Use The B2B Revenue Waterfall To Laser-Focus Your Targeting

The Forrester B2B Revenue Waterfall??offers the insights needed for planning and monitoring progress in relation to the possibilities that make up a B2B revenue plan for all three revenue engine functions: marketing, sales, and customer engagement. The Waterfall has had several significant improvements since its previous iterations. We are focusing on the top of the Waterfall, which has two tiers and a "targeted" stage for now.

The group of accounts known as "targeted accounts" should include one or more targeted opportunities. One of the four opportunity types—acquisition, renewal, upsell, and cross-sell—called targeted opportunities serves as the foundation for revenue acquisition targets.

In order to synchronize marketing, sales, and customer engagement on where the possibilities are to be pursued across the Waterfall, it is crucial that this targeted stage at the top of the Waterfall be completed. If your targets are essentially the incorrect match for what you're selling, no amount of amazing selling, demos, awesome content, delivery methods, or even great sales representatives will matter. Because data matters, utilize data and insights to create the most accurate list of target accounts and prospects. It is really important. In fact, Forrester research shows that companies that adopt sophisticated data-driven business capabilities are almost three times more likely to see double-digit growth than those that are still in the early phases of implementation.

Economic benefits accrue to organizations that are aligned across the revenue engine — with functional plans that work together to drive corporate revenue goals. Joint targeting is one critical area of alignment that should occur during each annual planning cycle and can have a big impact on win rates, cycle times, average deal sizes, and the creation of balanced sales territories and rep level quotas. Marketing and sales operations should take an active role in an insights-driven strategy and collaborate jointly to identify targeted accounts and opportunities. This helps define the coverage focus for both functions.

While any targeting approach should be data-driven and granular, there is a multiplier effect when sales and marketing align together, creating the most comprehensive, accurate, and specific insights. There are six capabilities that we know are pivotal to doing this:

Market segmentation and sizing – Based on verticals, regions, and firm size, divide the whole market into several segments. To determine the market potential for your offerings, carry out a top-down market study. The best way to size objectives for the upcoming year is to use the service attainable market, or the market you can really anticipate to reach given your resources and competitive pressures. Total addressable market research works well for a three-year plan.

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Market fit – Prioritize segments by market attractiveness and ability to win. Assess external factors like key trends, expected category spend, and competitive presence. Assess internal factors that correlate with the ability to execute, including things like domain knowledge, sales readiness, and solution viability.

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Account fit – Use the best available account data and sales history to build an ideal customer profile. Leverage ideal customer profile criteria, which are nuanced and unique to your product, to score and rank accounts for marketing and sales coverage.?Examples include the age and location of a target’s assets for a vendor selling asset management software, or the number of hospital beds for a healthcare target. Prioritize those accounts and buying centers that have the highest upside revenue potential, while taking a lighter approach to those scoring lower.

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Account opportunity – Calculate the opportunity potential for each account by regression analysis or modeling with historical pipeline or sales data based on the account fit profile. Determine the number of opportunities within each account, the associated expected deal size, and average win rate.

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Coverage strategy – Once you have clearly mapped your opportunities and potential spend by account compared to the share of budget captured, you can develop the appropriate account strategy. For each account, consider: Is it an acquisition target or an existing customer with expansion potential? Is the goal to protect and retain share? Define the sales and marketing coverage strategy.

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Dynamic territory management – Where the power of data really comes to life is in the ability to react dynamically, reprioritize accounts, and optimize territories based on changing conditions — whether that includes mergers and acquisitions activity, intelligence about new initiatives in an account, or a wide range of other buying signals such as engagement on your website or your competitor’s site.

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The secret to converting more prospects from target to closed-won revenue is to start strong at the top of the B2B Revenue Waterfall with an insights-driven and aligned strategy to targeting. Utilize this chance to be much more specific and detailed about who has previously purchased your goods, who is likely to do so in the future, and how much those prospects will likely be worth to you. The magic comes when sales and marketing work together to put that knowledge into practice.

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