# How to Implement Demand Waterfall Models for Lead Management
In the world of Australian B2B marketing, the gap between 'getting a lead' and 'closing a sale' can often feel like a canyon. Implementing a Demand Waterfall model—originally pioneered by SiriusDecisions—provides a structured framework to measure your lead flow, identify where prospects are dropping off, and align your sales and marketing teams around shared goals.
By following this guide, you will transition from simply counting clicks to managing a high-performance revenue engine that tracks every stage of the customer journey.
Prerequisites: What You’ll Need
Before we dive in, ensure you have the following ready:- A CRM System: Such as HubSpot, Salesforce, or Pipedrive.
- Marketing Automation Software: Tools like ActiveCampaign or Mailchimp.
- Historical Data: At least 3–6 months of lead and sales data.
- Stakeholder Buy-in: Your Sales Manager and Marketing Lead must be on the same page.
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Step 1: Define Your Waterfall Stages
The first step is to agree on the terminology. A standard Waterfall usually consists of these stages:- Inquiry: A raw lead (e.g., someone who downloaded a whitepaper).
- Marketing Qualification (MQL): A lead that fits your target profile (e.g., has an active ABN and works in a specific industry).
- Sales Acceptance (SAL): The sales team agrees the lead is worth a call.
- Sales Qualification (SQL): The salesperson confirms there is an actual opportunity.
- Closed/Won: The lead becomes a paying client.
Screenshot Description: You should see a funnel-shaped diagram in your CRM dashboard displaying these stages from top to bottom.
Step 2: Establish Your Ideal Customer Profile (ICP)
To move from an 'Inquiry' to an 'MQL', you need filters. Define what a 'good' lead looks like in the Australian market. Does the company need to have more than 10 employees? Do they need to be based in a specific state like QLD or NSW? Document these criteria clearly so there is no ambiguity between teams.Step 3: Set Up Lead Scoring
Use your marketing automation tool to assign points to leads based on their actions. For example:- Visiting the pricing page: +15 points
- Downloading a case study: +10 points
- Unsubscribing: -50 points
When a lead reaches a certain threshold (e.g., 50 points), they automatically transition from an Inquiry to an MQL.
Step 4: Configure CRM Lifecycle Stages
Open your CRM settings and ensure your 'Lifecycle Stage' property matches your Waterfall stages. Tip: In HubSpot, this is often found under Settings > Objects > Contacts > Lifecycle Stage. Ensure you enable the setting that automatically updates these stages based on deal creation.Step 5: Implement Service Level Agreements (SLAs)
An SLA is a formal agreement between Marketing and Sales. For example, "Marketing will deliver 20 MQLs per month, and Sales will contact every MQL within 4 business hours." This accountability is the 'glue' that holds the Waterfall together.Step 6: Create Lead Handoff Automations
Set up a workflow that notifies a salesperson the moment a lead becomes an MQL.- Action: Trigger an internal email or Slack notification.
- Action: Assign a 'Task' in the CRM for the salesperson to follow up.
Step 7: Track Conversion Rates Between Stages
This is where the magic happens. You need to measure the 'leakage' in your funnel. Calculate:- Inquiry to MQL % (Marketing effectiveness)
- MQL to SAL % (Lead quality)
- SQL to Close % (Sales effectiveness)
Step 8: Monitor Velocity (Time-in-Stage)
It’s not just about if they move through the Waterfall, but how fast. Track the average number of days a lead sits in the 'SAL' stage. If it’s more than 48 hours, your Australian sales team might be missing the 'window of intent'.Step 9: Conduct Monthly 'Waterfall Reviews'
Gather your key stakeholders once a month. Review the data: "We had 100 MQLs but only 5 became SQLs. Why?" This prevents the 'blame game' and focuses the team on fixing the specific break in the pipe.Step 10: Optimise Based on Data
If your MQL to SAL conversion is low, your marketing is likely too broad. Tighten your targeting. If your SQL to Close is low, your sales team might need more collateral or better handling of common Australian business objections (like 'budget cycles' or 'end of financial year' delays).---
Pro Tips for Success
- Don't overcomplicate: Start with 4-5 stages. You can add more (like 'Marketing Nurture') once you've mastered the basics.
- Use ABN Lookups: For Australian B2B, use tools that integrate with the ABR to automatically enrich lead data with company size and industry.
- Negative Scoring: Always penalise leads that use personal emails (gmail.com) if you are strictly B2B.
Common Mistakes to Avoid
The 'Black Hole': Sending MQLs to Sales without a feedback loop. If Sales rejects a lead, they must* provide a reason code (e.g., 'No Budget', 'Wrong Industry').- Ignoring the 'Nurture' Stage: Not every lead is ready to buy today. Ensure leads that aren't 'Sales Ready' are sent back to Marketing for long-term nurturing.
- Manual Data Entry: Relying on staff to manually change stages. Use automation wherever possible to ensure data integrity.
Troubleshooting
- The data looks wrong: Check if your CRM workflows are overlapping. Sometimes two different automations try to set the 'Lifecycle Stage' at the same time.
- Sales isn't using the system: This is usually a training issue. Show them how the Waterfall helps them find 'hot' leads faster so they can hit their commissions.
- Too many MQLs, no sales: Your lead scoring threshold is likely too low. Increase the points required to become an MQL.
Next Steps
Implementing a Demand Waterfall is a journey, not a one-time setup. Once your stages are live, focus on refining your lead scoring and tightening your Sales/Marketing alignment.If you need help configuring your CRM or building an Australian-centric B2B lead generation strategy, the team at Local Marketing Group is here to help. Contact our experts today to streamline your revenue engine.