Why You Shouldn’t Hire a VP of Demand Generation

I’m seeing more and more companies (startups in particular) replacing the CMO (or VP of Marketing) role with a VP of Demand Generation.  When you talk to the CEOs making these decisions they often say – “I want someone who is going to focus on generating leads versus all the other ‘stuff’ that marketing does.”  Of course, the implication is that all the other “stuff” is a waste of time.  The only function of marketing should be  putting leads in to the top of the funnel.  But this is a gross misunderstanding of marketing.  All the other functions (branding, public relations, analyst relations, creative) in marketing do contribute to generating leads.  The relationships between the different functions are  tightly intertwined, reinforcing one another.

I suspect that most of these VP of Demand Generation positions are  unsuccessful.  I’ve talked to several CEOs over the past year that have struggled with short-tenured VP of Demand Generation.  The conversation goes something like this. We had a marketing leader.  S/he had a great understanding of leads, but s/he wasn’t really strategic. S/he could not develop content or messaging.  And s/he couldn’t speak intelligently to press or analysts. And s/he had limited product understanding so s/he didn’t have the respect of the sales force.”

Note: I’m making a sweeping generalization in my example above.  Some Demand Generation leaders do have other talents in the areas of messaging/positioning, content development, public/analyst relations and product marketing.  But I think it is fair to say that those talents are often under developed in most people that grew up in demand generation roles.

What if we took the same attitude towards other functions?

Human Resources, for example, has been condemned by many startups as a useless function.  We don’t care about Human Resources, but we do care  about hiring great talent.  So let’s not hire a VP of HR, but a VP of Recruiting instead.  Soon you will learn that you are not able to attract top talent without a great culture or without competitive benefits and  compensation programs.  A strong VP of Recruiting probably doesn’t know anything about creating comp/benefits programs.  You won’t be able to retain talent without programs that recognize top performers and promote their career development.  A great VP of Recruiting probably doesn’t know anything about performance management.  And you won’t be in business very long without complying with local state and national labor laws related to taxes, discrimination, healthcare, etc.  A great VP of Recruiting is not an expert in any of the payroll or compliance aspects of HR.  HR exists as a collection of functions that all inter-relate and depend upon one another for success.

Imagine if the CEO said – the only part of sales we care about is closing  deals.  So let’s not hire a VP of Sales, but a VP of Revenue Acquisition  that knows how to close big deals.  But you don’t get into deals unless  you have someone that knows how to cultivate relationships, qualify  prospects and initiate deal cycles.  A closer isn’t necessarily good at  those things.  You can’t scale unless you have someone that knows how to recruit top talent, create attractive incentive programs or career  development paths.  A closer doesn’t necessarily know anything about those “touchy/feely” functions.  You cannot scale sales with strong pipeline management, use of CRM technology and adoption of a consistent sales methodology.  A closer doesn’t necessarily know anything about these operational functions.  Sales is a collection of functions that all inter-relate and depend upon one another for success.

You get the idea.

A VP of Demand Generation is a great role to have.  Demand Generation leaders bring data science, accountability and focus to marketing teams –  a necessary balance against the creative, branding and messaging aspects  that can often dominate the marketing agenda.  Demand Generation leaders are the key to quantifying the ROI from marketing efforts and helping justify increases in budget.  By no means am I suggesting you should not have a VP of Demand Generation, but they are not a substitute for a CMO/VP of Marketing.

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