Marketing’s raison d’etre is to generate leads for sales so the sales team can turn those leads into customers. Filling the sales pipeline with marketing qualified leads (MQLs) is an ongoing challenge for most marketing organizations. This challenge is further magnified when you capture the handraisers and now you are in the dreaded diminishing returns curve where it gets tougher to generate every additional qualified prospect. This is where Demand Generation as a function kicks in.
Now, marketers can get creative as to how they define Demand Generation, but the simplest way is to think about Demand Generation in terms of “using targeted marketing to increase awareness of a company’s products/services.”
What is Demand Generation?
Demand generation as a function has its genesis in B2B technology companies. Since so much focus is placed on new promising software companies (products) where no one has heard of their product in the marketplace, creating demand ensures quicker product adoption in terms of new users to their platform. The idea, of course, is on driving qualified leads and turning them into viable prospects. Then, those leads hopefully get converted into sales opportunities.
The reason is the sales team can hunt and create opportunities for themselves, but they cannot actually generate the demand, so demand generation falls in the hands of marketers.
Keep going with Demand Generation Case Study
Learn how one technology company got outsized returns on their marketing investment by leveraging content marketing as part of their Demand Generation initiatives.
Customer Acquisition with Demand Generation
B2B companies acquire new customers in two ways – either through capturing the existing demand or generating new demand in the marketplace. Capturing demand means targeting those customers who are already in the market looking for a product or service like yours. That segment of the market knows their pain points and hence they are called handraisers. But as an organization you simply cannot scale your revenues if you rely on handraisers, so to capture a bigger market share you have to generate new demand in the marketplace. One can find many exemplary examples of generating new demand like what Salesforce did in the on-demand CRM space or DocuSign in the esignature space.
As marketers, we have to run customer acquisition programs with both capturing and generating demand tactics to scale revenues and balance our blended Customer Acquisition Cost (CAC).
Inbound and Outbound Demand Generation Program
As they say, the game never changes ― only the players do. The same way the fundamental marketing concept does not change but just the terms and the channels do. In the last century, we had the classic Pull and Push marketing tactics which we now call Inbound and Outbound marketing.
Now, I am not a big fan of the term “inbound” marketing but that’s just a term that the founders of HubSpot, Dharmesh Shah and Brian Halligan, came up with as their marketing differentiator in the early days of HubSpot. Great job by both of them in popularizing this term which has now become a part of our marketing lexicon.
Inbound Marketing (pull)
Should be part of our marketing tactics employing tactics like search engine optimization (SEO), paid search, blogs, email and any other marketing tactics where you pull people into your website or your mobile app.
Outbound Marketing (push)
Outbound is essentially when you hire someone like a telemarketer, a SDR (sales development representative) or a BDR (business development representative) who makes 40-50 dials a day. An outbound sales program helps to push products or services and does not wait for prospects to come to you.
The other great example when it comes to outbound demand generation is going to a conference and getting a booth. PR is another example where you’re actually pushing things out.
Ideally, you have to capture both inbound and outbound to create a cohesive demand generation program. Now for both sides, there is one caveat. Outbound demand generation programs like renting a booth is expensive, so it puts a big dent in your marketing budget. On the other hand, inbound, which is the pull marketing (SEO, content) is somewhat free but is slow and takes time to build. But just like most things in life, to create sustainable results takes persistence and takes time. No shortcuts!
Demand Generation with Digital Marketing
Over the past many years I have worked with many B2B technology companies to design their Demand Generation programs by leveraging digital marketing. Digital marketing can be a cost effective channel for driving efficient customer acquisition programs with a primary focus on Organic, Paid and Owned marketing tactics as described below:
1. Organic Marketing
Organic marketing is a great to capture handraisers and can also be the most cost efficient. Some of the top organic digital marketing tactics include Search Engine Optimization (SEO), Content marketing, and building a solid social media community. These tactics usually take time to build and companies need processes, systems and best practices in place but the returns outsize the efforts resulting in some of the lowest CAC’s.
2. Paid Marketing
Now, like most things it is easy to throw money at and buy traffic and paid marketing is just that. Most companies usually start with paid marketing (wrong strategy but that’s a post for a different day!) to ramp up demand but the high Customer Aquisition Cost (CACs) can get out of control if not blended well with organic marketing tactics. Paid marketing includes Paid Search, Social Advertising, Display ads and other pay-to-play tactics.
3. Owned Marketing
Owned tactics are company assets built over time like email subscriber lists, content pieces and community members. These are known as owned marketing pieces as you own those assets say like a subscriber list. The other piece of owned marketing are content assets you create like webinars, videos, ebooks, infographics, research studies, etc. Again, all content you create is your company assets and that becomes the core of your owned marketing piece.
4. Digital Infrastructure with Marketing Automation
When you run a demand generation program, you need a good marketing automation platform. There are many marketing automation platforms to choose from including Marketo, HubSpot, Eloqua, Pardot, SharpSpring, etc. Marketing automation essentially acts as the foundation of the infrastructure of your digital demand generation tactics. A solid automation platform can also act as a central nervous system to your marketing activities.
Don’t Hesitate to Adapt to These Demand Generation Strategies
In a company-wide memo before the launch of Slack, co-founder Stewart Butterfield wrote, “We don’t sell saddles here.” These words were the building blocks that made Slack one of the fastest growing B2B startups of all time. The real reason for Slack’s astronomical growth was great B2B demand generation.
As technology continues to advance and with information always at our fingertips, prospects and customers are becoming more demanding. With the right demand generation activities, you can ensure increased visibility, higher engagement rates, and an improved sales pipeline.
Remember, the strategies discussed in this blog are just a baseline. Your B2B demand generation efforts depend on your goals, marketing budget, and the skills of the marketing partners you work with.