Search engines are the first step in 68% of online experiences, and some of that will transform into customers. Suppose you want to get more from your SEO strategy, drive long-term engagement, ensure high-quality leads, and capture demand. Demand generation might be the right marketing strategy for your business.
Demand generation is not just about creating demand for your product but a holistic strategy that starts with your customer's problems and needs. It encompasses a wide range of marketing activities that lead to lead generation, satisfied customers, shorter sales cycles, and overall growth. Let’s take a deep dive into what is demand generation marketing.
What is Demand Generation?
Demand generation is a marketing strategy focused on strategic and customer-centric brand building that is based entirely on understanding customers’ core problems and needs and concentrating on providing value around those topics through content and the product directly.
Demand gen strategy starts with a laser-focused view of the target audience. This means defining a buyer persona/ideal customer profile and understating their needs and pain points. You can use a Jobs-to-be-Done framework to discover this information and leverage this knowledge to create highly relevant content. Depending on your customer's needs, you can define topics that bring them the most value.
In general, several high-level goals can be achieved through a successful demand generation strategy:
- Guide prospects through the five stages of awareness (unaware, problem aware, solution aware, product aware, most aware)
- Optimize the quality of leads, thereby helping sales close deals
- Build trust and credibility, especially in B2B contexts where buyers don't impulse buy, but there is a certain risk in decision making
- Capture existing demand
- Speed up the sales process
Demand generation is adopted by both B2B and B2C companies, with a couple of crucial differences. Besides the type of content and platforms where it’s distributed (based on the unique characteristics of buyer personas/ideal customer profiles), B2B sales cycles tend to be longer because many people participate in decision-making.
Despite similar names, lead generation and demand generation are different. Simply put, demand generation is used to guide prospects through stages of awareness through content, making them educated and interested in their problem and aware of solutions. Lead generation then converts the interest and awareness into leads that a sales team can follow up with.
Finally, demand gen is a strategy with a unique mindset behind it. It assumes that most of the market is currently not able to buy. Instead of trying to force conversions in this segment, demand gen marketers focus on creating different types of awareness (problem, product, brand) so that when these customers are in-market, they will reach out to sales.
What Are Demand Generation Strategies?
Create Awareness Among Your Target Audience
After defining buyer personas/ideal customer profiles, you will deeply understand what they know and need. These insights will aid you in creating content to guide prospects through the five stages of awareness. Prospects can be:
1. Unaware - no awareness of the need or desire to solve a problem
2. Problem aware - awareness of the problem, but no knowledge of a solution
3. Solution aware - awareness of the fact that solutions exist, but no awareness of a specific product
4. Product aware - awareness of the product but missing pieces of information on how it works or what it does
5. Most aware - aware of the product and all its characteristics but haven’t made a purchase yet
You can guide target audiences through these stages with a carefully constructed content strategy. Each piece of content will talk to the audience at a particular stage to get them to the next stage. This ensures constant communication with the target audience and relaying a message they can understand at the right time. This has proven to be the most effective. The audience that has just become aware of their problem is not ready to convert and make a purchase. Therefore, it doesn’t make sense to talk to them about your specific solution until they learn more about solutions in general. Content can and should be used to educate about the problem, the solution, and your particular offer later in the funnel.
Optimize Lead Quality
We mentioned optimizing the quality of leads as a high-level demand gen goal. “Optimizing” in this context means educating your buyer as you do in a demand gen strategy. This leads to them making an informed and intent-based decision to request a demo, for example, instead of "going in blind" when forcing conversion through lead gen tactics. If your leads are educated on their problem and adequately informed about all aspects of a solution to that problem, sales will be more successful when closing deals.
There are already people aware of their problem and actively looking for a solution, an existing demand you need to take advantage of. The content you choose to put out to capture existing demand will focus on solution education and various marketing activities such as SEO for solution-related keywords, PPC, email, and remarketing campaigns. Also, consider building a social community to provide value to the audience.
At this stage, prospects would benefit from more information about solutions which can come in various formats such as guides, how-tos, whitepapers, etc. Offering a free resource in exchange for an email address is a valuable tactic to get access to potential customers and deliver product-specific messaging to them later on.
Get Sales and Marketing to Work Together
Demand generation is an ideal strategy to de-silo your company and bridge the gap between the marketing and the sales department. One of the biggest goals for 42% of demand generation marketers is aligning marketing and sales.
Instead of working independently and often in contrast, marketing and sales should be aligned strategically. Marketing can help sales by providing the appropriate language and a way to discuss your product/service in more detail. Besides working on top and middle-funnel content, the marketing team can produce product-specific content and share it with sales. The marketing team is vital to ensuring high lead quality, making the sales team’s job significantly easier. If marketing and sales are aligned, this will be evident from improving core sales KPIs like sales cycle length, win rates, pipeline velocity, ACV, etc. Feedback from sales is then cycled back to marketing to improve targeting and messaging further.
Account-Based Marketing for B2B Demand Generation
A particularly effective strategy in B2B demand generation strategy is running account-based marketing campaigns. The reason behind that is that this strategy focuses on a very narrowly-defined audience. If we circle back to how any demand generation strategy is developed, we will see that an in-depth understanding of the audience is key. The narrower the audience, the more you’ll be able to define the buyer persona in detail and be very precise. More precision equals a better ability to tailor the message.
Demand Generation Metrics
No matter which marketing strategy you choose, you need to set key performance indicators and track how effective your activities are. Let’s discuss some essential metrics for demand generation.
- New and returning visitors - measure traffic through the number of new and returning visitors.
- Increased content engagement and duration of sessions - this metric will give you insight into the quality of your content and how well you manage to answer your target audience’s questions, thus keeping them engaged.
- Newsletter signups - according to 49% of marketers, driving leads into the pipeline was most successful via email.
- Request for more information, a demo, a call - you can track the number of requests, but the quality is far more critical, and you’ll be able to assess it based on the next couple of metrics
- MQL, SQL, meetings/opportunities, closed won/lost - These metrics will help you measure the quality of opportunities. Additionally, by measuring MQL to SQL conversion, SQL to booking meetings (for example), and meetings to conversions, you’ll be able to pinpoint any weaknesses in your funnel that you can improve.
- Average deal size - If you divide the total revenue by the number of closed deals in a certain time frame, you’ll get the average value of each customer. This can help you predict the revenue from your DG campaigns and show what customer type is the best to target. Additionally, you’ll be able to calculate marketing return on investment.
- Customer Acquisition Cost - This metric will determine whether your demand generation strategy generates revenue. CAC represents the amount of money you spend to acquire a paying customer. You get it by dividing the total campaign cost (including the cost of managing the campaign) by the number of customers acquired.
- Cost Per Lead - This metric will tell you the cost of acquiring a single lead. It’s calculated by dividing the total cost of a campaign by the number of leads you acquired. B2B companies will generally spend more per lead, especially with highly-targeted ads. CPL tells you how effective your campaign is, and it’s a good metric to look at when creating a budget for demand generation.
- Customer Lifetime Value - To determine your average profit per customer, take the average purchase value and multiply it by the average purchase frequency rate. Low CLV will indicate that you can improve your relationship with the existing customers and keep them more engaged.
- Sales cycle length - a successful demand generation strategy/campaign would result in a shorter sales cycle because you should get more qualified leads through content. To measure the length of the sales cycle, look at the timeframe from the first point of contact to when the purchase is made/contract is signed. Ideally, you will map the length of each stage of your funnel. This will tell you where the leads need more time and will be a good indicator of what else you can do to take them to the next stage. You can plan your demand generation campaigns in more detail and have the perfect timing to deliver the type of content the leads need.
Some interactions with your demand generation strategy are difficult or impossible to track. For example, dark social traffic comes from popular channels, which is very difficult to track. This might include LinkedIn, YouTube, Slack, word of mouth, messaging, etc. Although you can’t track private, dark social channels, they usually influence metrics such as increased branded search traffic. This shows how important it is to track different metrics and try to assign meaning to changes that happen over time.
Pro Tip for Better Attribution:
Add a self-reported attribution field to most high-intent contact forms (e.g., demo request) like "how did you hear about us?". This will help better understand where the demand is being created.
Potential Demand Generation Problems
What if you decide that demand generation is for you, try it out, and it’s not working as it should have? Here are a couple of common pitfalls.
Not Enough Communication with Your Customers
As we said, understanding your target audience is a key start to any demand generation strategy. You can collect data about your target audience in many different ways, but communicating with them directly, learning about their problems, thoughts, and intent will give you very personal, very accurate insights into how you can adapt your funnel, content and messaging to provide them with the information they need to make a decision.
Content Not Giving Results
Demand generation depends on a successful content strategy. If content metrics are not showing what you need, you should take a step back and review. Start with your target audience and work from there. What kind of information are they looking for?
Additionally, review your existing content. Is the topic covered thoroughly and in-depth? Is the information included helpful in real-life situations? Does your content look like an expert wrote it with valuable insights and tips you can’t find elsewhere? Generic content doesn’t work anymore. It’s worth investing in content written by someone highly knowledgeable in the topic at hand to be able to offer a unique experience and perspective.
Leads Don’t Convert Into Customers
If your leads are not becoming customers, you need to find where in the funnel things go wrong. Here are some places to look for:
- The content doesn’t match what your target audience searches
- You don’t focus on nurturing leads through email campaigns but forcing the CTAs
- You’re not following up with potential customers
To reduce churn, you also need to market further to existing customers through upselling or cross-selling. If you encounter obstacles, you may need help with customer satisfaction or understanding your customers. Go back to step 1 and talk to your customers to get feedback and identify problems.
No Proper Data Collection
All decisions within a demand generation strategy are data-driven. Therefore, you need to define core metrics early on and set up the tools to track your results. Without tracking, there’s no way to identify problems and improve. Look into CRM, marketing automation, and analytics tools to gather the right data in the right way.
Demand generation is a holistic marketing strategy that focuses on identifying and addressing potential customers' needs and pain points. Understanding and catering to your target audience can create a customer-centric brand that resonates with them and guides them through the buying journey. This results in shorter sales cycles, more satisfied customers, and overall growth for your business.
It's important to note that demand generation is not just about generating demand for your product but also building trust and credibility with your audience. This is particularly crucial in B2B contexts where the decision-making process is more complex. Adopting a demand generation strategy can help you capture existing demand, improve the quality of your leads and drive long-term engagement.