Revenue Waterfall

The revenue waterfall is the common language for how leads become revenue. Originally developed by SiriusDecisions (now Forrester), it standardizes the stages a prospect moves through so that marketing, sales development, and sales all agree on definitions, handoff criteria, and conversion benchmarks at each step.

Without a shared waterfall, you get the classic argument: marketing says they sent 500 MQLs, sales says they got 200 usable leads, and nobody can agree on what happened to the other 300. The waterfall eliminates that by defining exactly what qualifies a lead to move from one stage to the next.

Standard Waterfall Stages

• Inquiry: Any form fill, content download, or hand-raise. Raw volume, unqualified.
• MQL (Marketing Qualified Lead): Meets lead scoring threshold for fit and engagement. Marketing says "this one's worth sales attention."
• SAL (Sales Accepted Lead): Sales reviews the MQL and agrees to work it. This is the accountability handshake between marketing and sales.
• SQL (Sales Qualified Lead): Sales has had a conversation and confirmed there's a real opportunity. Budget, authority, need, and timeline validated.
• SQO (Sales Qualified Opportunity): Formal opportunity created in CRM with a dollar value and close date. Now it's in the pipeline.
• Closed Won: Deal signed. Revenue recognized.

Why RevOps Owns This

RevOps is responsible for defining each stage, setting the conversion criteria, measuring stage-to-stage conversion rates, and identifying where the waterfall leaks. A 50% MQL-to-SAL acceptance rate might mean marketing's scoring model is too loose. A 20% SQL-to-SQO conversion might mean reps are qualifying too early. The data tells you where to intervene.