How to Build and Use a HubSpot Leads Waterfall Chart

Every marketing team using HubSpot needs a clear, visual way to understand how leads are moving through the funnel. A leads waterfall chart gives you that view, showing how inquiries turn into qualified leads, opportunities, and customers over time.

This how-to guide walks you step by step through creating, reading, and optimizing a leads waterfall based on the classic HubSpot framework, so you can track real performance and forecast revenue with confidence.

What Is a HubSpot Leads Waterfall?

A leads waterfall is a time-based chart that shows the flow of leads through your funnel for each month, from initial inquiries down to closed customers. In a HubSpot context, it connects marketing activity with sales results so everyone can see the impact of campaigns over time.

Instead of only looking at monthly totals, the waterfall lets you see:

• How many new inquiries you generate each month
• What percentage convert to qualified leads
• How those leads progress into opportunities and customers over later months
• Whether you are on track to hit future revenue goals

Because leads usually close in months after they are created, this waterfall view is far more realistic than a simple month-by-month report.

Core Stages in the HubSpot Waterfall Model

Before you build reports, define a simple, consistent funnel. The classic HubSpot waterfall model uses four core stages.

1. Inquiries

Inquiries are the raw hand-raisers entering your database. Examples include:

• Form submissions
• Content downloads
• Event or webinar signups
• Trial or demo requests

In a CRM like HubSpot, these usually map to new contacts created from marketing channels.

2. Marketing Qualified Leads (MQLs)

MQLs are inquiries that meet your agreed marketing criteria and are worthy of sales follow-up. Criteria can include:

• Fit (company size, industry, role)
• Engagement (visited pricing page, multiple sessions)
• Explicit interest (requested a demo, asked for pricing)

HubSpot typically flags these with lifecycle stages or lead scoring rules that move a contact from inquiry status to MQL.

3. Sales Opportunities

Sales opportunities are deals in the pipeline that have been qualified by sales. They should have:

• A defined need or problem
• A potential budget or timeline
• A clear sales owner in the CRM

In HubSpot terms, these are deals created in a specific pipeline stage after sales accepts the MQL.

4. Customers

Customers are closed-won deals. For the waterfall, you want to know:

• How many customers originated from each month’s inquiries
• How long it took them to close
• What the conversion rate was from inquiry and MQL

By tracking these four stages month over month, you get the waterfall view of your marketing and sales engine.

How to Build a HubSpot Leads Waterfall Step by Step

Follow this process to create a practical waterfall chart based on the original HubSpot methodology, even if you are building reports outside of the native reporting tools.

Step 1: Define Time Periods

Start by picking your time intervals. Most teams use months because sales cycles usually span multiple months:

• List the last 12 to 18 months as columns
• Include the current month and a few future months for forecasting

Keep your time frames consistent across all funnel stages.

Step 2: Capture Inquiries by Month

For each month, record how many new inquiries you generated. Pull this data from your marketing system or HubSpot contact reports.

• Count only net new names created that month
• Exclude internal test contacts and duplicates

This row is the top of your waterfall and drives all later calculations.

Step 3: Map Inquiries to MQLs

The next step is to track how many of those inquiries became MQLs, and in which month. For each inquiry month:

1. Look at all contacts created in that month
2. Count how many reached the MQL stage, broken down by the month they became MQLs

This creates a diagonal pattern across your chart, showing how inquiries from one month mature into MQLs over later months.

Step 4: Track Opportunities from MQLs

Repeat the same approach for opportunities:

1. Take all MQLs that originated from each inquiry month
2. Count how many became opportunities, by the month the opportunity was opened

On the waterfall, you will see which inquiry months are producing strong pipelines later in the year.

Step 5: Track Customers from Opportunities

Finally, track customers using the same structure:

1. For each inquiry month, find the related opportunities
2. Count how many of those turned into customers, grouped by the month they closed

Now you can see exactly how long it takes for leads from a specific month to result in revenue.

Step 6: Calculate Conversion Rates

Once your data is in place, calculate conversion percentages for each inquiry month:

• Inquiries to MQLs
• MQLs to opportunities
• Opportunities to customers
• Inquiries to customers (overall lead-to-customer rate)

In a HubSpot-style waterfall, these rates help you quickly compare the health of each cohort of leads.

How to Read a HubSpot Waterfall Chart

With your chart built, the next step is learning how to interpret patterns so you can improve performance.

Spotting Healthy Lead Cohorts

Healthy months usually show:

• Strong inquiry volume
• Stable or improving conversion rates at each stage
• Reasonable time to close (no extreme delays)

When you see several strong months in a row, you can be more confident about future revenue.

Identifying Conversion Problems

Look for months where the waterfall weakens as leads move down-funnel. Warning signs include:

• High inquiries but low MQL rates (poor lead quality or weak qualification rules)
• Good MQL volume but few opportunities (handoff issues or slow follow-up)
• Plenty of opportunities but low close rates (positioning or pricing problems)

A HubSpot-style layout makes it obvious where to focus your optimization work.

Forecasting with the Waterfall

Because the chart shows how past cohorts have behaved, you can forecast using historical patterns. For each new month of inquiries, apply:

• Average conversion rate from inquiry to customer
• Average time to close from first inquiry

This lets you build a simple forward-looking revenue forecast tied directly to marketing performance.

HubSpot Best Practices for Managing the Waterfall

To keep your leads waterfall accurate and useful over time, follow these ongoing practices derived from the original HubSpot guidance.

Align Marketing and Sales Definitions

Ensure both teams agree on:

• What qualifies as an inquiry
• Exactly when a contact becomes an MQL
• What criteria define an opportunity
• When a deal is truly closed-won

Without shared definitions, your waterfall will be inconsistent and hard to trust.

Maintain Clean Data in Your CRM

Your waterfall is only as good as your data. Regularly:

• Deduplicate contacts and companies
• Close out stale deals
• Standardize lifecycle stages
• Review lead scoring rules

Teams using HubSpot should schedule monthly data hygiene reviews so the waterfall remains reliable.

Review the Waterfall Monthly

Set a recurring review with marketing and sales leadership to:

• Compare this month’s cohorts to historical averages
• Spot early signs of pipeline gaps
• Adjust campaign plans and budgets

Use the chart as a shared single source of truth, not just a reporting artifact.

Learn More and Apply the HubSpot Method

The original framework for this leads waterfall approach comes from a classic article on the HubSpot blog. You can read it in full here: The One Graph Marketers Should Update Daily: The Leads Waterfall.

If you want expert help implementing a waterfall reporting system and aligning it with your broader digital strategy, you can also work with a specialized consulting partner like Consultevo to refine your analytics, dashboards, and CRM setup.

By adopting this HubSpot-style leads waterfall, keeping definitions tight, and reviewing the chart every month, you create a powerful, shared view of how marketing and sales performance translate into predictable revenue growth.

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