What is Demand Generation?
“Demand generation” is a fancy term that marketers use to describe all the activities they do to generate leads. The phrase “demand generation” is aspirational in most cases. The word “generation” suggests that the marketing team is somehow convincing customers who were not planning to buy a technology solution that they need really one. Rarely does that actually happen in the real world. In most cases, marketing is focused on identifying companies who already either:
A better phrase for the actual process used by marketing might be “prospective customer identification.” Of course, that doesn’t sound as cool as “demand generation” and we are talking about marketers here so cool always wins.
There are lots of different strategies to generate leads ranging from digital programs such as online advertising and search engine optimization to more traditional activities like direct mail and trade show exhibits. In this article we will explain many of the popular demand gen techniques being used by B2B tech market teams as well as some of the common strategies such as inbound, outbound, and account based marketing.
Examples of Demand Generation Strategies
All of these demand generation strategies and techniques have a common goal – to create an opportunity for the sales team to sell your product to prospective buyers. In any given market, during any given quarter, there are thousands of different companies planning to buy technology. Marketing’s job is to:
- Find the companies that are “in the market” for a purchase
- Pinpoint the specific individual(s) responsible for their decision
- Convince them to take a brief, 15-30 minute meeting with a sales rep
The B2B Buyer’s Journey
This is where the hard work comes in for the demand generation teams. How do you know which companies might be in the market to buy a particular software application? To answer that question you need to understand “the buyer’s journey.” In other words – How do business buyers go about researching technologies, identifying products, and selecting a specific vendor?
Sample Technology Buyer’s Journey
The way businesses buy products is not all that different from the way you as a consumer make purchases. Think about the last major purchase you made. Have you bought a car or TV recently? What was the first thing you did? Talk to a salesperson at a car dealership? Go to a retail store like Best Buy and talk to the store employees? Probably not. That is what your parents did 25 years ago before the Internet. Today, most people do their research online. The same is true for business purchases.
Most business buyers start their purchasing process online. In fact, studies show that most companies are able to gather 60-80% of the information they need to make a purchasing decision before they are willing to speak to a sales rep.
Online Pricing is Available for Most SaaS and Cloud Products
There is a ton of information available for free to buyers online. Not only can you get information about the features of a product, but you can get pricing online and, in many cases, take a test drive with a free trial.
Free Trials are Available for Most SaaS and Cloud Products
Buyers ability to do 80% of their research online is a big problem for the sales teams at tech vendors. By the time the buyer speaks to a sales rep they will have already formed strong opinions about what options they have and which product they need.
More than 60% of the Buyer’s Journey is Self-Guided
As a result, demand generation teams are often asked to try to pre-empt the online research process and find potential buyers earlier in their journey. We can restate the mission of demand gen teams as:
Finding the right person at companies “in the market” for their products as early as possible in the buyer’s journey and convince them to take a meeting with a sales rep.
Real World Example
To make this all easier to understand let’s consider a fictitious example – a HR leader who needs to purchase an Applicant Tracking System (ATS) for their in-house recruiting program. ATS is a fancy name for the software that recruiters use to capture job applications and manage the interviewing process.
Mary Jobfairie is a Director of Recruiting at a $1B electric vehicle company named JigaWATT. Her company is growing quickly. In addition to partnering with a world-class search firm, she also needs to replace her existing ATS to manage the pipeline of candidates sourced by her in-house team. She currently uses an application from a company called JOBfilla. The vendor was acquired by MonstaTEK a few years ago. Since the acquisition, most of the top developers have left JOBfilla and it has not released many new features. HR managers complain that the software is complicated to use. For example, it takes 45 minutes to post a new job to her company’s website. It’s time for Mary to upgrade to something better.
Example Software Buyer
UBERTalent is a small, but fast-growing HR software vendor that offers an Applicant Tracking System. UBERTalent wants to reach buyers like Mary who are in the market for a new recruiting system. How can they identify that JigaWATT and Mary are prospective buyers of their technology and engage her as early in her buyer’s journey? To answer these questions, we need to understand how Mary researches the different options for Applicant Tracking Software.
UBERTalent – The Seller
One of the first things Mary will do is go to a search engine like Google. She will type in a phrase like “recruiting software” or “Applicant Tracking Systems,” or “HR system.” Marketers refer to these popular, generic phrases typed into search engines as “keywords.” Mary might also phrase her search in the form of a question like “What is the best recruiting application?” or “What is an alternative to JOBfilla?” Marketers call these types of more specific queries as “long tail searches.”
Search Engine Query
Google will display a page listing various websites about Applicant Tracking Systems. Marketers call this the “Search Engine Results Page” or “SERP.” At the top of most Google SERPs are 3-4 different ads. Marketers at HR software vendors can bid with Google’s advertising platform to appear in the SERPs for different keywords. This discipline is referred to as “Search Engine Marketing (SEM)” or “paid search” in the marketing world.
Below the ads, Google will also display 8-10 different links to websites that its algorithm has determined are most relevant to Mary’s search. These non-paid links are called “organic search results.” Running ads on Google is a sure-fire way to appear at the top of the page, but marketers must pay a fee each time someone clicks on the link. Google runs what is called a “pay-per-click” model.
Paid Search Results
Although most marketers do run Google ads, they would prefer to get their clicks from organic search results to avoid paying any advertising fees. There is a whole cottage industry of marketing agencies focused on helping customers rank prominently on Google search results to minimize ad spend. Marketers call this “Search Engine Optimization” or “SEO.”
Organic Search Results
Let’s suppose Mary searches on “Applicant Tracking System” on Google then clicks on either an ad or an organic search result for a software vendor named UBERTalent. She is then routed to UBERTalent’s website onto what marketers call a “landing page.” The purpose of the landing page is to convince Mary to identify herself as someone who is interested in purchasing software sometime in the near future. In other words, marketers design these landing pages to entice Mary to fill out a form with her name, email address, and phone number so they can contact her to discuss her needs.
Marketers experiment with lots of different creative approaches to get buyers like Mary to “self-identify.” Some offer free trials of their product. Others offer a free consultation with an expert who can help educate buyers like Mary on the different features and benefits of the software being considered. By far the most popular offer marketers use on landing pages is “content.” Examples of content might include “Buyer’s Guide for Applicant Tracking Systems” or “10 Questions to Ask Before You Buy Recruiting Software.”
Landing Page with Form
Marketers develop these documents specifically to entice buyers like Mary to reveal her contact information (name, email, phone) so that she can download the documents. Once Mary fills out the form, her information is routed to UBERTalent’s “Marketing Automation Platform.” The most popular marketing automation systems are from companies like Hubspot, Adobe (Marketo), Oracle (Eloqua), and Salesforce.com (Pardot). These applications house the marketing database with all the names and contact information for potential buyers the marketing team wants to reach. Marketing automation systems also manage the “lead routing” process.
When a buyer like Mary fills out a form on a landing page, her details are run through a “lead scoring” process to determine what to do next. A high score will result in Mary’s contact details and recent form fill action being routed to an “Business Development Representative (BDR)” whose job is to follow up and get a conversation with her. Business Development teams are staffed with groups of specialized sales representatives whose job is to book meetings with buyers like Mary who are shopping for technology.
In most B2B technology companies the sales team is highly specialized with multiple different groups performing different tasks. BDRs are tasked with “prospecting,” that is getting conversations with interested buyers and scheduling a meeting or what marketers call “a lead.” The leads are worked by another type of sales representative such as an “Account Executive.” The term Account Executive is a fancy name for a higher paid and more experienced sales rep or “AE.” It is typically the AE (not the Inside Sales Rep) who is responsible for qualifying the lead and closing the deal.
Inside Sales Hands Off Leads to Account Executives
BDRs go by many alternate names. You might hear marketers referring to Sales Development Reps (SDRs), Account Development Reps (ADRs), and Lead Development Reps (LDRs). All of these roles perform a similar set of activities – regardless of what name they are called. SDRs, BDRs, ADRs, and LDRs spend their days reaching out to prospective buyers via phone, email, and LinkedIn. Once they get in touch with a potential buyer their job is to book an appointment with an AE. If the initial call goes well the lead will be converted into an opportunity, assigned a potential dollar value, and tracked in the sales pipeline.
Buyers like Mary who downloaded content from a tech vendor’s website are called “inbound leads.” Marketing programs designed to help buyers find you online such as SEO/SEM are referred to as “inbound marketing.” By contrast, marketing programs in which technology vendors try to find interested buyers are referred to as “outbound marketing.” BDRs spend a lot of time performing outbound prospecting techniques such as cold calling to identify buyers that may be in the market for technology.
Inbound versus Outbound Marketing
The challenge with outbound marketing is that marketers don’t know all the companies that are considering a purchase in the next few months. Let’s suppose Mary did not click on UBERTalent’s website links on the Google SERP, but instead clicked on one of their competitor’s sites. How would UBERTalent’s marketing team know that Mary is a potential buyer in the market for their type of software? Unless she had engaged with one of UBERTalent’s other marketing channels they probably would not.
Outbound marketing requires casting a wide net by reaching out to a large number of companies hoping to catch some who are in the market for their technology. Outbound marketing is inherently inefficient, because you are going to reach out to many businesses who have no current interest in the product you are selling. For example, an inside sales rep may have to call 100 different companies just to get one response and conversation. Finding an interested buyer is about being in the right place at the right time. Most marketers prefer to generate leads using inbound strategies, because it is more economical. However, it is challenging to attract enough leads to fill your sales team’s pipeline using just inbound marketing. So most companies will use a combination of both approaches.
Outbound Marketing Can Be Inefficient
Cold calling via inside sales teams is one approach to outbound marketing, but there are many others. Email marketing is another popular option. Marketing teams will send out regular emails to a large database of prospective buyers inviting them to attend a webinar or download a white paper. For example, UBERTalent might send Mary and her teammates an email once a month inviting her to attend a webinar on a topic related to recruiting. If Mary opens the email and registers for the webinar, her name will be routed to the marketing database as a lead, which will be scored, and then routed to an inside sales team for follow up. The process is very similar to the inbound marketing lead flow described above. With email marketing, technology vendors are trying to get buyers to “put their hand up” and indicated that they are interested in one of the topics listed in the email. The marketing team then knows which potential buyers are in the market to learn more about which topics.
Email Marketing is a Popular Outbound Strategy
Email marketing is often used in combination with “content marketing.” The idea behind content marketing is to publish an on-going series of documents offering education and insights on topics related to your product. For example, UBERTalent’s content marketing strategy might involve publishing documents that are helpful to HR and recruiting professionals. Examples might include “How to Recruit Differently with Gen Z,” “How to Build an Awesome Careers Page,” or “How to select an Applicant Tracking System.” Today’s marketing departments effectively need to operate like online magazines delivering a regular stream of original content to prospective buyers to educate and engage them.
Examples of Popular Content Marketing Formats
Marketing departments build out libraries of content in a variety of different formats and lengths to appeal to different audiences. Historically, white papers have been one of the most popular formats. A white paper is typically a text-heavy document with 8-10 pages of in-depth education and perspective on a technical topic. eBooks have emerged as a popular alternative to white papers. eBooks are designed to be easier to read featuring lots of infographics and eye-popping visuals with shorter bursts of text. Not every buyer will commit 30 minutes to reading an eBook or white paper so shorter form content like blog posts and articles are a must-have for the content library as well. Content is increasingly being developed in formats other than text. For example, podcasts and videos are growing increasingly popular content formats. Just like many people would prefer to watch TV or listen to the radio rather than read a book, many buyers prefer podcasts and videos to white papers.
The idea behind content marketing is to get buyers to self-identify and indicate that they are interested in a particular topic. If Mary downloads an eBook on UBERTalent’s website about “How to Recruit Differently with Gen Z,” that indicates that she is interested in learning more about how to attract more twenty-somethings to apply for jobs. It may also indicate that her existing software application is not well suited to that task. Suppose Mary opens an email and clicks to watch a video from UBERTalent’s CEO explaining how the company is using artificial intelligence to revolutionize recruiting. Her interest in the video may indicate that she has an interest in learning about modernizing her HR applications and is open to switching vendors.
Account Based Marketing
In recent years, both inbound and outbound marketing have undergone criticism for not being targeted enough. Sales leaders often complain that they don’t want leads with just any company that is willing to talk to them. They want leads from the companies that will sign the biggest deals and that they have the highest probability of winning. Sales teams refer to these accounts as their “ideal customer profile.” The ideal customer profile is typically defined by “firmographic” criteria such as the
- Annual revenues
- Number of employees
- Headquarters geographic location
- Growth rate
- Vertical industry
- Ownership model (public/private/non-profit)
- Stock ticker symbol (public companies)
- Private equity or venture capital investors (private companies)
For example, UBERTalent’s ideal customer profile might be:
- US-based organizations
- Total workforce of more than 5,000
- Hiring more than 500 new employees per year
- Measurable diversity and inclusion targets
Ideal Customer Profile
The inbound leads from people who discovered UBERTalent via a Google search may or may not fit the ideal customer profile. For example, a small business with only 200 employees that does not need the advanced features of UBERTalent and cannot afford the price point of the subscription may click on a Google ad to go to their website. A similar phenomenon will may occur with the customers who register for a webinar that UBERTalent emailed them about. Typically, marketers will blast out webinar invitations to as broad of an audience as possible hoping to drive the maximum number of registrations. However, not all the targets who are emailed fit the ideal customer profile.
With traditional inbound and outbound marketing all leads are considered equal. For that matter, all accounts are considered equal in terms of priority. As a result, the inside sales team might focus its efforts on booking appointments with buyers for whom they can easily get meetings with rather than those who might spend the most. Mary’s company, JigaWATT, which fits the ideal customer profile, may never get a call because the inside sales team doesn’t have the name or contact details of any decision makers there and doesn’t want to take the time to do the research.
Account Based Marketing Focuses on Highest Potential Accounts
To ensure that marketing efforts are focused on the companies with the highest potential revenue, the industry invented the concept of “Account Based Marketing” or “ABM.” The idea behind ABM is to concentrate marketing efforts on a targeted list of high potential accounts rather than the broader market. For example, instead of the marketing team spending budget on Google Ads that anyone might click on, the funds might be used to send a personalized, direct mail package to the top 10 decision makers in JigaWATT’s HR department. Instead of sending out a generic email to 10,000 recruiting professionals with a link to a white paper, an ABM program might involve sending a highly personalized article to 10 priority accounts with specific details on how JigaWATT can achieve their diversity and inclusion goals.
The response rate to all of these different marketing campaigns – inbound, outbound, or ABM – is highly influenced by what the customer you are targeting thinks about you. Suppose you are targeting Mary with emails, webinars, cold calls, search ads, and direct mail packages. Mary’s likelihood to respond will be driven by her opinion of UBERTalent. If she has never heard of UBERTalent she might be intrigued to learn more about them. Or she might get annoyed and simply ignore the marketing programs. If Mary has a positive opinion about UBERTalent, she will be more likely to respond to the marketing programs. This is where the concept of brand comes in.