By Matt Heinz, President of Heinz Marketing
Late in 2015 we started producing a radio program called Sales Pipeline Radio, which currently runs every Thursday at 11:30 a.m. Pacific. It’s just 30 minutes long, fast-paced and full of actionable advice, best practices and more for B2B sales & marketing professionals.
We’ve already featured some great guests and have a line up of awesome content and special guests coming up. Our very first guest was Funnelholic author and Topo co-founder Craig Rosenberg. Next we had Mike Weinberg, incredible writer, speaker, author, followed by Conrad Bayer, CEO & Founder of Tellwise. Recent Guests: Jim Keenan; Joanne Black; Aaron Ross; Josiane Feigon, Meagen Eisenberg, and Trish Bertuzzi.
We cover a wide range of topics, with a focus on sales development and inside sales priorities heading into and throughout the year. We’ll publish similar highlights here for upcoming episodes. You can listen to full recordings of past shows at SalesPipelineRadio.com and subscribe on iTunes.
About our guests:
- Why did SiriusDecisions update the demand waterfall?
- What’s a Demand Unit and why does it matter?
- What’s a Demand Map and what value does it deliver?
- What are the major changes/differences that Sirius introduced in this version of the waterfall?
- What has the reaction been to the new waterfall?
- What are some of the major things to consider when implementing the Demand Unit waterfall?
Matt Heinz: Thanks everyone for joining us today on Sales Pipeline Radio. Excited to have everyone with us again. As we are every Thursday at 2:30 Eastern/, 11:30 Pacific for those of you joining us at the live show. Appreciate you joining us, for those of you new, thanks for joining us. We feature sales and marketing experts in B2B every week in a conversation about what’s new, what’s working, what’s different, what’s not working in B2B sales and marketing and pipeline development.
You can always catch us on our podcast as well. We are on iTunes, as well as, Google Play, and you can catch every episode on demand at salespipelineradio.com. I am really excited today to be featured with two of the architects of the demand unit waterfall from SiriusDecisions. With us today are Terry Flaherty and Kerry Cunningham, who just two weeks ago debuted the new Demand Unit Waterfall on the stage at the SiriusDecisions summit in Las Vegas. Terry and Kerry, thanks so much for joining us today.
Kerry: Thanks for having us. I’m really excited to be here.
Matt Heinz: So, many of you listening are probably well aware of the SiriusDecisions Demand Waterfall. It first launched about 14 years ago. It’s interesting, I think a lot of people take for granted terms like sales qualified, lead marketing, qualified lead and the MQL acronyms. They’ve become really common nouns and common language in the B2B marketing world, and mostly I think B2B people don’t really realize it. You guys invented that. Those are creations of SiriusDecisions and really, you guys have pioneered that and lead that space for years. This year, with the introduction of the Demand Unit Waterfall, a lot of things really changed that I think a lot of things changed for the better. Maybe give people the one minute history of the Demand Waterfall where it had come and then why did you decide to change it so dramatically this year?
Terry: Yeah I’d be glad to Matt. I think, as everybody knows, in 2006, we launched the first waterfall and it became pretty much industry standard. We set it around finding key stages in the lead management process. In 2012, we had a new waterfall, right? The reason we changed the waterfall in 2012 was, we saw changes in technology, and we saw changes in process. People starting to adopt new processes like lead scoring that had huge impact on lead management process and also tele became much more important organizations. We also had requests when we launched the original waterfall to give insight into not just market generated demand, but sales and tele generated demand. So in 2012, we announced a new waterfall. We called it the re-architected waterfall and that introduced some new stages. It gave visibility into lead scoring, it gave visibility into the input and output of tele, and we also had stages so that we could see tele generated demand and sales generated demand, in addition to the market generated demand.
That was 2012 but now that brings us to today, and over the last five years, we continue to see changes in those process and technology, right? Some of the changes we start to see now is, people starting to rethink what the buyer or who the buyer is. A lot of work’s been done on personas, a lot of work’s being done around recognizing now that we really want to target groups of personas. That was one big key driver, right? The second is, before the waterfall started, when somebody had a direct connection with us? But if we’d look back at marketing investment and marketing effort, there’s a lot of stuff that happens before somebody directly interacts with you and so we thought it was important to look at that part of the lead management process and the demand management process, and put some structure on how we think about stages before we have a direct connection with our prospect. The third thing was this big huge focus on a company’s marketing and that starts to change how we think about what we measure and it starts to put some structure around like, “Who’s the buyer is?” the account buyer, the prospective buyer.
All those things work together to lead us to two weeks ago where we introduced a new Demand Unit Waterfall to address things like, “When do we start actually tracking somebody in a process?”, “Who really is the buyer and how do they move through the lead management process if we’re changing the concept of what a buyer is?”
Matt Heinz: Talking today on Sales Pipeline Radio. We’re with Terry Flaherty and Kerry Cunningham from SiriusDecisions who, just two weeks ago, launched the new Demand Unit Waterfall. You can learn more about that at their website at siriusdecisions.com. That’s S-I-R-I-U-S decisions.com. Or, if you just Google Demand Unit Waterfall, you’re going to find about 2,000 photos of the funnel that were live tweeted directly into conference. I like a lot of things about it. I like that it eliminates the sales versus marketing distinction. It’s a simpler format which has its pros and cons, and we’ll get into that. But also, I really like the idea of the demand unit. Talk a little more about the demand unit, how that’s differentiated from a lead as well as an account, and why that matters so much?
Kerry: Yeah, sure thing. Great question and something that we’ve been thinking about for quite a while. It really starts with understanding the nature of the disconnect between marketing and sales that has still existed, and we’ve been talking about it for a long time. Marketing still has been really focused on leads and inquiries at the top of the waterfall. Sales saying, “We don’t really care about those things at all. Just get us some opportunities that we can get into our pipeline and close.” We think also about account based marketing and the way that people talk about account based marketing, using the word account all the time but then kind of knowing that that’s not really what we need because if an account is a company, we know that we’ve got multiple opportunities to sell something within those accounts many times. This demand unit, was really our attempt to define what do we actually mean when we talk about the buyer. It has to be people because people actually do the buying, but it isn’t going to be one person in B2B most of the time, it’s going to be a group of people that are acting together. That’s the first really important piece of it is, it’s a group of people acting together, and they’re acting together to solve a particular problem or set of problems for their organization.
And so, really what SiriusDecisions has been saying forever is, “If you want to understand your buyer, you’ve got to start with their need.” Right at the center of this demand unit is that set of needs that you solve for your potential buyer. Then there’s the people around that need who are charged with addressing it, right? When you put those two things together, that’s the demand unit. Really, demand unit sounds a little wonky at first, but when you think about it, it really is the fundamental unit of demand that you have to define at the top of the waterfall, even before, so that you can identify them when you see them, and then attract, engage, qualify, and move them through the buying process. That’s how we were thinking about it and we have a lot of different analogies for it, atoms, molecules, all different ways of thinking about what that unit of demand is but ultimately we thought, because it is literally, that’s the unit that we’re trying to attract and engage, that that’s what we would call it.
Matt Heinz: You reference account based marketing as something that was certainly considered in building this and I have a couple challenges, like account based marketing first of all, implies that it is a marketing function. I think account based, in general, works best when it’s integrated between sales and marketing. But also, it pivots on the accounts. Demand unit may be a kind of funny thing to say but I think the orientation as something that could have multiple units within an account, that isn’t necessarily tied to an individual, makes a lot of sense. I think what this also does, as I mentioned, it just starts to eliminates a little bit of the distinction between what is sales, what is marketing, and just talks about this demand unit we’re trying to engage and convert. How have you heard from some of your clients and others you’ve talked to at the conference, what kind of feedback have they had relative to what that means for them in integrating their sales and efforts? Because I know that, although a lot of companies talk about that and have tried to do that, actually operationalizing and integrated approach between sales and marketing is sometimes a lot easier said than done. What does this imply about that and what are you seeing as primary challenges and roadblocks to making that happening actually in the field?
Terry: That’s a great question, right? In the waterfall today, one of the big comments we hear about the new waterfall is, “What happened to marketing being generated and qualified?” and, “Where’s sales qualified?” Right? What we’ve done in this waterfall, the old waterfall basically looked at the organizational structure, and marketing, and tele, and sales, and that was static. Then what we were looking at was, progression of demand through that work structure. Now what we’ve done is split it and said, “Let’s define key stages that demand has to progress through,” and that’s true whether it’s a new customer or a new offering into an existing customer, for us to sell something, right? There has to be that buying group, there has to be a need, and that demand is going to progress through stages from a potential target, all the way through close.
Now what’s static, is essentially the stages of demand progresses through and what we’ll do, or what we do in the waterfall, is lay in or overlay roles and responsibilities, based on our go to market strategy. We absolutely still need accountability and we still need defined roles in the process of, what’s marketing going to do, what’s sales going to do, and what’s tele going to do, but it’s a very holistic, joint effort that we’re advocating now and it starts at the top. The first stage in the new waterfall targets demand and it’s really critical. That’s the potential, how many potential opportunities do we believe exist in this market segment, and it’s critical that marketing and sales collaborate together, and agree on market definition and agree on market size, right? That’s a great example of a stage in the waterfall where it really is both responsible for aligning and coming to that conclusion that there’s 1,000 potential opportunities for the solution in these target markets.
We absolutely do still need to say, “Okay. In this go to market strategy, marketing may take the first few stages. They’ll get it to the point where we have … What we think is a sales ready demand unit and then we’ll pass to sales, or maybe there’s a tele group involved also,” but the overall structure in the waterfall now is, “Let’s look at the progression of demand and then we can overlay different go to market strategies on top of that.”
Matt Heinz: Yeah. I love that it starts now with the addressable market, right? Which is something that will … I think a lot of marketers haven’t really thought about, right? You just say, “Okay well here’s who I’m talking to and here’s the number of leads I want,” sometimes you don’t step back and say, “Wow is it really realistic to think that 80% of our addressable is going to become a lead in the next 12 months?” Now you guys spent a lot of time thinking about the role in the integration between sales, marketing, and product as well. Is this an area where the product team and the product marketers can really provide support to the waterfall as well to ensure that the denominator that you’re starting from is accurate and really approachable?
Kerry: Yeah. You’re spot on. That was, by stealth almost, one of the things that we’re trying to do is drive alignment not just between marketing and sales, but also all the way up the product because ultimately in a lot of organization, it’s product who’s really defining who the buyer is and doing all the work of really understanding what those needs are. And is usually there’s a number that they’re accountable more that’s something around the target market and what percentage of it they’re going to sell to and all of that. They bend the holders of that information in a lot of organizations but that information wasn’t necessarily related at all to what marketing set as goals, and sometimes, what marketing set as goals weren’t really closely related to what sales had, because marketing was talking about this unit that was a lead, and leads and opportunities are just not related to each other in the math very well.
It was really important for us to combine it. And actually one of the slides in our presentation is one where we defined what the buying group was starting from the market on down to the account, then buying center, and then the buying group. And it’s funny that Terry and I came up with the slide for representing that. We showed it during our review process to the person who’s been running our portfolio in marketing forever and she had a slide in her presentation that was almost exactly the same thing we thought of, “Okay I think we got it right this time.” We really converged on the same view of the market. So that was really important for us and we think it’s going to be a really help to B2B organizations going forward.
Matt Heinz: That’s awesome. We’re talking to Terry Flaherty and Kerry Cunningham from SiriusDecisions today on Sales Pipeline Radio. We’re talking about the new Demand Unit Waterfall, what it means, how it’s changed, and the impact on marketers moving forward. It’s a great adjustment for marketers to rethink their role and their approach. What I’ve seen in some organizations is, especially non-tech, more traditional organizations that may have been very sales driven and maybe really sales driven cultures initially, where marketing has been a little more of the arts and crafts department so to speak. Are you seeing evidence that the new Demand Unit Waterfall can help impact those companies that are thinking about how to create a more demand centered revenue responsible marketing organization from the get go?
Terry: Yeah. Absolutely. What’s been interesting, we get a lot of questions around … in organizations, I just had a call an hour ago, and this organization is somewhat immature in their process. They know that they want to improve their lead management process and become more of a data centric, data driven organization, and their debate and their question is, “Do we progress, do we go to the old waterfall first and then move to the new waterfall? What’s the best deployment strategy?” The beauty of the new waterfall is, I think it’s simpler and easier to socialize internally, and put some structure around these stages where everybody in the organization gets it and inherently makes sense. They’re going directly to the new waterfall, we’re talking about implementation strategies with them that make it very straightforward to be able to deploy this. Everybody’s really excited just because it gives them a way to have common definitions, common process, and start to put quantification around how marketing is adding value, how sales is adding value, how the whole organization is going to grow.
Matt Heinz: Yeah, I would agree. I think that we could say demand unit itself may be a wonky term but the overall format and approach of the waterfall … I think it’s easier to explain. It’s easier for an executive team that may not be immersed in the marketing world to understand. I find it easier to speak the CFO’s language if you’re a marketer versus explain to them new acronyms sometimes. Talking about addressable market and available demand. These stages of demand units are something that I think make a lot more sense and are a lot easier for a lot more organizations to wrap their arms around. So kudos to you guys for that.
Kerry: Thanks Matt. And the key thing, I think what’s really powerful with the demand unit, and you touched on it earlier, is it’s really sort of a single opportunity within an account. But another key element we added, or we introduced, at summit was, how we apply demand units at an account level which is what we call a demand map, right? So the demand map basically helps organizations visualize and quantify how many different potential opportunities are there for our company in this account, right? It’s a structure that looks at the potential different buying groups that we’re targeting. It look at needs, it looks at the solutions, and helps us put some structure around account based marketing from the perspective of, “These are the potential opportunities we’re targeting. Here’s how we can then measure our progression of these different opportunities that I think exist in that organization.” So the last call I had, they had nine potential opportunities in a typical account. Those opportunities may range from, “Hey they’re just conceptually, potential opportunities that exist on paper because an organization of this size in this industry should have this business pane,” to, “Here’s someone we verify and we know they’re trying to sell this business pane,” and, “Here’s some where they’re actually customers already. We’ve closed these opportunities.”
So that demand map really becomes a strategic back plane of, “How do we quantify the potential?” and then, “How do we define our go-to market strategy to realize that potential? Right? “What role does marketing, sales, and tele have?” Each one of those demand units across a demand map.
Matt Heinz: Absolutely. We’re going to take a quick break, pay some bills, we’ll be right back with a little more from Terry Flaherty, Kerry Cunningham SiriusDecisions. We’ll be right back. You’re listening to Sales Pipeline Radio.
Matt Heinz: Thanks everyone for joining us back here at Pipeline Radio. If you like our conversation with Terry and Kerry from SiriusDecisions, want to share some of this with your team if you’re thinking about the Demand Unit Waterfall, definitely encourage you to check that out at siriusdecisions.com. We’ll have links to the new waterfall on our site. In our show notes, you can definitely get a reply of this entire episode on salespipelineradio.com. It’ll be up on our podcast here shortly. Definitely check us out in the next few weeks. We’ve got some great guests coming up. We’ve got Daniel Gaugler who is the CMO at PFL. We’re going to be talking about omni channel marketing, tactile marketing, we’ve got some great conversations coming up. Martin Lindstrom is joining us later in June on neuro marketing and why he thinks that’s the next big buzzword in B2B. Boy, if we had more time, I think we could go deep on neuro marketing, AI, and all kinds of weird stuff with Terry and Kerry today. Then we’re talking about conversational sales presentations with Nadjya Ghausi from Prezi and talking about why conversational sales presentations beat linear sales presentations every day of the week.
But let’s wrap up here with a few more minutes with Terry Flaherty and Kerry Cunningham, senior analyst from SiriusDecisions who debuted the new Demand Unit Waterfall at the SiriusDecisions summit just couple weeks ago. I know there’s been a lot of feedback on the new waterfall from demand gen report and from people … IT hasn’t all been positive, it hasn’t all been smooth sailing, and I think sometimes not everyone’s excited about change and changing something different gives the people opportunity to play armchair quarterback. When I look at that I think, “Well. Doing demand gen and doing B2B demand gen is difficult.” It’s coming up with sort of a single way of defining that for everybody is quite difficult. You’ve got to come up with some kind of a standard but have you guys seen reactions to the waterfall? What are some of the points of feedback you’ve heard in the last couple weeks? And how has that even helped you redefine, or rethink, or even hone your thinking around the waterfall operationally?
Kerry: That’s a great question. It’s always a lot of fun to put these things out in the marketplace and see how people respond to them. I think the responses that we’ve seen are largely positive. Absolutely some critiques that often times are quite valid that address particular situations. For instance: “How do I do this?”, “What if this happens”, “How are we going to do that?”, “How do you account for this situation?” There’s plenty of those situations that we think we’re going to be continuing to work with our clients on developing solutions for. One of the things I think is really critical about this implementation of the Demand Unit Waterfall is that, a lot of the things that people are concerned about with it, for instance: “Do I have a good measurement of my addressable market?”, “Do I have a way of getting a good measurement of the active demand stage?”, “Which demand units are actually in market?”, “How do I link contacts and leads to those demand units at the top of the waterfall?” Those are questions that people are asking us. They’re great questions. There are a variety of different answers but people aren’t doing them today, for the most part, and so those questions cause people concern.
One of the things that I think is really great about this though is that, if you start down the road of solving for those questions in your organization, if you haven’t done them yet, even if you don’t get to all the way to the full implementation of the Demand Unit Waterfall this year? You’ll still make a lot of progress in improving your organization’s performance if you answer one, or two, or three, or four of those questions. It’s not a situation where you have to implement the entire Demand Unit Waterfall tomorrow in order to take advantage of what’s in it. Just getting started, making sure that you, as an organization, agree what your target market looks like, both in you understand what a demand unit is and how many of them there are. If you get aligned on that, if you’re not today, that’s going to be a big boon for you. If you figure out how to identify which demand units are likely to be in the market today? And agree on that across marketing and sales? That’s a huge advantage even if you don’t yet have a stage for that in your waterfall. We want everybody to adopt the Demand Unit Waterfall but we also think just taking the steps that are necessary to do it are all going to be helpful in and of themselves.
Matt Heinz: The conversations around that internally are enormous, right? Whether or not you fully implement this next week, next month, next year, just simply thinking about demand as not marketing versus sales, not leads versus opportunity, and how does this integrate with the sales organization? That conversation internally is going to generate improvement. My one big caveat on the demand waterfall, I love the simplicity but it’s not that simple, right? But I think the details after the simplicity is part of what’s going to make it work particularly well in every organization. I mean every company is a little different in what they’re selling, their environment, the internal culture that they’re selling within, that’s all going to be slightly different so I think … Like this isn’t a detailed step by step framework and I don’t think it’s meant to be, but as a guideline for how to rethink and re-approach your sales and marketing overall, and how to approach integration of sales and marketing, and more efficiently go after the market, to then be customized to your business. I think that’s the way I tend to look at that. Does that approach work?
Kerry: 100%. Yeah. That’s spot on. Again, Terry and I, and the rest of our colleagues, a lot of us have worked on this for quite a while. We want everybody to do this but we know that that’s not realistic today, and it may not even be the best thing for everybody today. But, just as you said, getting down the road toward answering these questions in your organization and getting really good answers? That’s going to make a huge difference and that’s what we want people to start doing right away.
Matt Heinz: Well guys, I know we’re running out of time here. Really appreciate, I know you guys are crazy busy, it’s just a couple weeks out of summit, so you’re either running around helping people interpret this or maybe you’re calling in from a beach finally getting a chance to relax. But either way, really appreciate your time today. I’ve been giving people siriusdecisions.com as a place to go learn more but where else do you recommend people go to check out more detail on the Demand Unit Waterfall?
Kerry: Well I think siriusdecisions.com is the best place to do it and we’re going to be publishing an FAQ blog post soon that will answer a lot of questions that we know people have about that. Terry, do you have other thoughts?
Terry: Nah I agree. I think siriusdecisions.com is a great point for all things waterfall.
Matt Heinz: Awesome. Well thanks again to our guests Terry Flaherty and Kerry Cunningham from SiriusDecisions talking about Demand Unit Waterfall today. If you want to learn more about Demand Unit Waterfall, definitely siriusdecisions.com, S-I-R-I-U-S decisions.com. If you want a replay of our presentation today, our discussion with Kerry and Terry, definitely check out salespipelineradio.com. Catch us on our podcast at the iTunes store and Google Play, and we’ll have a transcripted summary of this conversation on our blog at heinzmarketing.com in about a week. Make sure you join us every week 2:30 Eastern, 11:30 Pacific we’ve got a lot of guests, great conversations on B2B sales and marketing coming up over the next few weeks. We’re out of time today. For my wonderful producer Paul, my creative producer Paul, this is Matt Heinz. Thanks very much for joining us today on Sales Pipeline Radio.
The post Sales Pipeline Radio #70: Q&A w Terry Flaherty @TFlaherty & Kerry Cunningham @KerrySirius appeared first on Heinz Marketing.