If you ask 10 different B2B marketers what “demand generation” means, you’ll get 10 different answers.
Unfortunately, there are a lot of misconceptions about demand generation in B2B marketing.
In this guide, we’ll clear up the confusion. You’ll get an updated definition of demand generation, along with the components of a successful demand generation strategy.
And finally, you’ll learn why demand generation is not the same as lead generation.
What is demand generation?
Demand generation captures the umbrella of marketing programs that get customers excited about your company’s product and services without trying to explicitly sell to them.
Demand generation programs can help your organization reach new markets, promote new product features, build consumer buzz, generate PR, and re-engage existing customers.
Essentially, demand generation is a long-term, education-focused marketing strategy that prioritizes reaching and engaging “out of market” buyers.
The ultimate goal of B2B demand generation is remaining top of mind while your potential customers are not in a buying cycle — so that whenever the need arises, your product or service is immediately considered for purchase.
What makes demand generation a distinct concept from other customer acquisition tactics is a commitment to long-term customer relationships and a strategic mindset.
Why is demand generation different than lead generation?
Demand generation marketing is about educating your audience with no expectation in return. Meanwhile, lead generation is optimized for capturing contact information – but prematurely pushes non-solution seeking people to sales automation workflows, which is highly ineffective.
Instead of a top-down inbound marketing approach, ABM is a bottom-up marketing strategy that collaborates with sales to engage with high-quality leads and target accounts during complex B2B sales cycles.
Revenue teams have learned that full-funnel marketing with a hybrid mix of inbound, outbound, and lifecycle marketing is the right balance for a high-performing demand generation program.
Metrics and KPIs for Measuring Success
Your demand generation marketing efforts should be guided by a north star: lead quality.
In addition to understanding key SaaS metrics, these are important questions to ask:
Which channels are driving highly qualified leads?
Which lead types most often convert into qualified sales pipeline?
What percentage of our opportunities convert into paying customers?
What percentage of our paying customers stick around long enough to become profitable?
Which marketing channels are driving opportunities with the best LTV?
How do we generate more qualified opportunities from the best channels?
How do we champion full-funnel pipeline visibility?
How do we hold sales accountable for working the leads properly?
How can we develop an effective feedback loop between marketing & sales?
Leading indicators: example metrics
Brand search volume
Your brand vs. competitor brand search volume
Organic traffic to high intent website pages
Direct traffic (people type your website URL into the browser)
Entrances and engagement on your feature / solutions pages
Referral traffic from other relevant websites and social platforms
Lagging indicators: example metrics
Assisted conversions: pages consumed “on the path” to becoming a conversion.
Website traffic to conversion rate (declared intent)
Qualified demo to sales opportunity rate
Proposal sent to closed/won rate
Average deal size
Sales pipeline velocity
Cost per acquisition (CPA)
Customer lifetime value (CLV)
Declared Intent vs. Assumed Intent
Digital marketing has evolved away from direct response, lead generation focused marketing campaigns to a more holistic approach that covers brand awareness, demand nurturing, and demand capturing across the entire sales funnel.
With this in mind, it’s worthwhile to think about the CTA buttons on your website — and what constitutes declared intent vs. assumed intent.
Run a “declared intent audit” to check if assumed intent leads are being treated as declared intent. If yes, that’s a clear misalignment of sales experience and buyer expectations..
This is the decisive test which confirms if your marketing team truly understands the customer journey — a critical component of any demand generation program.
Once you’re acquainted with your buyers’ needs and can anticipate marketing trends, you can fuel your marketing programs with enhanced levels of personalization.
Marketing automation software will help you run A/B tests, choose the right content, and customize timing for each of your marketing campaigns and customer segments.
To begin with your demand gen strategy, get to know your customers and conduct qualitative research through user feedback and conversations. If you’re struggling to understand your prospects’ needs, pick up the phone and ask.
The success of demand generation stems from your ability to connect with target customers. All you need to get started is a point of reference.