The Demand Unit Waterfall and Salesforce Operations – What Is the Demand Unit Waterfall?

Have you heard about the Demand Unit Waterfall? If you work in Marketing, you probably have. And if you work in Marketing Operations and your Marketing team is talking about it, you’re probably wondering what it is and what it means for you. In this article, the first in a series, I’ll discuss what the Demand Unit Waterfall is and what it means to Sales & Marketing. In my next article, I’ll talk about the changes you’ll need to make in Salesforce to support the Demand Unit Waterfall. Finally, in a third article, I’ll discuss the automation needed to make the Demand Unit Waterfall come alive.

First, what is the Demand Unit Waterfall? In short, it’s a new Marketing & Sales methodology, a new way of managing prospects and transforming them into Closed Won sales. But the devil is in the details, and here they are.

Marketing Waterfall Concepts

In order to understand the Demand Unit Waterfall, it helps to understand how companies have typically managed Leads. Usually, Marketing worked with Leads one at a time. They track a Lead’s involvement in Marketing Campaigns. They calculated a Lead Score. That Score then drives the Lead upward through various stages. Eventually, the Lead is moved to the Marketing Qualified Lead (MQL) stage. At this point, Marketing lobs it over to Sales. From here, it becomes a Sales Accepted Lead (SAL), then a Sales Qualified Lead (SQL). At this point, Marketing has totally lost track of it. Eventually, hopefully, the Lead will result in Closed Won business.

This classic process for managing Leads has worked well for many years, but there is definitely room for improvement.

Enter the Demand Unit Waterfall

The primary premise behind this Marketing methodology is that, for many types of products, the buying decision is not made by a single person (a Lead). It is instead made by a group of people. Once you acknowledge this, you realize that while nurturing and scoring individual Leads makes sense, collectively nurturing and scoring a group of Leads from the same company who are all interested in the same product, makes even more sense. After all, if the entire group of people will be involved in making the buying decision, isn’t it better to nurture and score the group as a whole?

Get Started by Defining Personas

To begin working with the Demand Unit Waterfall, you first have to identify the types (or personas) of people involved in making the buying decisions. There’s no “one size fits all” answer for this: it really depends on the nature of your product and your target accounts. For example, if you sell a patient/caregiver portal to hospitals, the personas of the people who are involved in buying decisions may be the CEO, CTO, CFO, and Chief Medical Officer. If you sell a large-scale project management system, the personas may be the CTO, VP of Development, and VP of Quality Assurance. Once you have identified these personas, you have identified the roles of the people who must be nurtured as part of the Marketing and Sales processes.

In conjunction with this, you devise a system for identifying the persona assigned to each Lead that comes in. For example, you may say, “Any Lead with a Title that includes VP or Vice President and that has a Department Name that includes Development or Engineering will be assigned the “VP of Development” persona. The persona doesn’t have to match a person’s title; instead, it reflects the perspective of the person during the buying process.

Buying Group Members

With this in hand, you can map out your Demand Unit Waterfall process. A Lead comes into the system and is assigned a Persona. Depending on the Campaign that brought the Lead to your attention, you can determine the product the Lead is interested in (the “product interest”). If it’s the first Lead at that company who expressed interest in that product, you create a “Buying Group” record to associate the Lead with. If others at the same company have already expressed an interest in that product, a Buying Group already exists. In this case, you associate the new Lead with the existing Buying Group.

For each product interest, you’ve already identified the personas who are involved in the decision-making process. When you first create a Buying Group, you create related records for each of those personas. This is true even if you don’t already know the names of the people in them. Over time, whenever you associate Leads with the Buying Group, you use the Lead’s persona to match the Lead with these related records. These related records then become Buying Group Members. This is the set of people (with their personas) who will ultimately make the decision to buy your product.

As in the past, when a Lead interacts with your Campaigns, you continue to score it. But at the same time, you also calculate a score for the entire Buying Group. Increases to the Buying Group score drive the Buying Group to higher and higher stages. Eventually, it passes from Marketing to Sales. When it does, the Buying Group is significantly better qualified than individual MQL Leads had been in the past. As a result, Marketing hands a much more qualified potential deal to your Sales team.

The Primary Premise of Demand Unit Waterfall

There’s more to the Demand Unit Waterfall, of course, but these are the basics. In short, the Demand Unit Waterfall is all about realizing the power of the group in making buying decisions. The earlier you identify which players need to be involved in the buying decision, the better you can market and nurture them. This also positions you to better assess the interest level of the entire group. The result is that better-qualified deals are handed to Sales, resulting in a higher close rate. Everyone wins.

By now, if you’re in Marketing or Sales Operations and work with Salesforce, you may be wondering what this means. How do you transform your current Lead management processes to work with the Demand Unit Waterfall? Stay tuned! In my next article, I’ll be talking about the schema you’ll need to build. After that, I’ll tell you how to add automation to bring the Demand Unit Waterfall to life for your company.