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.

As the famous adage goes – you know one half of your advertising budget worked – you just don’t know which half.

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.