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How Does Demand Generation Work?

Table of Contents

Demand generation is a strategy to focus and bring awareness to a product or service.

You’re not getting as many leads as you would like. So you develop a lead generation campaign.

The only problem is you’re not getting enough attention from your target customers. So the leads are low-quality or non-existent.

What do you do to counter this? One option is to incorporate demand generation.

One problem for today’s brand is to create demand for goods/services.

A strong demand generation program builds brand awareness and authority, and produces thoughtful, engaging content that drives interest and cultivates leads.

Demand generation (or demand gen) is essential for a healthy business-to-business (B2B) sales and marketing strategy.

Demand generation helps identify potential clients by their first behavior in a nurturing program to ensure a high-quality, highly qualified lead.

Demand generation marketing shares much of what leads to leads, but the strategy requires time. This blog includes everything that your brand needs to increase awareness.

Improved communication between buyers and sales leads to higher sales and conversions.

What Is A Demand Generation Strategy?

If you’ve landed here, it’s safe to say you probably have some questions about demand generation. Most likely, the first one is “What exactly is it?”

The common misconception is that demand generation creates demand for a product. The clue’s in the name, right? Well, demand generation is far more than that.

In an industry where creating better brand-to-customer relationships is everything, demand generation is an umbrella term for marketing activities that drive long-term engagement —including lead gen, demand capture, and pipeline acceleration.

Demand generation is defined as the generation of demand based on an industry product or service.

Demand generation is a marketing strategy focused on building reliable brand awareness and interest, resulting in high-quality leads.

Demand generation strategies help B2B businesses develop awareness and interest amongst their target audience.

Your marketing or sales teams usually execute demand generation activities, depending on where each activity sits in your sales strategy.

It’s a methodology used by sales and marketing teams to build demand for a product/service at every buyer journey.

If your demand generation strategy works, your sales and marketing teams will be on the same page, working in tandem.

Every tactic you implement will work towards a designated end goal. You’ll reduce wasted marketing spend, increase lead quality, and consistently hit your targets.

Demand gen can make a business’s marketing messages sound more authoritative, carry more weight with prospective clients, and ultimately help increase revenue.

The process takes place through a gradual, comprehensive, and holistic process that typically covers a full marketing department.

Start filling your sales pipeline today

Why Does Demand Generation Matter?

When your audience is aware that they have a certain problem to which you’re offering a solution, there’s built-in demand for your product or service.

On the other hand, when you’ve identified a problem that your audience doesn’t know they have, you need to develop tactics as part of your marketing strategy.

A true demand generation strategy accounts for every touchpoint in the buyer’s journey — from anonymous visitors to delighted customers and throughout the customer’s lifetime.

It leverages data to align your marketing and sales teams, track marketing’s contribution to revenue, and, most importantly, drive growth for your organization.

Generating demand helps your audience understand the pain points, why they matter, and why your solution is the best fit.

If done properly, demand gen fills the top of the funnel with a stream of new potential leads. A certain percentage of these might immediately translate into quality leads.

However, depending upon your industry and offering, lead nurturing can take months, or even years.

If your sales cycle is seasonal or sporadic, check out our post about how to generate leads more consistently.

Demand Generation vs. Lead Generation

The terms demand generation and lead generation sound similar and are often used interchangeably, but they’re different.

While demand generation is similar to traditionally generated leads, there is a major difference. Many companies don’t discriminate between prospects.

Demand generation requires much more education and tends to work in the inverse of lead gen and inbound marketing.

To create demand, you need to educate your prospects by introducing them to a challenge for them, and explaining why it’s significant enough to invest in a solution.

Often people visiting a website are seen as leads for companies. This explains a particular problem in a company relying on high-volume cold-calling to generate new business.

Demand generation aims to grow your audience by bringing new visitors to your website and introducing them to your solutions.

Lead generation marketing is a one-to-many approach to creating an interest in your product.

Actions such as creating a blog or a series of YouTube videos to attract leads to your brand are tried and trusted lead generation tactics.

What Is Lead Generation?

Before any other stages of demand generation can happen, you need to have leads to deliver your strategy.

You’re not going to be able to sell to anyone without first generating leads. Ultimately, your sales team needs someone to follow up with.

A lead is an individual that has voluntarily given you their information, providing candidates for you to nurture into marketing qualified leads (MQLs) and sales qualified leads (SQLs).

Knowing your average deal size helps determine the sales cycle length, and the demand gen strategies you’ll use.

By comparing your ACV to your customer acquisition costs, you can calculate how long it takes for you to break even on your marketing spend.

If there is existing demand in the market, you can capture it and guide potential clients to your products and services.

This process involves a range of lower-funnel content that will establish your brand proposition, such as PPC advertisements, SEO optimizations, and 3rd party intent data.

Lead gen involves gaining the interest of potential clients and adding them to your marketable database.

Once captured through a nurture program, these leads can then be handed to sales development to guide them through the sales funnel.

Start filling your sales pipeline today

What Is Customer Lifetime Value (CLV)?

This metric is the average profit you can expect to make per customer. Calculate the average purchase value, then multiply by the average purchase frequency rate.

It’s the average net profit one customer will bring into the company during their time with you.

Raising the CLV is where your sales function and customer success team can make a difference.

Demand Generation Fundamentals

A demand generation campaign is a data-driven marketing strategy companies use to build awareness and interest for their products or services.

It focuses on delivering content and conversations throughout the customer journey. Every touchpoint should be accounted for in your demand generation campaign.

Since demand generation programs encompass every single touchpoint (from building awareness through customer retention), they can be broken down into four manageable parts: brand awareness, inbound marketing, sales enablement, and customer retention.

Brand Awareness

To generate demand, people have to know who you are.

The first step is to develop brand awareness, the extent to which contacts and customers can recollect and recognize your brand.

Hand-in-hand with branding, building industry expertise is a key element of reliable demand gen.

Industry expertise means that your brand is seen as an authority in its field from the first interaction with a potential customer.

This kind of expertise helps build client trust and lays the groundwork for important conversations about customer pain points and your business’s solutions.

Inbound Marketing

If you regularly create content, your leads most likely come through inbound marketing.

Inbound marketing is when your audience seeks out information for a problem they are trying to solve and organically comes across your brand as a potential solution.

Inbound marketing is less disruptive and more targeted than outbound strategies, resulting in higher quality prospects.

Through Call-To-Action (CTA) strategy and organization, strategic conversion points, clear labels, and visitor-centric navigation, you can not only offer value to visitors but also nurture prospects.

Sales Enablement

Marketing and sales alignment is critical to the success of your entire business.

Fortunately, sales enablement initiatives driven by a comprehensive demand generation marketing strategy can promote unification across marketing and sales and, in turn, close more business.

Once you’ve succeeded at generating or capturing demand as opportunities, you can speed up the sales process using pipeline acceleration techniques.

These can be as simple as engaging in conversation with potential customers or creating highly targeted content that meets your leads’ pain points and is appropriate to their position in the sales funnel.

Delivering content to your prospects and directing them to the right place will involve a robust mix of programs covering a variety of channels—email, social, direct mail, even in-person events.

The distribution method will change based on the stage of the funnel.

Customer Retention

While acquiring new business is important, retaining, delighting, and evangelizing your existing customers is critical for achieving sustained growth with your demand generation strategy.

You always want to go above and beyond for your customers, providing them with your company’s ultimate impression and delivery.

By under-promising and over-delivering, you can delight customers at every step of their journey.

Start filling your sales pipeline today

How To Develop Demand Generation Marketing Strategies

The job of your demand generation campaign is to bridge the gap between sales and revenue. Creating demand is the backbone of this strategy.

Ultimately, you don’t know exactly what your market will demand from your offering or how quickly people will adopt your brand.

Still, you can use your initial understanding and research on potential customers to get started.

You can use your demand generation efforts to inform your brand and product strategy moving forward — better aligning your brand and offering with buyer needs and positioning them for enhanced recall in the future.

You do this by driving prospects into your lead gen funnel. You want to focus on several components when developing your demand gen campaign.

Every successful demand generation campaign will look a little bit different. But there are certain steps that every campaign should incorporate to give you the best chance at generating interest in your product or service.

Building awareness, creating and nurturing opportunities, and prompting engagement through a deliberate content strategy is essential to growing revenue.

A strong demand generation strategy will help your business bring in reliable, great leads and ultimately grow your business.

Your sales campaign has to produce demand to make a profit. If it is not, there will be a lot of waste in our budget.

If you are a startup looking to build up an industry pipeline and generate demand, it may be time to invest.

Most demand gen strategies, including researching your market and creating and promoting your content, will preserve your B2B marketing team.

However, other activities such as lead nurturing and customer retention will lie with your sales (or Customer Success) teams.

If your demand gen strategies are working, your lifetime customer value should go up as it reflects how well your team is framing your service delivery to leads.

If you meet their expectations, they’ll stick around.

We will present several effective demand generation strategies we have learned working with global B2B businesses.

You will then be ready for actionable steps to reach higher quality prospects and have more conversations with decision-makers. Let’s go.

Identify Your Target Audience

Of course, before you decide what the programs entail, you need to know who you’re targeting.

Understanding your audience and building customer profiles will help you precisely target your marketing.

You can develop personas based on your target audience’s roles, needs, and objectives. And the more details you can include, the better.

Marketing teams should design target company personas based on high-value clients that are most likely to convert and grow.

Evaluate what business objectives and values these target accounts tend to share and what major steps in their buying journey precede purchase.

Use technographic and firmographic data to ensure you’re targeting companies that will be a great fit for what you sell.

You can then target those accounts with a mixture of tactics, like ads, email and LinkedIn outreach, direct mail, and any other channels that make sense for your business.

You’ll be able to personalize your sales and ensure your sales team have all the information they need to close the sale.

Create An Ideal Customer Profile (ICP)

This will be the north star for all your demand generation strategies. Make it as narrow as possible, so you can craft a message that speaks to their pain points.

Chatbots And Conversational Marketing

Chatbots are another channel to engage with prospects and customers visiting your website.

From lead generation, qualification, and customer support, chatbots, both automated and live, provide website visitors with the ability to answer their questions.

Email Marketing

Email marketing is ideal for B2B demand generation.

You’re not going to get a contact to go from converting into a lead to becoming a customer without educating them further, especially if your company has a complex sales process or a long sales cycle.

By sending your contacts emails with valuable content and other resources, you can nurture them through the funnel.

Email marketing can be a compelling component of your demand generation campaigns, but many advertisers misuse it or fail to harness its potential.

When it comes to email marketing, A/B testing is essential, and the adage that “Less is more” most definitely applies.

Track Everything

When measuring your demand generation marketing efforts, skip the vanity metrics and instead focus on lead quality and your initiatives’ impact on your overall revenue.

Every organization will focus on slightly different demand generation metrics for its strategy.

Measure as much as you can and reflect on the results you get. Double down on what works and cast off what doesn’t.

Measuring your funnel stages and conversion rates will take place in your CRM and rely heavily on your marketing automation tool and your sales team‘s manual data entry.

Working with a partner or internally to establish a strong foundation in revenue operations will pay long-term dividends.

Calculate your total campaign costs by the number of leads that came in.

This tells you about your demand generation 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 demand generation 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 receiving back in revenue.

Social Media Funnel

For a more in-depth look at setting up a social media funnel that complements your demand gen strategy, check out our post on building a successful social media marketing funnel.

With a funnel in place, you’ll see which demand generation marketing strategies you can incorporate into each phase.

Have An Engaging Website

After consuming your content, your website will be your ICP’s first port of call. Make sure it shows you and your brand in the best light.

Lead Scoring

Lead scoring evaluates the historical behavior of your prospects and the actions they’ve taken while interacting with your brand to determine whether the individual prospect demonstrates sufficient interest to be considered a “hot” lead for your sales team.

Create A Free Tool

One of the most effective ways to create a successful demand generation campaign as a new brand is by offering a free tool or resource.

Offering a free tool can help your audience understand your solution. It will also help you understand your audience’s needs and what they’re looking for in a solution.

B2C vs. B2B Demand Generation

B2C companies typically have to get buy-in from only one person: the customer (and maybe their spouse or family).

B2B marketers, on the other hand, usually have to get the buy-in of entire teams, key decision-makers, and sometimes even an entire department.

Demand Generation Tactics

The methods you use will depend on the audience and sector you’re targeting.

Demand gen for B2B companies is about creating a predictable pipeline for your sales team.

Demand generation strategies often include blogging, downloadable content, webinars, podcasts, videos, influencer marketing, PR campaigns, SEO, etc.

Done properly, demand generation can create awareness around the issues relevant to your business, provide sales the qualified leads it needs to close deals, and position marketing as a revenue generator instead of a cost center.

Every tactic you implement will work towards a designated end goal. You’ll reduce wasted marketing spend, increase lead quality, and consistently hit your targets.

For example, you may find your audience takes to short videos better than joining one-hour webinars. Here’s a look at some of the demand generation tactics you can use.

Whatever mediums you choose to create content on, make sure your content answers your ideal customers’ questions.

Webinar

Host a webinar and open up for Q&A at the end of the session.

Case Studies

Use case studies to share stories and start discussions.

Use segment-specific information to craft content and calls-to-action (CTAs) that guide buyers through their purchase and anticipate questions and concerns common to your group of high-value leads.

Include messaging that solves for hurdles from the first time a lead comes across your product or service to their final questions about purchasing.

When in doubt, focus on the primary reasons buyers consider a product or service provider as they are first searching.

FAQs And Fact Sheets

Fact sheets provide information about your product or service, covering elements that could arise during sales calls.

These often include comparisons between your product and your competitors, allowing sales reps to have peace of mind when discussing your competitive landscape.

FAQs are talking points that buyers have previously asked about and frequently arise during sales conversations.

Send Gifts

When done effectively, it can potentially drive a return on investment.

You can send an assortment of gifts, including wine, cookies, fruit baskets, candle kits, company swag, etc.

When you send gifts to prospective customers, it entices them to reach out. So consider using this method as a way to book calls and meetings.

It also creates an excellent first impression, which increases the odds of remembering your brand.

Encourage User-Generated Content

You don’t always have to do the heavy lifting to get demand from your audience. Sometimes, you can get them involved to create buzz around your brand.

Social media is the perfect platform for inciting this.

Start filling your sales pipeline today

Demand Generation With Kennected

When you build brand awareness and keep up to date with emerging trends, you’ve barely scraped the tip of the iceberg with demand generation.

Digital marketing typically won’t be done without free tools, so Kennected offers LinkedIn’s #1 lead generation tool for just $89 a month.

No more cold emailing or relying on cold calling hoping to make a sale.

Cloud Kennect’s automation techniques shape your outreach into relevant content to attract prospects and grow your network. Want to know how much you can make using connected? Use our ROI calculator and enter your conversion rates and your avg customer value.

Where everywhere else the sales initiatives rely on revenue, at Kennected, we rely on relationships. How much revenue that’s generated depends on the connections we grow.

Our content marketing is simple, yet our message is compelling because the customer journey should come first.

If you’re hesitant, check out our free tools that will begin to change your lead generation forever.

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