You’ve heard the buzzwords “Demand Generation” a thousand
times. But that doesn’t mean you have a clear handle on what it is, or why you
should care about it. Given this, I thought it would be useful for
business2community readers to explain what “Demand Generation” is, and how it
should fit in with a small-to-medium-sized business’s overall marketing
strategy.
Demand generation is any activity conducted by an
organization’s marketing department that directly contributes to more revenue
(and profit) generated for the company.
This is quite distinct from branding and awareness
campaigns, where companies spend thousands (some even millions) of dollars on
TV commercials, billboards, radio, or any other form of paid advertising that
cannot directly be traced to sales.
Advertising is therefore split into two distinct activities
(in reality many more). On the one hand, getting the word out about a company
and sowing seeds for sales. While on the other one, generating active demand in
the form of tangible leads or sales of goods.
The demand generation marketing manager will be able to
trace his or her budget to revenue and ROI.
While it is possible to draw a correlation between branding
and awareness campaigns and sales – that is not their overarching goal, so it
isn’t as necessary to determine a direct causal link.
This is because it is virtually impossible to measure the
impact of a TV, radio, or billboard campaign on your sales team’s pipeline and
therefore on the company’s bottom line. Although there are some cases where a
company used a special phone number or website to track sales from billboards,
commercials or radio.
With demand generation campaigns, the marketing department
is focused on generating interest and contactable leads for their sales team.
At least in a b2b environment, which is where demand generation marketing staff
are more common. This is because there’s an extra step required by sales to
undertake in order to close a deal. In the case of b2c, if marketing has been
effective, the consumer simply makes a purchase. A call from a salesperson
isn’t generally required.
But in a b2b environment, marketing helps sales by enabling
quotas to be met, which in turn helps to grow for the company. ROI is measured
accurately via marketing automation systems, which plug into their existing
CRMs. In this way, marketing – or demand generation – campaigns can be assessed
as profitable. Or, if for some reason they are not profitable, staff can
analyze the data produced and optimize accordingly.
The 80/20 rule applies here to your target audience. 80%
will be conducting research before they make contact with you via your website
or sales line. The remaining 20% have already done their research and are now
in – or close to – buy mode. Buy mode means that I have ascertained what type
of product I want and / or need, and I am now looking for the vendor that can
give me:
- The best value for money
- The best customer service
- The best overall experience
After all, purchasers do not buy based on spec sheets and
bells and whistles; they buy on emotion.
