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Growth · Enterprise

Demand Generation Waterfall

The Demand Generation Waterfall (based on SiriusDecisions/Forrester's Demand Waterfall) provides a standard taxonomy for tracking B2B leads from initial inquiry through to closed revenue. By measuring conversion rates between each stage, you can identify exactly where your pipeline leaks and focus improvement efforts. It bridges marketing and sales with a shared language for lead progression.

When to use this framework

  • →Marketing and sales blame each other for pipeline problems
  • →You don't know where leads are being lost in the funnel
  • →You need to forecast revenue from your current pipeline
  • →You want to set SLAs between marketing and sales
  • →You're building or optimising your lead scoring model
Related:Pirate Metrics (AARRR) RACE Framework SOSTAC Planning Model

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Worked Example

Salesforce (B2B SaaS, illustrative)

1. Top of Funnel

Total leads entering the funnel from all sources (form fills, content downloads, event signups, chat).

50000

Where do inquiries come from? Content, events, paid, inbound, outbound.

1. Content downloads / blog (30%) 2. Events / webinars (20%) 3. Paid search (15%) 4. Free trial signups (15%) 5. Partner referrals (10%) 6. Outbound SDR (10%)

2. Marketing Qualified Leads (MQLs)

What criteria must a lead meet to be MQL? Lead score, firmographics, engagement level.

Lead score ≥ 50 (based on firmographic fit + engagement). Must be from a company with 50+ employees. Must have engaged with 2+ content assets or attended a webinar. Excludes students, competitors, and agencies.

Percentage of inquiries that qualify as MQLs.

25

Inquiries × MQL rate.

—

3. Sales Qualified Leads (SQLs)

What must sales verify before accepting a lead? BANT (Budget, Authority, Need, Timeline) or MEDDIC.

BANT qualified by SDR: confirmed budget/authority to purchase, identified need aligned with Salesforce products, timeline within 6 months. Decision-maker or influencer identified.

Percentage of MQLs that sales accepts as qualified.

35

MQLs × SQL rate.

—

4. Opportunities

Percentage of SQLs that become qualified opportunities (prospect enters buying process).

50

SQLs × Opportunity rate.

—

Average contract value for closed deals.

36000

5. Closed Won

Percentage of opportunities that close as won.

22

Opportunities × Close rate.

—

Closed deals × Average deal size.

—

6. Waterfall Diagnosis

Overall conversion rate.

—

Which stage has the worst conversion? That's where you should focus.

MQL → SQL (35%) is the biggest leak. 65% of MQLs are rejected by sales. Root causes: (1) Lead scoring over-weights engagement (someone downloading 3 ebooks isn't necessarily ready to buy), (2) SDR follow-up time is too slow (leads contacted after 24 hours have much lower acceptance), (3) Some MQL sources (events) have lower intent than others (free trials). Fix: recalibrate lead scoring to weight intent signals (pricing page visits, free trial usage) more than content engagement. Set SLA: SDRs must contact MQLs within 4 hours.
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