4 reasons the Demand Unit Waterfall is perfect for ABM
Columnist Peter Isaacson takes a close look at SiriusDecisions' revised framework and explains why it's a huge leap forward for Account-Based Marketing.
Just last month, SiriusDecisions unveiled its new Demand Unit Waterfall, which provides an innovative framework for managing leads across the full sales and marketing funnel, and it seemed as if everyone around me couldn’t stop talking about it.
What really excited me was that the new waterfall takes (finally!) an account-centric view of the world. In fact, the new Waterfall aligns so well with Account-Based Marketing (ABM) that we were asked numerous times whether Demandbase, my employer, helped create it. (We didn’t, though we have met with analysts at the firm and shared our point of view many times over the past several years.) No wonder I think it’s a great model for ABM!
Here are four of the biggest reasons why:
1. It focuses on accounts
Most marketers are familiar with older iterations of the Waterfall and the impact it has had on the way marketers track and manage leads. The new Waterfall takes a different approach: It recognizes that each purchase decision typically includes various buyers and influencers across a model and provides a system for tracking these connected leads. These buying groups — or “Demand Units,” flow through the following stages of the Waterfall:
Target Demand — This stage is all about sizing the market and identifying your ideal customer profile. You’ll need to ask yourself, “What types of accounts are most likely to value our solutions or services?”
Active Demand — Once you’ve established your ideal customer profile, you’ll want to identify which accounts you actually want to go after. How many companies are ready to buy in the near future?
Engaged Demand — Of the companies you’ve chosen, how many of them have interacted with you?
Prioritized Demand — In this stage, you’ll take all the target accounts that have engaged with you and prioritize them by relevancy.
Qualified Demand — This stage requires human interaction, and you’ll have to start reaching out to key contacts within that account. But for that human interaction to actually convert interest into an opportunity, your team needs real account insights that can help them create relevant and meaningful messaging.
Pipeline & Closed — These last two look familiar to all of us, but one thing that’s changed is that in the past, marketers haven’t really paid much attention to pipeline and closed revenue, but now more and more high-performance marketers are getting involved in these last two stages.
2. It brings sales and marketing together
Unlike its predecessors, the Demand Unit Waterfall doesn’t make a distinction between sales and marketing. Since there are a limited number of accounts that are actively in-market for your product anyway, it doesn’t make sense to divide them up into sales and marketing. Instead, both teams work together to reach and convert their target accounts across each stage of the new framework.
This type of alignment is a key driver of success in ABM. In fact, if you look at the most successful ABM organizations, you’ll notice that their sales and marketing teams work together from the very beginning to deliver relevant, engaging messages across the funnel.
3. It’s a more simplified model
Beyond just simplifying the sales and marketing process, the new Waterfall has also shed a lot of weight. The past two versions had a dizzying array of acronyms: TALs, INQs, AQLs, TGLs, TQLs, SQLs, SGLs. Ditching this alphabet soup of acronyms makes things more simplified and tailored for ABM. Instead of an SQL, we’re finally calling the pipeline what it is: pipeline.
4. It places emphasis on understanding intent
Changes to the new Waterfall were inspired by several fundamental shifts in B2B marketing, one of which is technology.
Technology is really the key to making your marketing and sales efforts more effective across the Waterfall. In an ideal world, you’d be able to tell which accounts were interested in your product well before they raised their hand or were qualified or prioritized.
There’s a way to do that right now, with Artificial Intelligence (AI) technologies, which help you identify buyer intent at earlier stages of the Demand Unit Waterfall. This means you can start targeting and engaging the buyers who are already qualified at earlier stages, giving you a head start in reaching the right accounts at the first possible moment.
While I think this new framework is an ideal fit for ABM, there’s one thing that’s been nagging me: this idea of Demand Units. According to SiriusDecisions, Demand Units are buying groups that have been tasked with solving a problem for their organizations. There can be several units within a particular company, all with their own problems and needs.
SiriusDecisions places a great deal of emphasis on these Demand Units, but what I can’t figure out is how any marketer out there is possibly going to determine the number of Demand Units out there in their Total Addressable Market. For example, imagine you’re trying to sell into GE. How could you possibly understand how many Demand Units exist in the vast GE universe? There could be two, five, or even 15. There’s no way to really zero in on that number and devise a plan to address each Demand Unit’s needs.
Instead, I think the starting point for this new Waterfall is really target accounts. Since SiriusDecisions has already streamlined and simplified the Demand Unit Waterfall, it’s easier to go back to ABM basics and focus our efforts on accounts.
The Demand Unit Waterfall is a big leap forward for ABM, and it really speaks to the growth and potential of the category. Hopefully, the unveiling gives organizations that have been thinking about ABM for a while the push they need to start implementing the strategy. And for those who have been doing ABM for some time, the Waterfall can serve as a guide for how to do ABM even better.
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