Beyond Measurement Advanced Demand Waterfall Use Cases

Beyond Measurement:
Advanced Demand
Waterfall Use Cases
Jason Hekl
Vice President
14 May 2015
Terry Flaherty
Sr. Research Director
Todays Session: Flexing Your Waterfall Muscles
2015 SiriusDecisions. All Rights Reserved
Executive Summary
Key issues
Too few organizations have utilized the Demand Waterfall beyond functional
alignment, process denition 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
Outbound
Inbound
Performance Measurement
Marketing Qualication
Automation Qualified Leads (AQLs)
Teleprospecting Accepted Leads (TALs)
Teleprospecting
Qualified Leads (TQLs)
Process Diagnostics
Teleprospecting Generated
Leads (TGLs)
Sales Qualication
Sales Generated Leads
(SGLs)
Revenue Forecasting
Sales Accepted
Leads (SALs)
Sales Qualified Leads (SQLs)
Demand Planning
Close
Won Business
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
Outbound
Inbound
Additional Data Elements
Performance Measurement
Demand Waterfall Views
Process Diagnostics
Leads (TGLs)
Teleprospecting
Sales Qualication
Demand Waterfall Metrics

(SGLs)
Revenue Forecasting
Sales Accepted
Leads (SALs)
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: Its All About the Arrival
SiriusPerspective: Understanding a leads current Waterfall stage and the path it took is
critical for measuring the eciency and eectiveness 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 dierent business contexts.
Current Stage
Passport
Identies Current
Stage in Waterfall
Captures the Path

Through the Demand
Waterfall
Waterfall Analysis Metrics: Required for Actionable Insight
SiriusPerspective: Waterfall-specic data elds combined with analysis views enable

the creation of key metrics required for advanced Waterfall use cases.
Volume
Conversion Rate
Velocity
What do I currently
have in each stage of
the Waterfall?
How eciently are

leads converting
through Waterfall
stages?
How fast are leads

moving through the
Waterfall?
Waterfall Context Filters: Telling the Right Story
Aggregate
Lead Origination Audience Prole

Filters
Filters
SiriusPerspective: When measuring Waterfall performance, prole and origination

lters ensure that the Waterfall is measured in the correct context.
Data lters
provide
context
10
Business
Units
Geographies
Campaign
Creation
Date
Customer
Types
Polling Question
How would you rate the maturity of your organizations current
Waterfall data collection and analysis methodology?
Beginner
Intermediate
Advanced
Best practice
11
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 signicantly dierent sales and
marketing situations?
How do I isolate lead hando process issues from
design and execution issue?
13
Advanced Performance Measurement: How Its 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
Dene
Waterfalls
Isolate
Cohorts
Build
Dashboards
Convene
Council
Diagnose
Problems
14
Advanced Performance Measurement Examples

Revenue
Dene
Requirement
Waterfalls
Step 2
Waterfall
measurement starts
with dening the
right context for
analysis; multiple
Waterfall views may
be necessary
Step 3
Step 4
Step 5
US and CAN
Nordics
15
China

TBD
Revenue
Dene
Requirement
Waterfalls
Isolate
Cohorts
Step 3
Campaign Campaign
Out of
#1
#2
Campaign
Volume
(1000s)
Throughput
Step 4
(INQ C/W)
Velocity
(# Days)
Step 5
CPL
(USD)
Campaign Campaign
Out of
Campaign
#1
#2
24.9
19.1
8.8
1.4
3.2
1.1
2.8
0.7
3.1
1.1%
3.7%
1.9%
3.6%
1.3%
3.1%
1.4%
2.6%
2.2%
64
61
69
76
88
79
85
84
90
$880
$914
$715
$1,080
$830
$990
$745
$685
$590
16
With Waterfalls
dened, isolate
cohorts by lead
origination lters
and analyze for
volume, conversion
and velocity

Campaign
#1
Campaign
#2
NonCampaign
Isolate
Cohorts
24,900
19,100
8,800
Step 5
MQL
SQL
Step 4
WON
Build
Dashboards
INQ
Revenue
Dene
Requirement
Waterfalls
6.0%
1,494
65.5% 15
979
28.0% 40
13.7%
7.5%
2,617
90.0%
Conv% Velocity
660
15
90.0%
2,355
30.0%
Volume
20
594
41
28.0%
42
274
707
166
$30.1M 64
$69.9M 61
$14.1M 69
17
Deals Won
Value
Cycle
Operationalize
measurements into
management
dashboards, giving
visibility into both
program
performance and
eectiveness of lead
management
processes

Revenue
Dene
Requirement
Waterfalls
Isolate
Cohorts
Build
Dashboards
|-----------------SLAs IN COMPLIANCE---------------|
AQLs
Sent
TALs
Accepted
Engaged in
8 hrs.
Engaged in
8-24 hrs.
Engaged in
24-48 hrs.
SLA
adherence
40,392
40,392
[85%]
3,231
[8%]
19,792
[49%]
9,694
[24%]
32,718
[81%]
Step 4
Step 5
|------------SLAs OUT OF COMPLIANCE-----------|

Engaged in
48-72 hrs.
Engaged in
72-96 hrs.
Engaged in
96+ hrs.
SLA not
adhered to
2,424
[6%]
2,020
[5%]
3,231
[8%]
7,674
[19%]
18
Operationalize
measurements into
management
dashboards, giving
visibility into both
program
performance and
eectiveness of lead
management
processes

Revenue
Dene
Requirement
Waterfalls
Isolate
Cohorts
Build
Dashboards
Inquiry
Outbound
Inbound
Teleprospecting
Leads (TGLs)
Sales Qualication
(SGLs)
Sales Accepted
Leads (SALs)
Close
Convene
Council
Won Business
Step 5
19
Reinforce functional
daily management
with a crossfunctional lead
management council
that meets
periodically to
review and optimize
programs and
processes

Revenue
Dene
Requirement
Waterfalls
Isolate
Cohorts
Build
Dashboards
Convene
Council
Diagnose
Problems
Make Observations (Pattern Analysis)
4
5
Ask Why
Form Hypotheses
Test Hypotheses
Analyze Findings and Act

20
Ongoing
optimization
requires a diagnostic
approach to
identifying and
address
underperforming
programs and
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?
21
Advanced Waterfall Diagnostics: How Its Done
SiriusPerspective: Waterfall diagnostics methodology leverages performance patterns,

hypothesis maps and assessments to identify and resolve lead management issues.
Step
Step
Step
Step
Step
Identify
Patterns
Evaluate
Hypotheses
Assess
Processes
Prove
Hypotheses
Take
Action
22
Advanced Waterfall Diagnostics Example

hypothesis maps and supporting data to identify and improve lead management issues.
Revenue
Identify
Requirement
Patterns
0.38%
Acme
0.65%
Peers
Total Waterfall Eciency

(INQ Won)
Step 2
5.7%
Step 3
Step 4
Step 5
6.8%
10.7%
Marketing Function
(INQ TQL)
57.0%
54.0% 9.9%
Automation
Qualication
(INQ AQL)
6.1%
Sales Function
(TQL Won)
19.8% 31.0%
Tele Qualication
(AQL TQL)
29.1% 22.0%
Sales Qualication
(TQL SQL)
23
21.0%
Sales Close
(SQL Won)
The ABAA pattern

identies a likely
break point in the
AQL-to-TQL
conversion process
Advanced Waterfall Diagnostics Example

Revenue
Identify
Requirement
Patterns
AQLs do not meet teles prole t

expectations
Input (AQL)
AQLs sent to tele prematurely
Evaluate
Hypotheses
Step 3
Broken service-level agreements
AQL
Step 4
Step 5
TQL
Telequalication skills/enablement
gaps
In-Process
Messaging delivered by tele is not

resonating
xBxx
Solution not addressing market

needs
Over-qualication of TQL
Output (TQL)
24
The hypothesis map

for the ABAA pattern
identies possible
reasons for underperformance
Advanced Waterfall Diagnostics

Revenue
Identify
Requirement
Patterns
Not Likely
No
Dene
3
Possibly
No consensus on lead
denition
Engage
2
Probably
No rules for number of

followup attempts
Step 4
Timing
1
Denitely
No timeframe for
acceptance, engagement or
lead timeouts
Step 5
Enforce
Evaluate
Hypotheses
Are broken service-level agreements with teleservices an issue

for our organization?
Assess
Processes
No enforcement of SLA rules
Documented and adopted

lead denitions by segments
Clear rules for followup types
and volume optimized by
yield curve analysis
Clear rules for acceptance,
engagement or lead timeouts
SLA compliance key part of

management culture
25
Assessments
compare current
process
performance to
best practices

Revenue
Identify
Requirement
Patterns
Evaluate
Hypotheses
Assess
Processes
Prove
Hypotheses
Step 5
Teleprospecting Key Metrics

Activity
Unworked Lead %
27%
Initial-Touch Timing Compliance
57%
Average Touch Attempts (SLA=8)
1.4
Average Outbound Calls/Day
38
Quality
% Calls With Live Interaction
8%
% Calls That Make Progress
5%
Average Call Quality Score
3.2
26
Both service-level
and call quality
issues are impacting
conversion eciency

Revenue
Identify
Requirement
Patterns
Form
Hypotheses
Assess
Processes
Prove
Hypotheses
Teleservices
SLA Governance
Notications
Escalation
Yield Analysis
Call Scoring
Sales Alignment
Culture
Take
Action
27
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?
28
Advanced Revenue Forecasting: How Its Done
SiriusPerspective: Demand Waterfall revenue forecasting leverages conversion,

velocity and current volume metrics to identify and prevent future revenue shortfalls.
Step
Step
Step
Step
Step
Analyze
Volume
Forecast
Value
Forecast
Timing
Identify
Gaps
Adjust
Plan
29
Advanced Revenue Forecast Example

Revenue
Analyze
Requirement
Volume
Step 2
Step 3
Step 4
Current Waterfall Stage Volume

Current
Volume
INQ
6,215
AQL
171
TAL
569
TQL
34
SAL
54
SQL
3,568
Validate that current

stage volume
reects active
engagement and
buying cycles
Step 5
30

Revenue
Analyze
Requirement
Volume
Forecast
Value
Step 3
Step 4
Step 5
Current Waterfall Stage Volume

Current
Volume
Current
Conversion
Net
Conversion
to C/W
Estimated
Close/Won
INQ
6,215
54%
0.30%
19
$2,595,293
AQL
171
83%
0.55%
$132,508
TAL
569
12%
0.67%
$530,012
TQL
34
79%
5.55%
$26,5006
SAL
54
39%
7.02%
$530,012
SQL
68
18%
18%
12
$1,722,540
ASP
Expected
Revenue
$140,000
31
Estimated
Revenue
$5,775,367
Net conversion rates

applied to active
current volume
predicts the
expected value from
each stage

Revenue
Analyze
Requirement
Volume
Forecast
Value
Forecast
Timing
Step 4
Step 5
Expected Timing of Waterfall Revenue

Avg. Days at
Stage
Avg. Days to
Close
Quarter
Impact
Estimated
Revenue
INQ
40
221
$2,595,293
AQL
14
181
$132,503
TAL
27
167
$530,012
TQL
12
140
$265,006
SAL
68
128
$530,012
SQL
60
60
$1,722,504
$5,775,367
32
Waterfall stage
velocity metrics can
be leveraged to
forecast likely
revenue impact by
stage and quarter
SiriusPerspective: Demand Waterfall revenue forecasting leverages conversion, velocity

and current volume metrics to identify and prevent future revenue shortfalls.
Revenue
Analyze
Requirement
Volume
Forecast
Timing
$3,000,000
$2,500,000
$2,000,000
Revenue
Forecast
Value
Quarterly Expected Revenue Against Goals
$1,500,000
$1,000,000
Identify
Gaps
Step 5
$500,000
$0
Q1
Q2
Q3
Expected Revenue
$1,722,540
$1,325,031
$2,727,797
Revenue Goal
$1,500,000
$2,000,000
$2,500,000
33
In this scenario, we
face an expected
shortfall in Q2, a
potential surplus in
Q3 and a total future
value coverage of
96% ($5.78M on $6M
goal)
SiriusPerspective: Demand Waterfall revenue forecasting leverages conversion, velocity

and current volume metrics to identify and prevent future revenue shortfalls.
Revenue
Analyze
Requirement
Volume
Forecast
Value
Forecast
Timing
Identify
Gaps
Adjust
Plan
Service-Level
Management
Acceleration
Passive Recycle
Nurtures
Pipeline
Acceleration
Economic Value
Tools
Sales Hando
Compliance
Culture
34
Demand Planning: Three Key Questions
SiriusPerspective: Demand planning provides critical insight into both the Waterfall
eciency 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
eciency?
What changes to plan and budget should we
make to meet our goals?
35
Demand Planning: How Its Done
SiriusPerspective: Eective demand planning is an iterative process used to optimize

program types and budgets to reach future revenue goals.
Step
Step
Step
Step
Step
Set
Goal
Reverse
Waterfall
Align
Campaigns
Evaluate
Scenarios
Finalize
Plan
36
Demand Planning Example
SiriusPerspective: Demand planning should include investments in more than

acquisition programs to optimize revenue performance.
Revenue
Set
Requirement
Goal
Step 2
Demand Planning for FY2016

Revenue
Total Revenue
$28,000,000
Marketing Sourced %
Step 3
Step 4
25%
Marketing Sourced Revenue
$7,000,000
Budget
Acquisition Programs
$840,000
Step 5
37
Marketings target
represents 25% of
total revenue with
an $840K budget

Revenue
Set
Requirement
Goal
Reverse
Waterfall
Step 3
Step 4
Step 5
Plan
Waterfall Analysis
Revenue Goal
$7,000,000
Deal Size
$40,000
Conversion
Point
Conversion
Rate
Stage
Required
Waterfall
INQ to AQL
54%
INQ
16,763
AQL to TAL
83%
AQL
9,052
TAL to TQL
12%
TAL
7,513
TQL to SAL
79%
TQL
902
SAL to SQL
39%
SAL
71,216
SQL to C/W
18%
SQL
278
C/W
50
38
Leveraging
current Waterfall
conversions, 16,763
inquiries are
required to reach
the revenue goal

Revenue
Set
Requirement
Goal
Reverse
Waterfall
Align
Campaigns
Step 4
Step 5
Budget Analysis
Current Plan
Blended Cost per Inquiry
Inquiries Required
$60
16,763
Budget Allocation
Acquisition
$1,005,782
Nurture
Enablement
Total Budget
$1,005,782
Available Total Budget
$840,000
Budget Gap
($165,782)
39
The available budget

will not fund the
inquiry volume
required at current
conversion rates and
execution plan

Revenue
Set
Requirement
Goal
Waterfall Scenario Analysis

Revenue Goal
Reverse
Waterfall
Align
Campaigns
Evaluate
Scenarios
Step 5
$7,000,000
Deal Size
$40,000
Current
Conversion
Improved
Conversion
Stage
Required
Waterfall
Improved
Waterfall
INQ to AQL
54%
54%
INQ
16,763
10,934
AQL to TAL
83%
83%
AQL
9,052
5,905
TAL to TQL
12%
15%
TAL
7,513
4,901
TQL to SAL
79%
79%
TQL
902
735
SAL to SQL
39%
41%
SAL
71,216
581
SQL to C/W
18%
21%
SQL
278
238
C/W
50
50
40
Implementing
nurture programs,
enablement and SLA
governance
improves conversion

Revenue
Set
Requirement
Goal
Reverse
Waterfall
Align
Campaigns
Evaluate
Scenarios
Finalize
Plan
Budget Analysis
Blended Cost per Inquiry

Inquiries Required
Current Plan
Improved Plan
$60
$60
16,763
10,934
Budget Allocation
Acquisition
$1,005,782
$656,036
Nurture
$100,000
Enablement
$75,000
Total Budget
$1,005,782
$831,036
Available Total Budget
$840,000
$840,000
Budget Gap
($165,782)
$8,964
41
Changing
investments to midstage and lateWaterfall programs
enables us to meet
revenue goals with
existing budgets
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
42
Action
Items
Marketing
Ensure that the necessary data elements, views metrics
and lters 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 oering
Consider Waterfall use cases that yield important insights
into product demand and sales eectiveness
43
Recommended
Research
Core Strategy Report: Waterfall Performance Patterns

Core Strategy Report: Advanced Demand Waterfall Analysis
Core Strategy Report: The Demand Waterfall Through a
Process Lens
The Demand Waterfall, Rearchitected
Identifying Signals of Qualication Issues Within the Lead
Management Process
The Cascading Eects 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 Eciency in Lead Management
44

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Beyond Measurement:

Todays Session: Flexing Your Waterfall Muscles

2015 SiriusDecisions. All Rights Reserved

What you will walk away with

Aligning Waterfall Analysis With Insights and Actions

Sales Qualified Leads (SQLs)

2015 SiriusDecisions. All Rights Reserved

Aligning Waterfall Analysis With Insights and Actions

Additional Data Elements

Demand Waterfall Views

Demand Waterfall Metrics

Sales Qualified Leads (SQLs)

2015 SiriusDecisions. All Rights Reserved

Foundational Building Blocks for Advanced

Waterfall Analysis Data: Its All About the Arrival

Waterfall Analysis Views: Supporting Business Insight

SiriusPerspective: When analyzing Demand Waterfall performance, create and leverage

Captures the Path

2015 SiriusDecisions. All Rights Reserved

Waterfall Analysis Metrics: Required for Actionable Insight

SiriusPerspective: Waterfall-specic data elds combined with analysis views enable

How eciently are

How fast are leads

2015 SiriusDecisions. All Rights Reserved

Waterfall Context Filters: Telling the Right Story

2015 SiriusDecisions. All Rights Reserved

Lead Origination Audience Prole

SiriusPerspective: When measuring Waterfall performance, prole and origination

2015 SiriusDecisions. All Rights Reserved

Advanced Waterfall Use Cases

Advanced Performance Measurement: Three Key Questions

How can the Waterfall be leveraged to analyze

Advanced Performance Measurement: How Its Done

SiriusPerspective: Waterfall measurements must be disaggregated to conduct

2015 SiriusDecisions. All Rights Reserved

Advanced Performance Measurement Examples

SiriusPerspective: Waterfall measurements must be disaggregated to conduct

2015 SiriusDecisions. All Rights Reserved

Advanced Performance Measurement Examples

SiriusPerspective: Waterfall measurements must be disaggregated to conduct

2015 SiriusDecisions. All Rights Reserved

Advanced Performance Measurement Examples

SiriusPerspective: Waterfall measurements must be disaggregated to conduct

2015 SiriusDecisions. All Rights Reserved

Advanced Performance Measurement Examples

SiriusPerspective: Waterfall measurements must be disaggregated to conduct

|------------SLAs OUT OF COMPLIANCE-----------|

Advanced Performance Measurement Examples

SiriusPerspective: Waterfall measurements must be disaggregated to conduct

Sales Qualified Leads (SQLs)

Advanced Performance Measurement Examples

SiriusPerspective: Waterfall measurements must be disaggregated to conduct

Make Observations (Pattern Analysis)

2015 SiriusDecisions. All Rights Reserved

Analyze Findings and Act

Advanced Waterfall Diagnostics: Three Key Questions

SiriusPerspective: Waterfall diagnostics leveraging performance patterns can identify

Which lead management subprocess(es) are

Advanced Waterfall Diagnostics: How Its Done

SiriusPerspective: Waterfall diagnostics methodology leverages performance patterns,

2015 SiriusDecisions. All Rights Reserved

Advanced Waterfall Diagnostics Example

SiriusPerspective: Waterfall diagnostics methodology leverages performance patterns,

Total Waterfall Eciency