Many marketing strategies can be considered complex, but demand generation is the most confusing as it almost sounds like the other name for traditional marketing.
And that’s what I believe it is.
Marketing is generating demand; Getting attention so you can convert that attention into sales at some point.
With the growing competitive marketing landscape, countless new jargon and strategies appear. The beauty of marketing is, it constantly changes. What used to work before social media faded away, and what works now will not work 10 years from now.
But the fundamentals remain the same. It’s still all about attention, need, supply, and demand. This much will never change.
So, how does demand generation fit in all of this? We will discuss the What, How, and Why – everything you need to know.
We’ll talk about what I think demand generation is, later.
What is Demand Generation?
Demand generation is all about, well, creating demand for your product/service. But the basic idea is to combine sales and marketing, share resources between these two channels, and create a better experience for new customers while improving customer retention.
Many refer to it as a rather extensive process that requires involvement and participation in multiple marketing divisions.
Most of the definitions regarding demand generation are a constant barrage of complex terms, jargon, and trying to paint it as some breakthrough marketing idea.
But demand generation’s end goal is exactly what the core principle of marketing is – creating demand, getting attention, selling products, and improving customer retention, so they bring in new customers.
Isn’t marketing all about creating demand so you can have sales in the future?
Nothing fancy. No matter how you look at it, you can make it as complex as you may want. It won’t change what demand generation really is.
So, everything that comes before customer acquisition is demand generation.
What doesn’t Demand Generation Consist Of?
To me, demand generation is more of a mixture of four things:
- Conversion Optimization
- NPS (Customer Retention plus building lifelong fans)
The first step is putting out content. Not just any content, but the kind that your targeted audience needs, wants, and will pay attention to.
By now, if you have the slightest idea of what inbound marketing is, you should have figured out that demand marketing is a form of inbound marketing itself.
Inbound marketing principles play a crucial role in the success of demand generation campaigns.
The idea of getting customers through content that serves them, solves their needs, and grabs their attention – it’s all a part of inbound marketing.
The next step is conversion optimization, all about collecting data, testing, and studying the audience.
I pay more attention to collecting data and surveying the audience to optimize the landing pages we create for SaaS brands.
Because A/B testing can sometimes be too limiting, it entirely depends on the particular visitor to determine whether a page was successful or not. Since we are split testing between random audiences, tons of factors such as previous page, psychological mood, personal preference for color, font, design, beliefs, and reaction to certain graphics can affect the outcome of A/B tests.
And most websites don’t need A/B testing because of the simple fact – they don’t benefit from an uplift of 2% in conversions.
If you are making $100,000 in profits, adding $2,000 through an A/B test isn’t going to change anything. Compared to the time and resources you need to run an A/B test, the outcome is insignificant.
However, if you are making $1,000,000 in revenue, adding $20,000 is a significant boost.
And if the test helps in increasing revenue by 10%, your revenue just increased by $100,000. – That’s a great result!
That’s why A/B tests aren’t for small businesses.
Instead, focus on understanding your audience through periodic surveys. You can use tools like RightMessage to prepare multi-step questionnaires for your website visitors and redirect them to the best page possible based on their answers.
This level of personalization will also help you create a segment of the audience. Segments can help you realize what most of your visitors want and experts when they browse your website.
If you are selling a product or a service, personalized results can deliver pretty solid results simply because each person visiting your pages is getting exactly or close to what they want and need.
The next step is sales. This is where marketing meets sales and shares valuable information regarding potential prospects.
One of the reasons so many marketers use the term “Holistic” when referring to demand generation is because it combines sales and marketing.
Although I can’t entirely agree that sales and marketing should be combined all the time, there is evidence that shows when both work together at times, such as creating buyer personas and optimizing customer acquisition costs, the results are better.
Even if you have very little data regarding sales, marketing campaigns can still benefit by knowing the “Tick-Points” or what makes a potential prospect buy faster than others.
Sales are much complicated than marketing. Because now you have to convince and close the customer while delivering on the promise, maintaining the stature, and helping them find the exact solution they saw in the marketing advertisements.
Budgets for sales and marketing are different, too. Most companies spend hundreds of thousands of dollars on marketing, but spending on sales is always as low as possible. At least for small businesses.
To them, marketing is everything, and if the ad works, they assume sales will grow too. But it doesn’t work like that.
You can have great marketing campaigns, but an unoptimized sales funnel in place. If there’s no persuasion in convincing the visitors as to why they should buy from you and why now, there is very little chance you will ever see your sales reach align with the results of your marketing efforts.
The last but the biggest part of demand generation to me is NPS. After all, this is what makes this strategy so effective, and I believe the main aim behind developing a demand generation strategy is to build an audience of lifelong fans.
People who love and recommend your products. People who believe in your goal and prove you with free marketing using word of mouth and organic referrals.
Lead Gen vs. Demand Gen
I don’t think I even tried to compare demand generation with lead generation until I read a few articles.
When you first heard about demand generation, did you relate to lead generation?
How Can you?
That’s why I don’t understand the nomenclature of this “holistic” approach to marketing called demand generation.
There are tons of explanations but no definition. Some compare lead generation to proving to a point that it is something that you’re doing wrong, and that’s lead gen.
Try Demand Gen instead. And don’t think they are the same thing because they both help you get more customers.
Yes, so does PPC marketing, drip marketing, and retargeting, but we don’t compare them with demand generation because there is simply nothing to relate to. While with lead gen, there is the sheer incompetence of current marketers who think getting more leads is lead generation.
I’m not going to compare demand generation with lead generation because there’s simply nothing to compare!. You can not confuse between any of them.
They are two different things, and you don’t have to look at them through the same lens. Demand generation is creating demand. Lead generation is gathering information from potential customers.
That’s all there is to it.
And I personally believe demand generation to be more of a “Term” rather than a strategy. A term that defines inbound marketing combined with whatever you put in to impress and close new clients.
The word demand generation can only have so many meanings. Look at a copy written by Chad Levitt on HubSpot (take it as an author’s view). How does this define demand generation as a sales-centric approach?
Cold calls have been and forever will be a part of lead generation.
Saying something as an opinion is not similar to stating facts.
Demand Generation, if you go by the relatively common definition (there isn’t but still), is a great way to combine sales and marketing efforts.
It isn’t very clear, though. The more you try to understand it, the more you realize it’s flawed.