Funnel cohort reporting is critical for marketers to understand exactly what is causing revenue generation. The concept of cohort reporting isn’t new to marketers. The campaign object in salesforce is a way to assign leads to a cohort and evaluate progress. SaaS marketers cohort their monthly lead to new customers routinely. But there are many other ways cohort reporting should be used especially in more complex sales cycles.

There are five different types of cohort reporting you might consider. Each cohort should be thought of as a weigh station on the greater customer journey from lead to deal to expansion. You can certainly do one giant cohort from lead to deal, but timing, data cleanliness and other issues will make that cohort less useful unless you operate an extremely simple and quick sales process. Most B2B journies involve multiple steps in the process with some steps dominated by digital behavior while other steps are dominated by human interactions.

The five cohorts are listed in the above diagram. Each cohort represents a group of prospects as they enter the next stage of the journey. For each stage, there are always “other” sources to the top of that stage as marketing is not the only source to a pipeline stage. For example, the opportunity creation cohort might have opportunities that came from the business development team scheduling a meeting that was sourced from a marketing lead. Or the opportunity creation cohort might have an opportunity from a bluebird lead without an identifiable source. The combinations are many.

Each of the five cohorts tells a different story. The five cohorts are:

• lead cohorts – from lead creation to disposition as a meeting or opportunity or even a deal. However far you can measure comfortably, lead cohorts may give you the ultimate read on how well you are doing creating pipeline. “May give” is the operative word, as all kinds of factors, humans among the top one, can influence how far down the sales funnel you can accurately measure your lead cohort which is my other cohorts are as important.
• pre-opportunity cohorts – many companies use intermediate checkpoints like meetings, demonstrations, trials that sit between a lead getting created and an opportunity. Marketing qualified leads and sales qualified leads could also be checkpoints that are pre-opportunity. These pre-opportunity cohorts might have been created by recent leads or might not. For teams with business development representatives, getting meetings or demonstrations set up are their key goals. The source of these meetings might not be your leads. Knowing what is happening in this cohort is critical since ultimately this is the first time sales touches your leads.
• nurture cohorts- leads drop into nurturing and hopefully with work resurface somewhere. Organizations can spend tons of time fine-tuning nurture streams such as Marketo or other marketing automation system. The question is whether it works. Watching your nurture cohort should provide the answer.
• opportunity creation cohorts – once opportunities are created, what happens to them? Where did the opportunities come from? How many get created in a given time period, and over time, what was the close rate? Following these statistics will help spot decreasing close rates, overly zealous opportunity creation rates and other outliers.
• deal cohorts – unlike the other cohorts which start at the creation date, a deal cohort looks backward to explain where the closed deals came from. Deal cohorts should be explainable from month to month in terms of deal age, mix, and size. Growth will cause some of these variables to change, but the changes should be slight on month to month basis. Looking at customers are deal cohorts also provides an expected expansion model.

Each of these cohorts –

• tells you something different, hence drives the sales cycle and actions differently
• is measured differently
• has its own drill downs and derivations. You might want to look at the lead cohort by region, or by source, or source and region. Your ability to drill down is only limited by the tools you are using for the analysis
• has its own quality scoring methods. Quality scoring is critical. If you want to measure the lead cohort, for example, all the way to deal, but only 25% of your deals actually have leads associated with them, then the quality of your cohort information will be low. Similarly, if you are trying to understand the opportunity creation cohort, but most opportunities are only opened when they know they will be closed won, then that cohort won’t have high quality
• has there own unique yield curves. Leads, for example, might yield meetings within the same quarter. Opps created, however, might not close for several quarters, but beyond three quarters, opportunities are unlikely to close. Understanding the yield curve as a function of time is useful for predicting the future.

In our next blog, we will dive into these cohorts in greater detail. You could say we will cohort each of the cohorts.