Demand generation refers to any activity that drives awareness and interest in your product or service with the ultimate goal to create a predictable pipeline that will grow your business.
It’s an umbrella term that covers all your marketing and sales initiatives from every touchpoint in the customer’s journey–from initial prospect interest to upselling customers.
Demand generation today is no longer just about creating demand for sales. Demand gen isn’t about forcing demand or tricking people into buying things they don’t need. It’s about providing the right information to the right people at the right time so that what you’re sharing is the perfect fit for your ideal customers’ needs.
Many B2B marketing professionals use these terms interchangeably. But they’re not the same. Demand generation is a holistic process and long-term strategy that covers all stages of the customer journey from awareness and consideration to research and justification.
Lead generation is a subcategory of demand generation that has a narrow focus on the top of the funnel. The goal of lead gen is simple: Convert targeted audiences into quality leads. It involves collecting information from leads that can be used to qualify and nurture them into customers.
Content marketing for demand gen is used in a wider variety of ways than for lead gen. It tends to focus on brand positioning and awareness–ungated content works wonders here since it casts a wide net that will build website traffic.
Since you almost always want to generate both demand and leads, it’s a good idea to develop a demand generation strategy that includes lead gen tactics as well as tactics to provide information to these leads at each stage along the journey to becoming a customer.
Demand generation involves providing value to your ideal customers in the channels where they already hang out so they can become aware of your solution and learn how it can help them solve their unique problems. Focusing on your target customers’ problems helps you build genuine, lasting relationships built on trust and long-term sales success.
Sharing content that educates and inspires your ideal customers helps you build your brand authority and establish trust. Even if prospects aren’t ready to buy at this given moment, they’ll see you as the trusted source to meet their specific needs and keep you top of mind when they’re ready to make a purchase.
Specific and targeted demand gen activities allow you to focus on lead quality rather than just quantity. The more targeted your campaigns are, the higher-quality leads you’ll get. This also starts with having a clear understanding of who is your ideal customer profile (ICP). What types of people and businesses does your solution work best for? Once you can identify common traits among these people and businesses you can start to identify the places these people hang out both physically and online.
Measurable interest in your company can be converted into predictable revenue.
Customer-centric demand gen initiatives help you grow your business–revenue is the ultimate goal of demand gen and your most important metric to follow. Unfortunately, revenue is also a lagging indicator of how your demand generation tactics are actually performing. Depending upon your business model it may take from six months to a year for you to see the full performance of the demand you’ve generated for your business. While a critical metric to measure it is far from the only metric of measurements you should monitor to understand the performance of your efforts.
Especially within a B2B setting, making purchasing decisions can be difficult. Your target audience may also have to sell your solution to other stakeholders within their own organization. Sirius Decisions introduced the concept of a “Demand Unit”, which is the group of people within an organization that will have some level of influence over whether or not the organization purchases your solution. That’s why you want to ensure you are nurturing each member of the demand unit–like champions and buyers–with tailored messaging. Your future customers need to understand exactly how your solution can solve their unique problems.
Also, remember your future customers are not going to travel linearly through your marketing funnel. There will be times when your contacts will be in the research phase and then consume content you’ve created for the education phase and then hear right back down into more “justification” focused content. That’s ok. The proliferation of information available to buyers today has enabled this behavior more now than ever before. The most important thing we have to worry about is do we have content readily available in a place these people can easily access this information?
The traditional belief that marketing generates leads and sales closes them doesn’t match with the way modern B2B buyers prefer to engage with companies today. To be successful with demand generation, marketing and sales teams need to work closely together.
While there are marketers on marketing teams that have demand generation in their job titles, the job to create awareness of your brand and amazing customer experiences rests on the shoulders of your entire company. Content marketers should be creating content that your future customers will love to consume. Brand marketers should work to create a brand that people fall in love with and want to engage with. Product marketers, should position your product in a way that resonates with your market and helps them very clearly understand how your product will help to solve their pain.
How exactly can B2B and SaaS companies increase their reach and get people excited about their solutions?
Demand gen involves identifying, testing and implementing measurable initiatives for B2B growth. As always, your first step is to set clear goals. When planning your demand gen activities, keep the following points in mind.
Demand generation isn’t a pile of random tactics, but rather data-oriented activities based on your marketing strategy. To ensure effective campaigns, align your goals with your overall marketing and business objectives. Think about what stages within the funnel each of your campaigns is meant to influence. You can throw each of them into one of three buckets top of funnel (TOFU), middle of funnel (MOFU) or bottom of funnel (BOFU).
Where does your target audience hang out online? What specific touchpoints make up the entire customer journey? Generate strong demand by engaging your target audience through multiple platforms and brand touchpoints both online and offline, and before and after a purchase.
Demand generation isn’t about telling prospects how great your company is. It’s about empathizing with their problems and showing them how your solution can help solve those problems. It comes down to knowing your ideal customers and crafting your messaging to these specific people. It’s about your ability to showcase your business and the people who work for you as thought leaders in market. While at the same time, highlighting your experience with other companies that had similar problems to theirs that you made progress against.
Try to speak to everyone and you end up speaking to no one. Narrow down your leads and clearly identify segments so you can customize content and experiences for those specific segments and put people on different nurture tracks. By making personalization a priority at every step of the customer journey, you get people more engaged with your company. The key to engagement within any campaign is relevance, how can you make your campaigns as relevant as possible for every single person possible.
To turn leads into opportunities, your leads need to be high-quality. And for that to happen, there needs to be accountability for quality. Marketing should be responsible for the amount of revenue leads are forecasted to generate–not just the number. Ensure your team has a strong lead nurturing process in place to turn those high-quality leads into customers.
Every company needs to expand at some point. But instead of targeting every possible segment at once, test and refine one segment at a time. Especially if you don’t have a huge team, this approach works well and allows you to recreate your successes for other segments.
Demand generation can be conducted through a variety of multi-tiered activities. Here are some examples of demand gen initiatives you can put into practice.
Share the right content on the right channels with the right people. Great content marketing requires you to know your customers’ needs and share thoughtful content related to those needs. Content examples include guides, ebooks, whitepapers, blog posts, videos, webinars and podcasts. Remember that ungating your content can also improve your brand positioning and brand awareness.
Implement tactics to increase your search engine ranking and authority. For example, check your long-tail site traffic and optimize your content for these long-tail keywords. While these generally get low search volumes, they convert well because of the strong intent behind the search.
83% of business executives that choose a vendor on behalf of their company use social media in their decision making, according to Forbes research. When managing your social media accounts, focus on your customers’ challenges, share useful and relevant content, and create conversations with your audience to build trust. Think about how to engage your audience on social, what can you provide them with or ask them that will start a conversation?
Email is one of the oldest digital marketing tools out there, but it’s far from dead. Email marketing accounts for nearly 40 times more acquired customers than social media. To be successful with email marketing, personalization is key. You want your subscribers to feel like people–not just numbers on your list. Connect with your existing followers on a regular basis and send customized campaigns based on your contacts’ actions.
Content syndication is a great way to reach potential customers you might not otherwise have access to. Give your content a wider reach by republishing or linking to your content on third-party sites like Medium, Quora, LinkedIn and more niche publishers. Targeted campaigns are your best bet here to reach high-quality leads–create a focused outreach strategy for each piece of content you share.
Sales enablement assets like pitch decks, best practices, tutorials, case studies, testimonials, FAQs and demos help shorten the time from lead to close. When your marketing team supports your sales team with this type of content, sales reps can speak as experts on the topic and they’ll have a better chance to nurture the lead or close the sale.
Organic search is a relatively cheap traffic source that keeps on giving. But sometimes the best way to generate demand is by creating paid advertising campaigns for social or search. Paid ads help you build traffic and boost conversions quickly–as long as you have clear goals and are targeting a specific audience.
Lead scoring is a key piece of the demand generation puzzle. Assess the quality of your leads by evaluating all the actions they’ve taken while engaging with your brand. Assign higher points when a person’s online and offline behavior signals more sales readiness. It’s crucial to work together with your team to determine how many points a prospect will get for different actions.
Instead of pushing for the sale right off the bat, lead nurturing involves educating leads, building trust with them and responding to their needs. Provide relevant and targeted content according to where leads are in their journey. Think beyond email workflows, and also try adaptive website content, paid retargeting, social media and direct sales outreach.
Remember–demand generation extends through every touchpoint in your customer journey, including retention. Share exclusive offers and services with your customers, plan in-person events, identify upsell opportunities and offer renewals to keep your customers happy and reduce your churn rate.
Today’s buyers no longer want to wait for answers. If you can’t provide a fast enough answer to their question, they’ll likely slide right over to your competitors. Real-time messaging allows you to connect with buyers at the exact moment they’re browsing your site. Give prospects a more human sales experience by driving conversations through intelligent chatbots.
When measuring your demand gen efforts, skip the vanity metrics and instead focus on lead quality and the impact your initiatives have on your overall revenue. Here are a few examples of what metrics to measure.
Track the number of visitors who book a meeting with your sales team to either see a demo of your solution or have a discovery call with your sales team to hear more about how you can help solve their problems. Acquiring leads at the very top of the funnel is a leading indicator that your offers have appeal to your audience but if they are not leads that have any decision making power within their business they aren’t going to help you grow your business. Meetings booked with your sales team are a great leading indicator for the quality of the leads you’re acquiring.
Track the number of visitors who turn into leads–a top-of-the-funnel metric–then the number of leads who become opportunities. This gives you insight into the quality of your leads and whether your lead scoring system makes sense. Then measuring the number of opportunities that turn into paying customers tells you whether your demand gen campaign is bringing in real results.
Quick tip: If you’re using chatbots, don’t compare the conversion rates between a traditional landing page with a form against a chatbot. Instead, check the lead to opportunity conversion rate for leads that originate through your chatbot, and compare that against your overall lead to opportunity conversion rate for non-chatbot leads.
This metric represents the average value of each new customer in dollars. Divide the total amount gained from paying customers by the number of deals closed in a given time period. Tracking your average deal size helps you forecast revenue and helps you decide what types of customers you should target and prioritize. Understanding the average deal size of each of your channels can help you get to a more granular return on investment (ROI) for each of your channels.
Your sales pipeline value refers to the total number of every qualified opportunity in your pipeline. Simply calculate the estimated deal size for all leads in your pipeline. Measuring this metric allows your sales reps to check if they’re on track with their goals. You can also measure marketing’s contribution to the sales pipeline in percentage to measure your marketing’s team success. Understanding the amount of pipeline you attribute back to marketing will also help sales understand the percentage of total deals they need to source via outbound efforts as well.
Checking how many clicks you get on your CTAs is all well and good, but what really matters is whether your campaigns are generating revenue. Your cost per acquisition tells you how much you spent to acquire a single paying customer from a specific campaign. To calculate it, divide the total campaign costs by the number of customers acquired in the period where you spent that money. Another measurement of CAC also takes into account the marketing headcount to manage and create these campaigns as well. This all encompassing measurement of CAC is an important measurement for investors in how efficient your business is at acquiring new business.
Similar to the previous metric, track the cost per lead to see how much you spend on a lead by lead basis. Calculate your total campaign costs by the number of leads that came in. This tells you about your campaign’s cost efficiency and it’s a useful metric to discover how much you should expect to spend to keep your funnel full. Keep this metric in mind when planning new campaigns and calculating your demand gen ROI. You should have a clear cost per lead that you’re willing to spend so that you don’t spend more acquiring leads than you receive back in revenue. This measurement
How much will a customer spend over the total length of their relationship with your company? This metric is the average profit you can expect to make per customer. Calculate the average purchase value, then multiply that number by the average purchase frequency rate. This metric tells you how much you’ll earn for each new customer generated from your demand gen campaign. It also reveals how well you’re managing and engaging with your customers and whether there’s room for improvement.
How long does it take for a visitor to turn into a lead? What about from lead to opportunity? To find out, measure time to conversion for every stage of the funnel. This will tell you if a have a lengthy sales cycle or verification process. You can also measure your sales cycle length per channel to determine what channels aren’t worth pursuing, and which ones you should double down on since they provide better results.
It’s important to understand how long your sales cycle is because this will determine when you can expect to understand the full efficiency of each of your campaigns. For example, you will not see the full return on your investment for leads you generated 30 days ago if you’re average sales cycle is 60 days. You can measure these leads 30 days out using leading indicators of number of meetings booked and opportunities generated but you won’t have a full view of ROI until each lead has had 60 days to flow through your sales cycle.
This metric tells you how much revenue you earn from your campaigns. To calculate it, take the money generated from a campaign, subtract the marketing costs then divide that number by the marketing cost. This is your most important metric to measure your company’s profitability.
Demand gen benchmarks from the 2019 Demand Gen Report show how much companies are investing in demand gen, what they’re prioritizing and the impact it’s having on their B2B marketing initiatives.
Fuel your demand gen strategy with these useful tools and technologies.
Customer relationship management (CRM) software allows you to collect and manage leads from your demand gen activities. CRM is a given for B2B SaaS companies as it helps you build better relationships with prospects and customers. You get all the data and information you need about them in one place, and you can store every interaction you have with them in an organized way.
Marketing automation systems are key growth drivers for businesses. They allow you to run email marketing campaigns, social media campaigns and other marketing automations from one central platform.
Pretty much every company with a website uses Google Analytics. Leverage Google’s tools to understand your site visitors’ online behavior, set conversion goals and monitor your progress. Keep your top-performing content and most valuable traffic sources top of mind whenever you’re planning new campaigns.
Use a conversational marketing platform to generate more qualified leads, speed up the sales cycle and make buying a lot faster for your customers. Incorporate conversations into your website by setting up a chatbot on specific pages and by trying out Conversational Landing Pages.
Testing different tactics and any changes you make to your website is a key part of demand generation. Tools you might already be using like Google Optimize or Optimizely allow you to run A/B tests on your landing pages and email campaigns. Other A/B testing tools include Google Content Experiments, A/B Tasty and User Testing–which allows you to get feedback on your website, product or service from a test audience.
Heatmapping tools like Hotjar examine your site visitors’ real-time behavior. By seeing what’s working and what needs improvement, heat mapping helps you make strategic changes to your CTAs, messaging, design and other site elements to boost conversions.
Lead scoring tools are often part of marketing automation software like Salesforce and Marketo. Automating this process ensures your marketing and sales teams are on the same page. Plus, it makes it easy for your sales reps to know who to reach out to and when.
Data augmentation tools fill in the blanks of your existing data sets. Let’s say for example you only collect someone’s email address through a chatbot. Data augmentation can add in any missing names, phone number or demographic info to your marketing data. You can even get data about the technology these accounts use where you might offer great integrations or alternatives. This information will then help you send personalized messages to leads down the line.
Ready to drive more leads, book meetings faster and generate more revenue for your company? Drift is the world’s first and only conversational marketing platform that helps you do just that. Built for marketing and sales professionals, our mission is to turn the internet into a conversation. Don’t make your ideal customers wait–talk with them when they want to engage with you and give them a fast line to your sales team.