What is demand generation in marketing? Your guide

Demand generation is one of the core components of a revenue marketing strategy. It encompasses the various marketing activities aimed at creating interest and generating demand for a company's products or services.

In today's crowded, competitive, and often saturated marketplaces, demand generation is more critical than ever. It involves a combination of inbound and outbound marketing tactics. These are aimed at building brand awareness, generating leads, and ultimately driving revenue growth.

In this guide, we'll explore:

This guide will provide you with the foundational knowledge to build a successful demand generation program. It doesn't matter if you're a senior member or not.

What is demand generation in marketing?

Put simply, demand generation is a marketing technique that allows you to drive demand for your product or service. Demand gen is all about gaining brand awareness, getting your audience excited, and gaining their trust.

This strategy is ideal for gaining more leads in the early stages of marketing. It involves drawing in and educating potential customers to expand your audience.

It’s about providing your potential customers with the information they need at every touchpoint in the customer journey, positioning your brand as a trusted advisor that can foster brand loyalty.

So the goal of demand generation is to increase brand awareness and grow your audience. To do this, businesses can create unique content for their audience and establish themselves as thought leaders in their industry.

Why is demand generation important for revenue marketers?

Demand generation is important for revenue marketers because it’s a critical component of the sales funnel. Marketers can create demand to draw in potential customers. This can move them through the purchasing process, resulting in revenue for the company.

Here are a few reasons why demand generation is important for revenue marketers:

Creates awareness

Demand generation activities, such as advertising, content marketing, and social media promotion, can create awareness about a product or service. This, in turn, can help generate interest and attract potential customers.

Generates leads

Marketers can generate leads through activities such as webinars, whitepapers, and free trials. These leads can be nurtured and eventually turned into paying customers.

Shortens sales cycle

Marketers can shorten the sales cycle by creating demand and generating leads. They can engage potential customers and guide them through the buying process.

Increases revenue

Ultimately, demand generation is important for revenue marketers because it can directly impact the bottom line. By generating demand and nurturing leads, marketers can help drive revenue growth for the company.

Content types for demand generation

Content is key to a successful inbound marketing campaign and demand gen is no different.

Attract your target audience's attention by using paid ads and social media. These methods tend to reach a larger audience. Then to educate your audience you should consider using blog posts or podcasts to gain a reputation as a thought leader.

This strategy should help you attract new customers and gain their trust. Once that's done, you can move on to lead generation tactics to secure a sale.

Here are some content types to consider when you’re planning your demand gen strategy:

Blogs
Thought leadership content
Podcasts
Videos
Social media posts
Paid ads

Measuring demand generation

Ensuring your demand generation campaign is performing well can be tricky. Good thing we have outlined the key demand generation metrics to measure. This will help you keep track of your progress.

Cost per lead

This metric measures the total cost of generating a single lead. Marketing and advertising campaigns involve many expenses, such as: - Pay-per-click (PPC) - Email marketing - Content marketing - Social media advertising.

Organic traffic

Organic traffic refers to the number of visitors to your website or landing pages. These visitors come from search engines such as Google, Bing, or Yahoo. This metric is important because it shows how effective your SEO and content marketing efforts are in driving traffic to your website.

Customer acquisition cost

This metric measures the total cost of acquiring a new customer, including all the expenses involved in generating and converting leads. It includes the costs associated with marketing and advertising campaigns, sales activities, and other overhead costs.

Customer lifetime value

This metric measures the total revenue that a customer will generate for your business over the course of their relationship with your company. It includes all the revenue from initial purchases, as well as repeat purchases, upsells, and cross-sells.

Sales cycle length

This metric measures the length of time it takes to close a sale from the first contact with a potential customer to the final purchase. It includes all the stages of the sales process, from lead generation to lead nurturing, to closing the deal.

Market share is the percentage of the total market that your business or product/service occupies. This metric is important because it shows how well you are competing in your industry or niche.

ROI

Return on investment (ROI) is a measure of the profitability of your demand generation campaigns. It measures the amount of revenue generated relative to the total amount of money invested in your campaigns. A high ROI indicates that your campaigns are effective and generating a good return on your investment.

How to create a demand generation strategy

Success in demand generation depends on creating content tailored to target audiences throughout their buyer journey. It is also determined by engaging them on different channels. The key is to truly know your audience, have a strong understanding of their needs, and how best to provide solutions to their pain points.

Content marketing

Content is at the very heart of a demand gen strategy. Content powers inbound marketing activities that attract prospects into your sales funnel. In fact, in a B2B Buyer Behavior Survey, 76% of respondents claimed that a vendor’s content has a significant impact on their buying decisions.

Good content can be anything from blog articles, case studies, white papers, infographics, videos, case studies, and much more. If you can provide useful, well-written content that resonates with your target audience, then you can entice them into making that first step toward a purchase.

To do this, your content needs to reflect their pain points and where they’re currently at in the buyer journey. It helps lay the groundwork for conversations in the future about how your business can offer them solutions to their problems.

A great content marketing strategy includes helpful insights at each step of the purchase journey, building that confidence and brand credibility.

Before putting together your content plan, consider the following:

The buyer personas of your ideal customers
How these people make their purchase decisions
Their biggest and most pressing pain points
Any roadblocks or concerns that might prevent them from making a purchase

Once you’ve got a solid idea of who you’re creating content for, you can craft content that’s super relevant to your audience, helping you attract high-quality leads. Combine that with delivering that content at the right point in the buyer journey, and you have yourself an effective demand gen strategy.

Brand awareness

It’s one thing to create content that makes your audience aware of a problem that exists for them and their business. But they also need to trust that your brand is the right one to fix their problem.

But getting in front of your targeted audience can be a challenge with so many competitors out there. This is where having a strong brand comes in, and everyone who took part in our State of B2B branding survey considers branding and brand marketing to be a priority to their business.

The goal is to build a brand that potential customers can trust and instantly recognize. So that, even if they’re not ready to make a purchase straight away, your company is the first they think of when they do decide to invest.

With an integrated content marketing approach, you can tackle both brand awareness and demand gen by creating consistent messaging that reaches all levels of the sales funnel.

Tactics you can deploy include SEO, social media campaigns, and email campaigns. Through actions like giving away valuable informative content, you can start to build a reputation as a thought leader in your industry.

Lead scoring

Lead scoring is a way of ranking the sales readiness of a lead. You use data points or criteria to determine a sales-qualified lead and then assign a point value to each of those criteria, leaving you with a final score for each of your leads. It’s a fundamental part of any account-based marketing strategy.

Lead scoring helps you take subjectivity out of the process so you can fully understand which of your leads has the best chance of converting by attributing point values to prospective buyers.

There are different ways to lead score, as you need to assess the attributes of prospects of those that became customers and those that did not. Then, you can weigh the different attributes and determine which of them indicates good leads for your organization.

Lead scoring helps marketers determine where leads are in the sale process, which is essential to figuring out whether the lead needs to continue to be nurtured, or handed over to sales. This process also aids the alignment between marketing and sales and provides a better customer experience as you can then approach them with the right kind of messaging at every stage of the funnel.

Align sales and marketing

Many companies have a communication gap between their marketing and sales departments. But these functions are very closely intertwined, and a lack of synchronization in handling lead acquisition can produce poor results.

Whereas good alignment between these departments can result in a 67% rise in effectiveness at closing deals.

Both teams need to be aligned in a structured way. By improving communication between these two teams and streamlining the marketing and sales processes, you can ensure you have a well-rounded strategy, and generate more demand for your products and services. As well as increase revenue generation by shortening your sales cycle.

Collaborative platforms can help your teams improve their communication with features like real-time updates and internal messaging. This kind of software can keep all customer data in one central place, making collaboration easier.

Marketing will be able to send sales-qualified leads to the sales team, who can convert the leads more effectively. Similarly, the sales team can discover relevant marketing materials to send to prospective clients.

Demand generation best practices

There are 7 key things you need to be aware of when implementing a demand generation strategy.

Define your target audience

Before starting any demand generation activities, you need to define your ideal customer persona. This will help you tailor your messaging and tactics to reach the right audience and generate more qualified leads.

Create compelling content

Content is a critical component of demand generation. Your content should be informative, engaging, and address your audience's pain points. Use a mix of formats, such as blog posts, whitepapers, webinars, and videos, to reach your audience in different ways.

Leverage multiple channels

Use a multi-channel approach to reach your target audience. This can include social media, email marketing, paid advertising, events, and more. Be strategic in your channel selection, focusing on the ones that will yield the best results for your business.

Optimize your website

Your website is often the first point of contact with potential customers. Ensure it's optimized for lead generation, with clear calls-to-action (CTAs), landing pages, and forms to capture visitor information.

Nurture leads

Not all leads will be ready to purchase right away. Implement a lead nurturing program to stay top-of-mind with your prospects and move them through the sales funnel. This can include targeted email campaigns, content offers, and personalized follow-ups.

Measure and optimize

Monitor your demand generation efforts and track key metrics, such as website traffic, lead conversion rates, and customer acquisition cost (CAC). Use this data to optimize your tactics and improve your ROI over time.

What's the difference between demand generation and lead generation?

What is the difference between lead generation and demand generation? They’re two inbound marketing strategies that are often used interchangeably. But in reality, these terms refer to totally different strategies that can be used in tandem to create a successful marketing campaign.

Demand gen creates awareness and interest in a product or service, whereas lead gen turns those prospects into warm leads that can go on to become customers. They take place at different stages of the sales funnel, with demand gen at the top, and lead gen coming later.

If the differences between demand and lead generation still aren’t clear then here is a breakdown of some of the key areas where these terms differ.

Goals

These campaign styles vary in goal. Demand generation is looking to increase brand awareness and gain the customer’s trust - ultimately leading to a demand for your product or service. Whereas in lead generation the goal is to gain the contact information of MQLs so that they can eventually buy your product or service.

Funnel placement

The placement of these campaign strategies within the buyer funnel is rather different. Demand gen campaigns are situated near the top of the funnel, when the target audience may not know about the problem you are trying to solve.

Lead gen campaigns are further down the buyer funnel when potential customers are aware of the brand and want to know how the product/service can solve their problem.

Content

Due to the differences in goals and funnel placement, it’s no surprise that the content involved in these strategies is different. In demand generation, the content is about attracting a wide audience and educating them. This means that blogs, podcasts, social media, and paid ads are great content types for creating demand.

On the other hand, lead gen focuses on bringing customers back and gaining their contact information. This means retargeting ads, events, whitepapers, and reports (which are gated) are more relevant to lead gen.

Using demand and lead gen in your marketing strategy

To get the best results from demand and lead generation strategies you should consider using them in tandem. Using both of these strategies will help you to bring leads seamlessly through the customer journey by targeting them with relevant content at each stage in their buying journey.

Starting with demand gen, you can use social media and paid ad campaigns to gain brand awareness. Then you can present yourself as a thought leader by making use of blogs and podcasts, this will help to gain your audience’s trust.

Once customers trust your brand you can move in with your lead gen strategy, first by using targeted ads and retargeting campaigns to further their interest. Then using gated content such as events and whitepapers to gain contact information, before finishing off the process with targeted email marketing.

This combined strategy allows for a well-rounded approach to inbound marketing and helps to drive customers through the marketing funnel toward being a paying customer.

Curious about how other organizations utilize demand gen and lead gen? Become a Revenue Marketing Alliance member and get your questions answered.

What is demand generation in marketing? Your comprehensive guide

What is demand generation in marketing?