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Playbook: Demand Generation Funnel

DG-Funnel

Determine How Leads Flow Through the Marketing and Sales Funnel

A Demand Generation Funnel report determines the impact and effectiveness of or an organizations’ Demand Generation activities, and conversion rates at each stage of the funnel. The funnel stages of a traditional Demand Funnel are:

Demand-Funnel


Why You'd Use This Funnel

This funnel tracks conversion rates and engagement at each stage of the demand funnel so that demand generators are able to determine how effective their marketing efforts are at converting leads into business. This funnel defines who your best leads are, where they are in the demand generation and sales process, and how they move through the sales funnel to convert into business. Additionally, this type of report allows demand generators to identify “leaky” stages in the funnel, where people are getting stuck or dropping out without converting. 

Demand generators use funnel data to inform their campaigns in an effort to generate more qualified leads, as well as nurture leads through the funnel faster and more effectively. 

WHO THIS is valuable for
  • Demand Generation teams
  • Marketing Analysts
  • VPs of Marketing
  • Chief Marketing Officers
  • AVPs or VPs of Sales

If you're at a smaller organization, your Chief Revenue Officer may also be invested in this data.

DATA YOU NEED
  • Lead Scoring model defined and built into CRM and MAP
  • Lead Source and Campaign Data
  • Primary Campaign Source
  • # of Leads, MQLs, SALs, SQLs 
  • Opportunities and Pipeline Created (Closed Won, Closed Lost)
  • Time Frame (based on touchpoint)
DATA SOURCES REQUIRED
  • Marketing Automation Platform (Marketo, Hubspot, Eloqua, Pardot, etc)
  • CRM (Salesforce, SAP, etc)


Key Characteristics of a Great Demand Funnel

Most demand focused marketing teams are familiar with the traditional funnel. It's been covered time and time again. So, instead we've chosen to highlight a few characteristics of funnels that you should be thinking about.

Funnel Type

What type of funnel are you reporting on? The two main types are:

  1. Waterfall
    The units within a waterfall funnel have to start at the top -- generally with leads. In other words, for something to move through the funnel it HAS TO start at the top. It can't enter in the middle or late funnel (unless you've constructed your waterfall funnel to look only at middle to late stages). With this model, you can look at conversion rates and velocity.
  2. Snapshot
    This funnel looks at funnel performance within a given period of time. So, each funnel stage is independent of the stages above and below. In other words, this looks at how we're doing in a give period of time -- generally monthly and quarterly. It answers the question "How many of xx (leads, MQLs, etc...) did we create?" In the traditional sense, this isn't really a funnel, since it's loose correlation (and not direct).

Velocity

While most marketers now measure volume (leads, clicks, content downloads, etc.) and some measure value (pipeline, ROI, etc.), most Revenue Marketers can measure and report on Pipeline Velocity.

Pipeline Velocity is the one metric that separates Revenue Marketers from everyone else. We looked at this in detail as part of our "State of Revenue Marketing Report"

pipeline-velocity

Velocity is important because it identifies opportunities for marketers to improve the way that a lead moves through the stages. Where is the lead getting caught up? What can we do improve the conversion time? Are we increasing or decreasing sales speed? This is a missed opportunity for marketers to report on how their marketing efforts impact the high and low points of pipeline acceleration.

Trend Data

While having data on funnel performance in a given period of time (especially if you can tie it to performance to date vs goals) is crucial. But perhaps even more important is a marketers ability to see how it's trending over a given period of time (generally quarter-over-quarter). Being able to answer key questions, like:

Are we performing better or worse than the previous quarter?
How is velocity changing?
Are the improvements we implemented having an impact?
If we're behind, what levers can we pull to get back on par?

Tying It All the Way to Revenue

Being able to tie funnel performance all the way to revenue is the most important metric. Why? Because it's what the business actually cares deeply about. Most marketers and teams KPIs (and subsequent bonuses) are tied to pipeline development. But in our view - this isn't good enough. Yes, it's what the marketing team has the most ability to impact. But again - it's not the metric that the business talks about. Think about it - does your CFO keep close track of pipeline? Probably not. 

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