What Is Demand Waterfall?
A framework that maps the stages leads pass through from inquiry to close.
The Demand Waterfall, originally developed by SiriusDecisions (now Forrester), is a framework that defines the stages a lead passes through from first touch to closed deal. It standardizes the language and handoffs between marketing and sales so both teams can measure the same funnel.
The classic waterfall stages are: Inquiry, Marketing Qualified Lead (MQL), Sales Accepted Lead (SAL), Sales Qualified Lead (SQL), and Close. Each stage has defined entry criteria, exit criteria, and an owner. Marketing owns the top stages, sales owns the bottom, and the handoff points are governed by SLAs.
The waterfall model has evolved over the years. The original version was purely lead-based. Newer versions incorporate account-based signals, adding stages like Target Demand and Active Demand that acknowledge that B2B buying involves multiple stakeholders at the same company.
For demand gen teams, the waterfall provides the measurement framework. You track conversion rates between each stage, identify bottlenecks, and optimize accordingly. If your MQL-to-SAL conversion is 60% but SAL-to-SQL is only 15%, the problem is not lead generation. The problem is qualification criteria or sales follow-up.
Frequently Asked Questions
What are the stages of the Demand Waterfall?
The standard stages are Inquiry, Marketing Qualified Lead (MQL), Sales Accepted Lead (SAL), Sales Qualified Lead (SQL), and Close. Some organizations add stages like Target Demand and Active Demand for account-based models.
Who created the Demand Waterfall?
SiriusDecisions (now part of Forrester) created the original Demand Waterfall framework. It has gone through several revisions, with the most recent versions incorporating account-based demand concepts.
Is the Demand Waterfall still relevant?
Yes, but it has evolved. The core principle of tracking conversion rates between defined stages is still the foundation of demand gen measurement. Modern versions are more flexible and account for multi-threaded buying processes.