HomeBlog Demand Conversion, But at What Price?

Demand Conversion, But at What Price?

February 27, 2013 | By Tony Jaros

It’s easy to get caught up in using the waterfall as only a mechanism of conversion. Failing to consider cost and scalability in your model, however, essentially guarantees that model will be inefficient, and its performance more difficult to maintain. We’ll bet neither of these realities are things that a sales or marketing leader would like to share with an inquisitive chief financial officer, chief executive officer or board of directors.

When SiriusDecisions introduced its rearchitected Demand Waterfall in May 2012, a significant – but often overlooked – change was made to the sales qualified lead and close stages.

Those who see life in Technicolor may have noticed that the bars signifying each stage are now comprised of three colors vs. only one. This was done to reflect the emerging best practice of tracking the progression of demand created by three critical sources: sales, marketing and teleprospecting. But why?

In a world where leads from each of these sources bore the same cost, and had the same level of scalability, such a shift wouldn’t have been necessary. But leads typically do cost more when they are created by sales or teleprospecting, and a marketing engine is more scalable when built correctly.

The rub, of course, is whether a lead coming from outside sales will ever near the quality of one created by a rep or partner. By tracking the conversion of leads from these sources as well as their costs and other considerations, b-to-b organizations will have a much better feel for whether their waterfalls are not only running well today, but will continue to do so.

It’s easy to get caught up in using the waterfall as only a mechanism of conversion. Failing to consider cost and scalability in your model, however, essentially guarantees that model will be inefficient, and its performance more difficult to maintain. We’ll bet neither of these realities are things that a sales or marketing leader would like to share with an inquisitive chief financial officer, chief executive officer or board of directors.

Tony Jaros

Tony Jaros is President and Chief Product Officer at SiriusDecisions. His 20 years of experience spans a wide range of disciplines, including field marketing/demand creation strategies, tactics, metrics and organizational structures; general marketing strategy; marketing communications; and inside sales/teleprospecting. Follow Tony on Twitter at @tjaros.
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