An Executive’s Guide to Demand Generation
Now is a great time to be in marketing. Not long ago, if you were asked at a cocktail party what you did and replied, “Oh, I’m in marketing,” you were almost guaranteed a response like, “Wow, you’re the one that works on all the fun logo-covered fleece vests!” Historically, this misconception was largely due to the inability of marketers to demonstrate their impact on the business, i.e. showing the efficacy of campaigns and knowing where to invest (or not)—and clearly understanding the process the buyer takes when evaluating a product or service.
But times have changed. Thanks to technology—especially marketing automation—we now have tools that help us understand the digital footprints of our buyers—how they like to be communicated with, the frequency, the message, gain visibility into which programs drive real business results and which don’t, and even ultimately help us predict buying preferences. With such powerful inputs available, marketers today are uniquely situated to understand all facets of their customers and the journey they undergo.
One function that has originated as part of this new data-driven era is the role of the demand generation marketer. This role and organizational function is dedicated to driving demand and ultimately revenue. In many organizations demand generation is often associated directly with acquisition, but a better and more modern way to think of it is as “transformative demand generation,” and this is where marketing executives need to focus. If you align your team around this concept, you’ll gain better insight into all areas of the customer journey—not just the early stages.
Transformative Demand Generation
Transformative demand generation is comprised of three key criteria:
- Having an agreed upon, shared model, set of definitions, and goals for aligning marketing and sales efforts. Creating a shared revenue model with clearly defined stages, conversion points, definitions, and service level agreements (SLAs) is critical. This is your blueprint for what marketing and sales are responsible for. A good model should be customer-centric and should model the customer’s journey. There should be clear handoffs between marketing and sales, and ideally you can put SLAs in place to ensure consistency in response times. By doing this, you can clearly assess the health of your business, identify bottlenecks and respective fixes, and begin to predict your business outcomes. There needs to be an ongoing focus on the model and an emphasis on iteration as learnings come in—but this is great way to make sure both teams are aligned.
- A focus on driving revenue first and foremost—and throughout the ENTIRE customer life-cycle. This lens must be used across all marketing programs—throughout the journey, from acquisition to retention. You should have a clear way to evaluate if a program makes sense for the business. Now a large brand initiative may be more complex to assess, but it is still important to understand. This starts with identifying goals and determining when you will measure impact, and when (what are the different points in time?). There are times you go through this exercise and it becomes abundantly clear that a program does not make sense to continue. That learning is equally valuable. Here is a simple example: Your team may be considering a tradeshow and the goal is for acquisition. If the event costs $20K, the organizer tells you there will be 300 people attending. You estimate that the team can scan half the people, and you estimate that 30% will have the right demographics. At that rate, you are spending over $400 / lead. That may be fine for your business—or not—but the point is you need to KNOW and then use that knowledge to evaluate the opportunity—and all opportunities with this lens.
- Being data-driven to measure and iterate to make the best decisions for the business. This one goes without saying—but you can’t manage what you can’t measure. The key here is being laser focused on the right things to measure for your business. It’s helpful to have a mix of performance metrics (answering how did you do?), diagnostic metrics (what’s working, how can we improve?), and lastly leading indicators (these should help you forecast how you will be doing). A key part of your planning process is to identify up-front what decisions you need to make to drive company profits, and then build your measurements to capture the right information. This means you should measure things not just because they are measurable—but rather because they will guide you towards the decisions you need to make to improve company profitability.
3 Key Benefits of Transformative Demand Generation
When done well, transformative demand generation provides marketers the ability to do these 3 things:
- Align with sales and other key stakeholders within your organization. By establishing an agreed-upon model upfront, definitions and goals—both marketing and sales efforts are pointed in the same direction.
- Make the right investments for driving the desired business outcomes. It is critical to identify goals for programs (whether it’s a brand campaign or retention) and estimate upfront if your investment makes sense to achieve your desired outcome.
- Be forward looking—and forecast what will occur. You should be able to discuss not only what just happened, but also what WILL happen. This is one of the most critical thing marketers can do to build credibility.
Today’s demand generation has fundamentally shifted. It should no longer be thought of as simple acquisition or the team that focuses at top of the funnel and only generates volume. Transformative demand generation has the power to drive revenue throughout the entire lifecycle of a buyer. Applying transformative demand generation principles will ensure your marketing organization has a framework to align with sales. It sets a new standard to employ tools to attribute, predict, plan, and benchmark campaign performance. You may start to see that half of your programs are not worth the investment—but instead of being disappointed, be glad that you know and are able to identify the gaps. Ideally, the team should be able to predict the future revenue impact of marketing dollars invested.
Marketers—from executives down through the practitioner level—that work within this framework will be able to drive and show the impact across the entire buyers’ journey. These are the marketers that will succeed and, of course, have respect.