analysis; multiple
Waterfall views may
be necessary
Step 5 US and CAN Nordics China

•  TBD
Revenue
Define
Requirement
Waterfalls
Isolate
Cohorts Campaign Campaign
#1 #2
Out of
Campaign
Campaign Campaign
#1 #2
Out of
Campaign With Waterfalls
defined, isolate
Step 3 Volume
(1000s) 24.9 19.1 8.8 1.4
3.2 1.1
2.8 0.7
3.1 cohorts by lead
Throughput origination filters
1.1% 3.7% 1.9% 3.6%
1.3% 3.1%
1.4% 2.6%
2.2%
Step 4
(INQ – C/W)
and analyze for
Velocity
64 61 69 76
88 79
85 84
90
volume, conversion
(# Days)
and velocity
CPL
Step 5 (USD)
$880 $914 $715 $1,080
$830 $990
$745 $685
$590

Revenue
Define Campaign Campaign Non-
Requirement
Waterfalls #1 #2 Campaign
Isolate 24,900 19,100 8,800 Volume

INQ
Cohorts 6.0% 9 13.7% 5 7.5% 7 Conv% Velocity Operationalize

measurements into
1,494 2,617 660
MQL
Build management
Dashboards 65.5% 15 90.0% 15 90.0% 20 dashboards, giving
visibility into both
979 2,355 594
SQL
Step 4 program
28.0% 40 30.0% 41 28.0% 42 performance and
274 707 166 Deals Won effectiveness of lead
WON
Step 5 management
$30.1M 64 $69.9M 61 $14.1M 69 Value Cycle
processes
Revenue
Define
Requirement
Waterfalls |-----------------SLAs IN COMPLIANCE---------------|
Isolate AQLs TALs Engaged in Engaged in Engaged in SLA

Sent Accepted 8 hrs. 8-24 hrs. 24-48 hrs. adherence Operationalize
Cohorts
40,392 40,392 3,231 19,792 9,694 32,718 measurements into
Build [85%] [8%] [49%] [24%] [81%]
management
Dashboards |------------SLAs OUT OF COMPLIANCE-----------|
dashboards, giving
visibility into both
Engaged in Engaged in Engaged in SLA not
Step 4 48-72 hrs. 72-96 hrs. 96+ hrs. adhered to
program
performance and
2,424 2,020 3,231 7,674
[6%] [5%] [8%] [19%]
effectiveness of lead
Step 5 management
processes
Revenue
Define
Requirement
Waterfalls
Inquiry
Isolate
Inbound Outbound
Reinforce functional
Cohorts
Teleprospecting
Qualified Leads (TQLs)
Teleprospecting Generated
Leads (TGLs) daily management
Build Sales Qualification
Sales Generated Leads Sales Accepted

with a cross-
Dashboards functional lead
(SGLs) Leads (SALs)
Close
management council
Convene
Won Business
that meets
Council periodically to
review and optimize
Step 5 programs and
processes
Revenue
Define
Requirement
Waterfalls 1 Make Observations (Pattern Analysis)
Isolate
Cohorts 2 Ask Why Ongoing
optimization
Build
Dashboards 3 Form Hypotheses requires a diagnostic
approach to
Convene identifying and
4 Test Hypotheses address
Council
underperforming
Diagnose 5 Analyze Findings and Act programs and
Problems processes

Advanced Waterfall Diagnostics: Three Key Questions
SiriusPerspective: Waterfall diagnostics leveraging performance patterns can identify
critical breaking points in the lead management process that impact demand creation.
Which lead management subprocess(es) are

restricting revenue growth?
What are the likely factors contributing to

this underperformance?
What are the appropriate best practices to

resolve this issue?
Advanced Waterfall Diagnostics: How It’s Done
SiriusPerspective: Waterfall diagnostics methodology leverages performance patterns,
hypothesis maps and assessments to identify and resolve lead management issues.

1 2 3 4 5
Identify Evaluate Assess Prove Take

Patterns Hypotheses Processes Hypotheses Action

Advanced Waterfall Diagnostics Example
hypothesis maps and supporting data to identify and improve lead management issues.
Revenue
Identify 0.38% B 0.65%
Requirement
Patterns Acme Peers
Total Waterfall Efficiency
(INQ – Won)
Step 2
5.7% B 10.7% 6.8% A 6.1%
Step 3 Marketing Function
(INQ – TQL)
Sales Function
(TQL – Won)
The ABAA pattern
identifies a likely
break point in the
Step 4 AQL-to-TQL
57.0% A 54.0% 9.9% B 19.8% 31.0% A 29.1% 22.0% A 21.0%
conversion process
Automation
Qualification Tele Qualification Sales Qualification Sales Close
Step 5 (INQ – AQL) (AQL – TQL) (TQL – SQL) (SQL – Won)

Advanced Waterfall Diagnostics Example
Revenue
Identify AQLs do not meet tele’s profile fit
expectations
Requirement
Patterns Input (AQL)
AQLs sent to tele prematurely
Evaluate
Hypotheses Broken service-level agreements
Telequalification skills/enablement
Step 3 AQL TQL In-Process
gaps The hypothesis map
Messaging delivered by tele is not
for the ABAA pattern
xBxx resonating identifies possible
Step 4 Solution not addressing market reasons for under-
needs
performance
Step 5 Output (TQL) Over-qualification of TQL

Advanced Waterfall Diagnostics
Revenue
Identify Are broken service-level agreements with teleservices an issue
for our organization?
Requirement
Patterns 1 2 3 4 5
Evaluate
Definitely Probably Possibly Not Likely No
Hypotheses
Define
No consensus on lead Documented and adopted

definition lead definitions by segments
Assess Clear rules for followup types

Assessments
Engage
No rules for number of

Processes followup attempts
and volume optimized by
yield curve analysis compare current
process
Step 4
No timeframe for
Timing
acceptance, engagement or
Clear rules for acceptance,
engagement or lead timeouts
performance to
lead timeouts
best practices
Enforce
Step 5 No enforcement of SLA rules SLA compliance key part of

management culture

Revenue
Identify Teleprospecting Key Metrics
Requirement
Patterns Activity
Unworked Lead % 27%
Evaluate
Hypotheses Initial-Touch Timing Compliance 57%
Assess Average Touch Attempts (SLA=8) 1.4

Processes Average Outbound Calls/Day 38 Both service-level
and call quality
Prove Quality issues are impacting
Hypotheses % Calls With Live Interaction 8% conversion efficiency
% Calls That Make Progress 5%
Step 5
Average Call Quality Score 3.2

Revenue
Identify
Requirement
Patterns
Form SLA Governance Teleservices
Hypotheses
Assess •  Notifications •  Call Scoring
Processes •  Escalation •  Sales Alignment
Prove •  Yield Analysis •  Culture
Hypotheses
Take
Action
Revenue Forecasting: Three Key Questions
SiriusPerspective: Understanding the expected future revenue value of your current
Demand Waterfall provides opportunities to prevent revenue shortfalls.
What is the expected value of my current

Demand Waterfall volume over time?
Does this expected value support our

revenue goals?
If there is a projected gap, what can be done

to recover and close the revenue gap?
Advanced Revenue Forecasting: How It’s Done
SiriusPerspective: Demand Waterfall revenue forecasting leverages conversion,
velocity and current volume metrics to identify and prevent future revenue shortfalls.

1 2 3 4 5
Analyze Forecast Forecast Identify Adjust

Volume Value Timing Gaps Plan

Advanced Revenue Forecast Example
Revenue
Analyze Current Waterfall Stage Volume
Requirement
Volume Current
Volume
Step 2
INQ 6,215
AQL 171
Step 3 TAL 569
Validate that current
stage volume
TQL 34
reflects active
Step 4 SAL 54 engagement and
SQL 3,568 buying cycles
Step 5

Revenue
Analyze Current Waterfall Stage Volume
Requirement
Volume Current Current Net Estimated Estimated
Volume Conversion Conversion Close/Won Revenue
Forecast to C/W
Value INQ 6,215 54% 0.30% 19 $2,595,293
AQL 171 83% 0.55% 1 $132,508

Net conversion rates
Step 3 TAL 569 12% 0.67% 4 $530,012 applied to active
TQL 34 79% 5.55% 2 $26,5006 current volume
predicts the
Step 4 SAL 54 39% 7.02% 4 $530,012
expected value from
SQL 68 18% 18% 12 $1,722,540
each stage
Step 5 ASP $140,000
Expected
$5,775,367
Revenue

Revenue
Analyze Expected Timing of Waterfall Revenue
Requirement
Volume Avg. Days at Avg. Days to Quarter Estimated
Stage Close Impact Revenue
Forecast
Value INQ 40 221 3 $2,595,293
AQL 14 181 3 $132,503

Forecast Waterfall stage
Timing TAL 27 167 2 $530,012 velocity metrics can
$265,006
be leveraged to
TQL 12 140 2
forecast likely
Step 4 $530,012
SAL 68 128 2 revenue impact by
SQL 60 60 1 $1,722,504 stage and quarter
Step 5 $5,775,367

SiriusPerspective: Demand Waterfall revenue forecasting leverages conversion, velocity
and current volume metrics to identify and prevent future revenue shortfalls.
Revenue
Analyze Quarterly Expected Revenue Against Goals
Requirement
Volume $3,000,000
Forecast $2,500,000
Value $2,000,000
In this scenario, we
Revenue
Forecast $1,500,000 face an expected

Timing $1,000,000
shortfall in Q2, a
potential surplus in
Identify $500,000 Q3 and a total future
Gaps $0 value coverage of
Q1 Q2 Q3 96% ($5.78M on $6M
Expected Revenue $1,722,540 $1,325,031 $2,727,797
Step 5 goal)
Revenue Goal $1,500,000 $2,000,000 $2,500,000

SiriusPerspective: Demand Waterfall revenue forecasting leverages conversion, velocity
and current volume metrics to identify and prevent future revenue shortfalls.
Revenue
Analyze
Requirement
Volume
Service-Level
Forecast Acceleration Management
Value
•  Passive Recycle •  Sales Handoff
Forecast Nurtures •  Compliance
Timing
•  Pipeline •  Culture
Identify Acceleration
Gaps •  Economic Value
Tools
Adjust
Plan
Demand Planning: Three Key Questions
SiriusPerspective: Demand planning provides critical insight into both the Waterfall
efficiency and volumes required to meet future revenue goals.
What does the future Waterfall need to look

like to meet our long-term revenue goals?
Will our planned programs and budget drive

the required Waterfall volume, velocity and
efficiency?
What changes to plan and budget should we

make to meet our goals?
Demand Planning: How It’s Done
SiriusPerspective: Effective demand planning is an iterative process used to optimize
program types and budgets to reach future revenue goals.

1 2 3 4 5
Set Reverse Align Evaluate Finalize

Goal Waterfall Campaigns Scenarios Plan

Demand Planning Example
SiriusPerspective: Demand planning should include investments in more than
acquisition programs to optimize revenue performance.
Revenue
Set Demand Planning for FY2016
Requirement
Goal Revenue
Total Revenue $28,000,000

Step 2
Marketing Sourced % 25%
Step 3 Marketing Sourced Revenue $7,000,000

Marketing’s target
represents 25% of
total revenue with
Step 4 Budget
an $840K budget
Acquisition Programs $840,000
Step 5

Revenue
Set Waterfall Analysis
Requirement
Goal Revenue Goal $7,000,000 Deal Size $40,000
Reverse
Conversion Conversion Required
Waterfall Point Rate
Stage
Waterfall
INQ to AQL 54% INQ 16,763
Leveraging
Step 3 AQL to TAL 83% AQL 9,052 current Waterfall
TAL to TQL 12% TAL 7,513 conversions, 16,763
inquiries are
Step 4 TQL to SAL 79% TQL 902
required to reach
SAL to SQL 39% SAL 71,216
the revenue goal
Step 5 SQL to C/W 18% SQL 278
Plan C/W 50

Revenue
Set Budget Analysis
Requirement
Goal Current Plan
Blended Cost per Inquiry $60
Reverse Inquiries Required 16,763
Waterfall
Budget Allocation
Align The available budget
Acquisition $1,005,782
Campaigns will not fund the
Nurture inquiry volume
Enablement required at current
Step 4
Total Budget $1,005,782 conversion rates and
Available Total Budget $840,000 execution plan
Step 5 Budget Gap ($165,782)

Revenue
Set Waterfall Scenario Analysis
Requirement
Goal Revenue Goal $7,000,000 Deal Size $40,000
Reverse Current Improved Stage Required Improved

Waterfall Conversion Conversion Waterfall Waterfall
INQ to AQL 54% 54% INQ 16,763 10,934

Align
AQL to TAL 83% 83% AQL 9,052 5,905 Implementing
Campaigns nurture programs,
TAL to TQL 12% 15% TAL 7,513 4,901
Evaluate enablement and SLA
TQL to SAL 79% 79% TQL 902 735
governance
Scenarios SAL to SQL 39% 41% SAL 71,216 581 improves conversion
SQL to C/W 18% 21% SQL 278 238
Step 5
C/W 50 50

Revenue
Set Budget Analysis
Requirement
Goal Current Plan Improved Plan
Blended Cost per Inquiry $60 $60
Reverse Inquiries Required 16,763 10,934
Waterfall
Budget Allocation Changing
Align
Acquisition $1,005,782 $656,036 investments to mid-
Campaigns stage and late-
Nurture $100,000
Evaluate Waterfall programs
Enablement $75,000
enables us to meet
Scenarios Total Budget $1,005,782 $831,036
revenue goals with
Finalize Available Total Budget $840,000 $840,000 existing budgets
Plan Budget Gap ($165,782) $8,964

Polling Question
•  Which Waterfall use case do you think will add the most value for
your organization moving forward?
•  Performance management
•  Waterfall diagnostics
•  Revenue forecasting
•  Demand planning

•  Marketing
Action
•  Ensure that the necessary data elements, views metrics
Items and filters are in place to support advanced use cases
•  Leverage the Demand Waterfall as a strategic platform to
drive change in operations and planning
•  Sales
•  Champion governance of standardization in the lead
management process to support Waterfall data collection
•  Incorporate recurring Waterfall review meetings to
increase attention on early-stage opportunities
•  Product
•  Determine how the Demand Waterfall can be used to
model demand creation objectives by offering
•  Consider Waterfall use cases that yield important insights
into product demand and sales effectiveness
Recommended •  Core Strategy Report: Waterfall Performance Patterns
•  Core Strategy Report: Advanced Demand Waterfall Analysis
Research
•  Core Strategy Report: The Demand Waterfall Through a
Process Lens
•  The Demand Waterfall, Rearchitected
•  Identifying Signals of Qualification Issues Within the Lead
Management Process
•  The Cascading Effects of the Demand Waterfall
•  Core Strategy Report: The SiriusDecisions Demand Waterfall
Implementation Guide
•  Demand Waterfall Stage Velocity
•  Demand Waterfall Velocity: Prerequisites
•  Reversing the Rearchitected Waterfall
•  Driving Process Efficiency in Lead Management

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Beyond Measurement:

Jason Hekl Terry Flaherty

© 2015 SiriusDecisions. All Rights Reserved 2

© 2015 SiriusDecisions. All Rights Reserved 3

Automation Qualified Leads (AQLs)

Teleprospecting Accepted Leads (TALs)

Teleprospecting Teleprospecting Generated

Sales Generated Leads

© 2015 SiriusDecisions. All Rights Reserved 4

Additional Data Elements Performance Measurement

Automation Qualified Leads (AQLs)

Teleprospecting Accepted Leads (TALs)

Demand Waterfall Views

Demand Waterfall Metrics

© 2015 SiriusDecisions. All Rights Reserved 5

Stage Arrival Date

© 2015 SiriusDecisions. All Rights Reserved 7

Current Stage Passport

© 2015 SiriusDecisions. All Rights Reserved 8

Volume Conversion Rate Velocity

© 2015 SiriusDecisions. All Rights Reserved 9

Lead Origination Audience Proﬁle

© 2015 SiriusDecisions. All Rights Reserved 10

• How would you rate the maturity of your organization’s current

© 2015 SiriusDecisions. All Rights Reserved 11

How can the Waterfall be leveraged to analyze

How do I leverage the same Waterfall constructs

How do I isolate lead handoﬀ process issues from

© 2015 SiriusDecisions. All Rights Reserved 13

Step Step Step Step Step

Deﬁne Isolate Build Convene Diagnose

© 2015 SiriusDecisions. All Rights Reserved 14

© 2015 SiriusDecisions. All Rights Reserved 15

© 2015 SiriusDecisions. All Rights Reserved 16

Isolate 24,900 19,100 8,800 Volume

Cohorts 6.0% 9 13.7% 5 7.5% 7 Conv% Velocity Operationalize

Isolate AQLs TALs Engaged in Engaged in Engaged in SLA

Teleprospecting Accepted Leads (TALs)

Sales Generated Leads Sales Accepted

Sales Qualified Leads (SQLs)

© 2015 SiriusDecisions. All Rights Reserved 20

Which lead management subprocess(es) are

What are the likely factors contributing to

What are the appropriate best practices to

Step Step Step Step Step

Identify Evaluate Assess Prove Take

© 2015 SiriusDecisions. All Rights Reserved 22

© 2015 SiriusDecisions. All Rights Reserved 23

Step 5 Output (TQL) Over-qualiﬁcation of TQL

© 2015 SiriusDecisions. All Rights Reserved 24

No consensus on lead Documented and adopted

Assess Clear rules for followup types

No rules for number of

Step 5 No enforcement of SLA rules SLA compliance key part of

© 2015 SiriusDecisions. All Rights Reserved 25

Assess Average Touch Attempts (SLA=8) 1.4

© 2015 SiriusDecisions. All Rights Reserved 26

What is the expected value of my current

Does this expected value support our

If there is a projected gap, what can be done

Step Step Step Step Step

Analyze Forecast Forecast Identify Adjust

© 2015 SiriusDecisions. All Rights Reserved 29

•  How would you rate the maturity of your organization’s current