Enthusiasm without thought.
That sums up the reactions to SiriusDecisions’ unveiling of their 2017 waterfall. The reality is nothing has changed regarding the funnel. Whether you track progress of people, leads, accounts, or buying centers, the funnel is still an arbitrary tool to measure impact of effort in revenue development. It’s helpful. Misleading? Somewhat…since purchase sequences aren’t linear…but that sort of tracking isn’t quite here yet.
I like the people at SiriusDecisions and they take time to carefully consider issues in B2B marketing. The latest version of their Funnel Framework seems like a step backward in helping marketers understand their results. And I am surprised more people aren’t calling them out.
The Demand Unit=Department=Buying Center=Buying Group
The Demand Unit (DU) is just another name for Team, Department, Buying Center, Buying Group, etc… There are a lot of sales books on buying groups and how to build them. This is a well known concept (especially in Sales). The Challenger Customer is one of the more recent incarnations of this concept, providing rigor and methodology for understanding the personalities within a Buying Group I wrote about operationalizing this methodology a few months ago. And MartechToday also linked the Demand Unit back to CEB’s work.
The Buying Center concept is useful and closer to reality than Account Based Marketing. Thus, SiriusDecisions is working toward bringing Marketing into the daily reality of Salespeople, who seek to build Buying Groups. Of course, marketing operations and Marketers must further understand how to operationalize such a concept beyond the Buyer Persona.
Implications of the Buying Center for Marketing Operations
Now in marketing ops, buying centers haven’t been discussed as much because it creates a lot of work to build out this level of organizational detail. It’s nice to see that the conversation is already moving toward a Buying Center Custom Object that may expand the utility of the Account Object. Normally, I would tend to build various Accounts on Location, HQ, Region, Business Unit. Sales may or may not consider these Buying Groups. The recommendation is to consider building out a hierarchy:
- Ultimate Parent
- Account Location
- Account Business Unit
- Buying Center
- People [Marketo already shifting to this]
- Buying Center
- Account Business Unit
- Account Location
Doing so is not easy at all and I doubt most firms even need to go this far. The Demand Unit/Buying Center, demands such a structure to enable tracking as well as improved delivery of data to Sales.
Now it’s possible one person could be part of multiple Buying Centers or Accounts in this model, so spend a bit of time on how the new data structure will work. I know of a few firms already down this path, but fully operationalizing Buying Center as a distinct unit will be more challenging. I question if this is worth it for all but the Largest sellers. Sales people are clever folk and will figure out the buying center because that’s their job. I almost fear this talk will put further pressure on Marketing Ops to deliver vacuum packed, accurate Buying Centers on a silver platter, when we all know Sales still has to build relationships to get the lay of the land.
Remember, the Map is not the Territory – our fancy marketing data doesn’t reflect the internal dynamic or reality of a Buying Center or Account. Salespeople still need to build relationships and understand their client’s internal dynamics. Marketing cannot, and should not, replace this with automation.
Selling Cake and Cookies to the Right Teams
SiriusDecisions also discussed how the Demand Unit works within the matrix of Solutions Offered against each Buying Unit. The grid explains how to match Solutions against Buying Centers is helpful to new marketers. I would be surprised if a Marketer or Salesperson isn’t familiar with their firm’s grid already. None of this is new.
Integrate’s David Crane wrote about the new funnel, providing a helpful graphic, which I borrow here.
Grant Grigorian of PathToScale described this matrix as you can sell Cake to Team 1 and then branch out into Cookies, which are desired by Team 1 and Team 2. Both teams may have the same executive sponsor, or not. I know some firms like to have separate funnels for each Solution area, which makes sense when the Business Units or products tend to be mutually exclusive. Yet, many solutions overlap as do Buying Centers, so I personally avoid separate funnel tracking, instead relying on data slicing at the end to look at product interest.
SiriusDecisions seems to be suggesting that Marketing Ops isn’t doing enough to segment the database along the Buying Center-Solution mapping matrix. It’s possible, as many firms aren’t always able to collect enough targeting data. If this is a call to action for MOPS to do better segmentation, great, let’s do it. On the other hand, SiriusDecisions seems to be stating the obvious.
Will there be Better Marketing-Sales Alignment?
The idea some people are floating that Marketing and Sales will be amazingly aligned because of the new funnel stages is entirely wrong. Matt Heinz of HeinzMarketing wrote that he loves “the current nomenclature specifically and intentionally does not call out where sales is involved vs marketing involved.” While the new model does avoid those assignments, I do not see this language changing B2B organizations at all. There will always be relationship builders and mass communicators.
The only time Marketing and Sales are merged in this way is at a startup. The “marketers” and “sales” people are always together, in the same rooms, calls, and discussions. They craft the messaging together until it’s scalable. The reality is the skills required to build personal relationships versus mass scale interest are different and should be separate. Should the efforts be aligned? Yes.
Alignment comes from a lot of work to build trust and to operationalize and fine tune the agreements made. It’s irrelevant what the Stage names are as long as the ICP and process are well defined and there is continuous communication and data-based discussions on the results. Any time I’ve seen the two teams misaligned is when communication has stopped. The Stages here do nothing to improve communication.
New Stages or Old Stages?
The new SiriusDecisions stage names are confusing. Since most firms already built out the earlier SiriusDecisions model and customized it according to their situation, then how do these new, vaguer stages add value to analysis?
I am not convinced the stages do anything other than to conflate earlier Stages and reduce visibility of what’s happening, whether you look at People, Leads, Accounts, or Buying Centers. In my earlier discussions on ABM, I had suggestions on how to think about Stage names and Prioritization once the coverage on the Account (or buying center) reached the threshold.
A new emphasis on TOFU? Not really.
Quite a few industry commenters said that the new funnel framework re-emphasized top of the funnel (TOFU) efforts. I don’t see this at all. What I do see at many organizations is the Target Account selection was often muddled with Buying Persona. Thus, the idea of Target Demand is helpful because it is outside of the Marketing Automation database constraint, allowing Marketing to more clearly show the ratio between the Target Market/Estimated Demand and the actual data available.
Here’s my take on the New Stages vs. The Old Stages
| New 2017 Stage | Older Stages | Thoughts |
| Target Demand | [not used] | Target Account List
Buying Center List (more at territory level though). How would I estimate the number of Buying Centers? Is that appropriate for my firm at this point in time? |
| Active Demand | Anonymous on site
Anonymous off-site Known |
Requires more Anonymous tracking and third party data. |
| Engaged Demand | Known
Engaged Pre-MQL |
New version is less nuanced. All open to arbitrary decision. |
| Prioritized Demand | MQL/MQA/MQDU
TAL |
At it’s core, we want to flag higher potential people and firms to Sales at the right moment. Predictive tools and lead scoring do all of this already. |
| Qualified Demand | Opportunity or SQL
TQL |
Same. Older names may be more nuanced. |
| Pipeline | Opportunity | Same. There are always gradations of Opportunities and Pipeline definitions must be the same in Sales and Marketing. |
| Close | Closed-Won | Same |
How Should You Operationalize the Buying Center Concept?
As I mentioned, the big contribution of the new Model is to push forward the MOPS work on construction of new objects to capture more of the data relationships. Only you can decide if your organization is ready to move down this path.
The Missing Objects for Reporting Success
Integrating ABM and the Buying Center into the martech stack requires new objects. While I’ve written a bit about the Touch object in the past with Channel-Offer Attribution, there are 4 objects that are often missing from the MOPS toolkit, especially at the SMB level.
These objects can be custom built or, sometimes, created from add-on tools to your CRM.
- Company Object
- Ties together related accounts to an Ultimate Parent
- Identify whitespace faster.
- DUNS linkages between Accounts
- May improve compliance with Finance.
- [Product Opportunity – roll out entire Account Hierarchies before entering data]
- Demand Unit/Buying Center Object
- Departmental or Buying Center
- Associate multiple people to a Team or Sub Account
- Is it necessary if we use SFDC Account Hierarchies effectively?
- Requires some additional thought regarding Thresholds and Coverage.
- May reduce some burden on Sales which traditionally has taken People and associated them to Accounts/Teams according to reality. It also may make their lives confusing if mis-match rate is high and they have to manage the data relationships as much.
- Funnel Object
- Tracking people, Accounts, Buying Center through the Stages. PathToScale and Full Circle Insights do this well.
- Touch Object
- Using the Channel Offer Method. Can be a custom system if you keep it simple. Or you can just call Bizible.
- Can be merged with Funnel Object, but this may cause issues with FT/LT at each Stage, which doesn’t really help you.
New objects are a lot of work!
Identifying Active Demand
Whether you do this with Third Party data or First Party and by Person or Account, is up to your team. It still comes down to what John Hurley of Radius suggested as a starting point:
- Fit: How much we like you?
- Intent: Are you in an active buying cycle?
- Behavior: How much you like us?
Which underlines my point – the SiriusDecisions model doesn’t change much or suggest a new, radical path for the B2B Marketing or Sales teams. Whether you look at Fit, Intent, and Behavior at the Person, Buying Unit, or Account levels, you still have to look at it and decide what thresholds matter to get a human involved.
To further Operationalize the Buying Center, we must look at the three levels:
- Person
- Buying Center
- Account
And go back the basics that TOPO and Engagio suggest for ABM reporting:
- Engagement in Minutes by Person and Account
- Fit – Target Account, ICP
- Coverage – % of buying team we know about and % of Account Team we know about. Can we find more data to fill in the gaps?
- Intent – can we find more about the people we know or don’t know.
Then your team needs to decide how to best handle the flagging of people and teams who are ready to speak with a Salesperson. And yes, this can, and should, involve humans at predetermined times. For example:
| Record Type | Possible Threshold | MOPS Action | Sales Action |
| Person | Match ICP and Intent+Behavior = X Match Decision Maker ICP only |
MQL to SDR | Build relationship; set meeting |
| Buying Center | 50% of target ICPs if Decision Maker missing
Intent =>X on 50% of team |
MQBC to SDR | Develop understanding of Account; obtain more coverage. |
| Account | 50% of target ICPs
Decision Maker as MQL |
MQA to SDR or AE | Develop understanding of Account; obtain more coverage.
Set meeting |
What the Detractors Say
I came across only a few marketing operations leaders willing to say SiriusDecisions fell short of the mark with the new Demand Unit.
Carlos Hidalgo, CEO of VisumCX said “there is a lot lacking in this 3.0 version of the Waterfall.” Pointing out that the definition of Active Demand might mean the “buyer is well down their purchase path, meaning late to the game.” And Mr. Hidalgo points out the key question when using Buying Centers – “not all members of a buying group…will equally participate in the buying process.” This is critical to deciding how to operationalize a Buying Center and ABM approach – do you send MQLs over or do you send MQAs? When is a Buying Group complete enough to have an SDR or AE involved? I personally would setup a system where certain Buyer Personas are sent to MQL based on Predictive Scoring, regardless of Completeness of Account (or Coverage). But if a Buying Group had 3 out of 5 personas and the 2 top personas were absent, then I’d flag the entire Buying Group to the SDR to get things started.
Jeff Pedowitz, founder of The Pedowitz Group seems to agree with me that the Stage names do “not work for every company…rather, they customize it to their unique needs…Second, the names chose for the new Demand Unit waterfall are very confusing.” Mr. Pedowitz also believes “the concept of the funnel should be retired anyway” in favor of an “infinity loop.”
Justin Gray, CEO of LeadMD said “This outdated graphic is a symbol of yore.” Mr. Gray also wrote later, in a blog post, that “funnels drastically oversimplify the buying process into a linear progression, that, in reality, doesn’t behave as the buyer does.” Instead of solving the fundamental issue with funnels, SiriusDecisions compounds it.
Conclusions
My recommendation is to study the reactions across the industry as well as the roadmap SiriusDecisions put out. If you are the midst of a Lifecycle Build or Rebuild, it is a good idea to consider the use of Buying Centers or Account records and not just Leads/People as the unit of measure. You can still use Leads as well as Accounts. If you are happy with your existing systems, then I would consider a plan to better use Lead-to-Account matching going forward, as well as possible expansion of data into Buying Centers, preferably identifying Buying Groups in The Challenger Customer way.
What I do not suggest is the use of the Sirius Decisions Stage names or the new framework.
Have you built a system based on Account or Buying Centers? Tell us about it below.
[Updated: June 20, 2017 with link to Grant Grigorian and podcast]