“My sales team has too many opportunities and too much pipeline,” said no sales leader ever. Recent changes in B2B buying habits offer sales and marketing leaders a unique opportunity to adopt a new approach to building pipeline that will support reps’ quota attainment efforts.
Sales Leaders Don’t Care About Leads — They Care About Opportunities
Let’s face it: Sales leaders and their teams never cared about leads. They’ve always cared about qualified opportunities that turn into closed deals, rendering the lead construct outdated. Moreover, a lead is an individual buyer, and Forrester data show that B2B purchasing decisions are getting more complex and are increasingly made by buying groups versus a lone individual. According to Forrester’s B2B Buying Study, in 2021, three or more people made the decisions in 81% of B2B purchases. Consequently, a new approach is needed, one that aligns marketing and sales around generating qualified opportunities and identifying all members of the buying group.
Align Marketing And Sales Around Opportunity Creation And Pipeline Generation
Sales, marketing, and customer success must align around processes that generate qualified opportunities that convert into revenue. An example of aligned processes is Forrester’s B2B Revenue Waterfall, which captures and visualizes the movement of opportunities and associated buying groups through the revenue cycle. It aligns the entire go-to-market (GTM) team around demand generation throughout the customer lifecycle.
The revenue waterfall focuses on generating new opportunities — not leads — at every engagement and segments those opportunities by type. The concept of “opportunity types” helps marketing, sales, and customer success differentiate between new customer, upselling, and cross-selling opportunities. Due to changes in buyer purchasing behavior, the most recent iteration of the B2B Revenue Waterfall has been updated in three main ways to:
- Focus on opportunities, not leads. B2B organizations must shift their focus to recognize that multiple leads can come from the same company, creating an opportunity. Shifting from leads to opportunities aligns marketing’s efforts with what sales wants and needs to be successful. It focuses marketing on engaging multiple members of the buying group associated with an opportunity before turning it over to sales. This newfound alignment will bust down internal silos and drive new opportunities.
- Sell to buying groups instead of the individual buyer. Sellers’ approaches must reflect this change. Today, there are typically multiple people (and departments in more complex purchases) involved in a buying decision. Therefore, all buying group members should be attached to opportunity records. This will improve detection, engagement, prioritization, and qualifying of all opportunities.
- Segment opportunities by type. As we move from leads to opportunities, it’s important to segment opportunities by type (acquire, cross-sell, upsell, or retain) since in a subscription world, the first sale is typically only a foot in the door and a chance to demonstrate value and earn more business. Despite this, sales and marketing too often focus their efforts on finding and closing new accounts. This approach overlooks the myriad opportunities for upselling and cross-selling existing customers. The B2B Revenue Waterfall helps sales leaders identify all opportunities and design the optimal path for each opportunity. By tracking each unique opportunity type, sales leaders can provide guidance to the entire revenue organization on performance and resource allocation.
Forrester’s B2B Revenue Waterfall is a valuable resource for all revenue leaders. It helps drive internal alignment and demand generation throughout the customer lifecycle. Companies need well-defined, aligned processes to attract customers, engage them in the right ways, close deals, and get customers onboarded. The waterfall is designed to be easily implemented in common sales force automation systems using standard objects and brings a new level of alignment between the sales, marketing, and GTM functions.
Forrester’s B2B Revenue Waterfall is foundational research that helps sales leaders generate the best opportunities and puts them in a position to succeed from the very start of the year.
Blog courtesy of Forrester Research and authored by Phil Harrell, VP and senior research director. Read more contributed blogs from Forrester here.
