At our B2B Summit North America this spring, we introduced the Forrester B2B Revenue Waterfall™. It provides the insights that all revenue engine functions — marketing, sales, and customer engagement — require for planning and measuring progress against the opportunities that make up a B2B revenue plan.

While this new version of the Waterfall includes many important enhancements, we are homing in here on the top of the Waterfall, which now has a “targeted” stage with two layers. Targeted accounts comprise the set of accounts that should contain one or more targeted opportunities. Targeted opportunities form the basis of revenue acquisition goals, and are one of four opportunity types: acquisition, renewal, upsell, and cross-sell.

This targeted stage at the top of the Waterfall is critically important in aligning marketing, sales, and customer engagement on where the opportunities are to be pursued across the Waterfall. No amount of great selling, demos, awesome content, delivery channels — or even great sales reps — will matter if you are going after targets that are fundamentally the wrong fit for what you’re selling. Use data and insights to develop the most accurate list of target accounts and opportunities, because data matters. It matters a lot. In fact, Forrester has found that businesses implementing advanced data-driven business capabilities are nearly three times more likely to experience double-digit growth than organizations that are still in the beginner stages.

Economic benefits accrue to organizations that are aligned across the revenue engine — with functional plans that work together to drive corporate revenue goals. Joint targeting is one critical area of alignment that should occur during each annual planning cycle and can have a big impact on win rates, cycle times, average deal sizes, and the creation of balanced sales territories and rep level quotas. Marketing and sales operations should take an active role in an insights-driven strategy and collaborate jointly to identify targeted accounts and opportunities. This helps define the coverage focus for both functions.

While any targeting approach should be data-driven and granular, there is a multiplier effect when sales and marketing align together, creating the most comprehensive, accurate, and specific insights. There are six capabilities that we know are pivotal to doing this:

  1. Market segmentation and sizing. Divide the total market into discrete groups based on verticals, geographies, and company size.  Conduct a top-down market analysis to calculate the market potential for your offerings. Total addressable market analysis works well for a three-year roadmap, but service obtainable market — the market you can realistically expect to obtain in the coming year given resources and competitive pressures — is the optimal sizing approach when selecting targets for the coming year.
  2. Market fit. Prioritize segments by market attractiveness and ability to win. Assess external factors like key trends, expected category spend, and competitive presence. Assess internal factors that correlate with the ability to execute, including things like domain knowledge, sales readiness, and solution viability.
  3. Account fit. Use the best available account data and sales history to build an ideal customer profile. Leverage ideal customer profile criteria, which are nuanced and unique to your product, to score and rank accounts for marketing and sales coverage.  Examples include the age and location of a target’s assets for a vendor selling asset management software, or the number of hospital beds for a healthcare target. Prioritize those accounts and buying centers that have the highest upside revenue potential, while taking a lighter approach to those scoring lower.
  4. Account opportunity. Calculate the opportunity potential for each account by regression analysis or modeling with historical pipeline or sales data based on the account fit profile. Determine the number of opportunities within each account, the associated expected deal size, and average win rate.
  5. Coverage strategy. Once you have clearly mapped your opportunities and potential spend by account compared to the share of budget captured, you can develop the appropriate account strategy. For each account, consider: Is it an acquisition target or an existing customer with expansion potential? Is the goal to protect and retain share? Define the sales and marketing coverage strategy.
  6. Dynamic territory management. Where the power of data really comes to life is in the ability to react dynamically, reprioritize accounts, and optimize territories based on changing conditions — whether that includes mergers and acquisitions activity, intelligence about new initiatives in an account, or a wide range of other buying signals such as engagement on your website or your competitor’s site.

Starting strong at the top of the B2B Revenue Waterfall with an insights-driven and aligned approach to targeting is the key to driving more opportunities from target to closed-won revenue.  Take the opportunity to be far more granular and precise about who has bought your wares in the past, who is likely to buy them in the future, and how much those opportunities are likely to be worth to you. When marketing and sales act on that knowledge together, that’s when the magic truly happens.