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At SiriusDecisions: Assessing the revised Demand Waterfall

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San Diego—Last year marketing consultancy SiriusDecisions Inc. rolled out a major revision of its Demand Waterfall marketing effectiveness model with a new focus on sales-sourced leads and teleprospecting. Wednesday, at its annual sales and marketing summit here, SiriusDecisions presented an assessment of the model's first year in the field. “The reaction to the rearchitected waterfall was quite favorable, but a key issue remains: Most organizations continue to ignore the ability of the waterfall to indicate the cost and scalability of their demand engines,” said Jason Hekl, service director-demand creation strategies at SiriusDecisions. The SiriusDecisions Demand Waterfall provides a statistical analysis of lead qualification, as prospects move through the sales funnel from initial inquiries to marketing-qualified, sales-accepted and qualified leads, and eventually closed business. Analyzing the percentages of leads passed to each subsequent stage measured against industry best practices has been a key ingredient of SiriusDecisions' consultancy practice since 2006. The new model recognizes other influences on demand, including leads qualified by marketing automation programs; leads qualified or generated through teleprospecting; and leads generated by sales. In assessing its clients' practices with the new model, SiriusDecisions found that about 48% of company leads are coming from marketing automation systems, but too few leads are then being accepted by the teleprospecting team for further qualification. “It's at 81%, which is a little disappointing,” said Tony Jaros, SiriusDecisions' senior VP-research. “We had hoped to see it in the 90%-to-95% range.” Another issue to date has been a propensity of early adopters of the revised model to bypass teleprospecting and send leads qualified by marketing automation systems directly to sales. “We recommend that no more than 15% or less of leads for a complex sale go directly to sales,” Jaros said. “Bypassing teleprospecting is almost a sure way to assure you have significant lead waste in your waterfall. Watch out for this route-around rate creeping up over time; that's a warning sign of alignment trouble.” SiriusDecisions also pinpointed another alignment issue: Sales is qualifying about 48% of the leads it receives from marketing or teleprospecting, but is qualifying about 65% of the leads it generates itself. “Watch out for systematic behaviors that cause what sales and marketing generate to differ,” Hekl said. “It could mean that sales is holding on to leads from marketing and not entering them as opportunities,” he said. Attendance at SiriusDecisions' 2013 summit, running through Friday, is about 1,500, up from 1,105 last year. To accommodate the summit's continued growth, the company plans to move the event to Orlando, Fla., in 2014.
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