The Lead Waterfall: How to measure your pace to goals (and what to do when it’s going wrong)

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Lead Waterfall

Analytics plays a pivotal role in your SaaS marketing. As a SaaS startup, you forecast your growth and the number of leads to acquire in a given period. It not only helps you to keep things on track but also ensures optimal growth through proper goal-setting. 

But the problem is, that your growth and sales goals are not always met – especially in B2B SaaS marketing. Most businesses struggle to meet their targets, and some even outperform them. Both scenarios depict improper planning and forecasting. 

The mismatch between the SaaS marketing goals and actual results can happen due to multiple reasons. If your goals are set by the finance/strategy team and your marketing team only implements them – there will be a mismatch. The same mismatch can happen if you do not take into account the seasonal factors and their impact on your customers’ buying behavior. 

You can solve the first problem by having their (marketing departments, who bring in the leads) say in the forecasting/planning. The second reason, which is also more common and severe, can be solved through a Lead Waterfall. 

In this guide, we will explore the top reasons why SaaS companies can not meet their targets and what Lead Waterfall can do to improve them. 

Reasons why it goes wrong

Before we move ahead with the solution, we must understand the problem itself. Arriving at the reasons behind the phenomenon will help us solve it ASAP. There are two fundamental reasons why most SaaS companies fail to meet their targets; 

  1. The forecasts are made by teams who do not have their skin in the game. A team who sets the targets should be the team who meets them. But in typical company structures, revenue targets are set by finance teams – but if they are not met, marketing/lead gen teams are held accountable for that. If your finance team sets up your revenue targets, taking the marketing team into account for not meeting those targets will not make sense. 
  2. While forecasting revenues or MQL/SQLs, most SaaS companies do not account for public holidays, summer and Christmas holidays, and other dry months. Remember, all months are not equal! 

These two are the main reasons there is a mismatch between sales targets and actual results. In B2B companies, the second reason (the inability of the company to account for varying months) is more prominent. Because, businesses do not spend or make any transactions during holidays, unlike individuals. 

To help SaaS companies solve this problem of incorrect forecasting – the concept of Lead Waterfall has emerged in the marketing landscape. 

The Lead Waterfall 

The Lead Waterfall is a graphical representation of your pace to goals. It tells you how are you performing against the goals that you set for yourself.

Lead WaterfallThe green line shows your actual performance and the dotted line shows your goals. The picture above is a lead waterfall which helps you visualize your actual performance against the goals.  The graphical representation was created using Databox – an online analytics platform. 

With the help of this Lead Waterfall, you can see and identify the months/times of the year where you outperform or underperform. It gives you a holistic view of your performance over the period to identify anomalies. 

What to Do When it’s Going Wrong? 

The first case, which is more common, can be that your SaaS company is underperforming. The goals you set are higher than your actual results. In cases like these, most SaaS companies increase their budget, burning more money. Therefore, whenever this happens, you should: 

  • Assess the situation carefully, and see if it is happening due to environmental factors. Christmas, Summer holidays, and other vacations are periods when there is usually a low business activity. And, as a B2B SaaS company, it is okay to see a decrease in revenues. If you rush and increase your budget at such times, it will only be a disaster. 
  • If there is no such ‘Special” occasion, then the problem is with forecasting. We recommend changing the structure and getting more say from the marketing team in forecasting – if there’s little involvement. And, everything is according to the right estimates of the right team – it is time to increase the budget. 

When deciding to increase your marketing budget, be mindful in planning and forecasting the results. Relying on historical data and expecting a percentage increase/decrease is not always a good idea in B2B SaaS. You need to assess the competition and see where the market is headed. And, increasing the budget doesn’t mean only increasing the ad spend – it means improving your content game, rebranding if necessary, and making all the required adjustments. 

When analyzing your Lead Waterfall, another scenario that might pop up is that your goals might be lower than your actual results. In other words, you might be outperforming your goals. When this happens, be sure that there is a slight problem with your forecasting. It seems like a blessing to go beyond your goals, but in retrospect, it means that you fail to identify opportunities. Therefore, if you face it, try changing the way you forecast your revenues. Opting for a data-driven approach might help. 

A Final Word

The Lead Waterfall does not provide you guidelines to act and solve your revenue problems. It helps you evaluate your performance against your goals. If you are outperforming, you might want to consider changing the way you forecast. If you are below your goals, you might want to consider changing your marketing budget AND changing the way you plan. 

Whatever approach you take or the results you get, it is essential to stay proactive. In this cut-throat competitive market, if you are not proactive – the chances of failure are way higher. 


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