What is Demand Generation -- Fundamentals, Challenges, and Best Practices

Sales | 5 minutes to read

25th Apr, 2021

This is your comprehensive guide to the continually evolving digital demand generation landscape


    • This digital demand generation guide examines the fundamentals and challenges on its path.

    • It also highlights the best practices and breakthrough techniques for unlocking its full potential

    One of the core tenets of all marketing functions and concepts is engaging customers, creating demand, and cultivating loyalty. As businesses transform digitally and fundamentally for the future, managing all these processes has become more automated, comprehensive, and data driven. Digital demand generation encompasses all these techniques.

    It is a systematic and collaborative process of helping organizations across the world to gain a strong foothold in an otherwise volatile and disruptive business landscape. Let us decode the basics of this process, break down its constituents, and understand how to measure the impact it creates.

    Know What is Demand Generation?

    Demand generation is the most widely used term. Many enterprises are vying for this capability. However, it is an unfathomable adobe, and enterprises have very little clarity about it. Haphazard adoption is inversely impacting the ROI. Therefore, enterprises should understand that ‘what is digital transformation?’ and ‘what are its core components?’

    As defined by the Content Marketing Institute, demand generation refers to a set of marketing practices to creating demand for an organization’s product or service. It essentially refers to a broad range of marketing strategies that establish a gradual and sustained customer interest and awareness, paving the way for a predictable pipeline of leads and business.

    Demand generation goes beyond traditional marketing tactics like lead generation or campaigns and aims to cultivate long-term customer engagement using a variety of communication tools. It goes beyond providing a pointed solution or selling a product to an audience and focuses on developing a strong customer relationship by engaging them at every point of the customer journey.

    It is an ongoing process that can be used to introduce new products, expand in new markets, introduce new versions or updates in existing products, re-engage existing customers, or even simply generate positive PR. Although terms like demand generation, lead generation, and inbound marketing are used interchangeably, they are subtly different from each other in their goal and objectives.

    How Does Demand Generation Eliminate Revenue Generation Woes?

    Demand generation is a set of marketing and promotion practices that increase customer awareness and interest about an organization’s product or services. It is usually undertaken to familiarize audiences with new products, introduce new features or upgrades, actively re-engage passive customers, or reintroduce the brand or product.

    Unlike most other traditional forms of B2B or B2C marketing campaigns, demand generation efforts have a broader focus than simply increasing sales or leads. The emphasis is on personalized and sustained engagement that reaps long-term customer loyalty and trust.

    One of the reasons leaders opt for comprehensive demand generation campaigns is developing a predictable pipeline of business that increases stability. By increasing a regular marketing campaign to a sustained effort that follows the customer at each touchpoint in the buyer’s journey, demand generation enables marketing tactics to become relevant, fluid, and responsive to changing externalities.

    That’s not all, demand generation campaigns also help understand customers, their behavior, choices, and preferences in a more nuanced manner and provide insights that the average user profiling cannot offer. All these data-driven benefits and insights help organizations gain an edge, engage with audiences most effectively, and acquire more customers. Once set in motion, these efforts provide recurring returns in increased revenues and higher customer loyalty.

    Demand Generation vs. Lead Generation: A Closer Look

    Demand generation is often confused with lead generation or inbound marketing due to their overlapping goals and implementation tactics. We did a faceoff: demand generation vs. lead generation to compare both the marketing practices.

    However, a better way to understand the relationship between the two is to imagine lead generation and inbound marketing as a subset of the overarching demand generation process, which tends to be more long-term and flexible.

    While lead generation has a comparatively conservative goal of obtaining as many quality leads as possible, demand generation focuses more on customer awareness, brand positioning, engagement, recall value, and loyalty. Both these processes coincide, but demand generation is initiated earlier and has no definitive end-point, unlike lead generation.

    Thus, lead generation is squarely focused on collecting the information of interested leads from a wide audience, which is then nurtured for sale. On the other hand, demand generation is more concerned with creating the right awareness, interest, and narrative about the product or service and ultimately creating an engaging relationship with customers.

    Roadblocks Ahead: Prominent Demand Generation Challenges

    A variety of developments over the past few years, and specifically the past year, has made the marketer’s job challenging. Customers today are empowered with many sources of accurate information to make informed choices and hold businesses to high levels of scrutiny. B2C companies need to invest time and resources to build a quasi-community of customers and be responsive to their expectations. More than that they need a foundation of truth for identifying and segmenting their prospects.

    One the other hand, the marketing function is expected to perform spectacularly, even amidst disruptions or limited resources. The increasing adoption of AI-powered and data-driven tools have also raised expectations from the marketing community, without necessarily providing them with the resources to deliver.

    These multi-faceted challenges mean that marketers and experts need to keep innovating and deploying creative strategies to deliver results. Their efforts need to go beyond implementing lead generation or inbound marketing campaigns in isolation, which often leads to siloed strategies and disjointed processes.

    So, how do marketers deliver in the face of these mounting challenges? Modernizing and upgrading the demand generation framework to tackle the contemporary challenges and reflect the realities of today is crucial to overhaul the entire role of the marketing function.

    Elements Needed for Successful Demand Generation Campaigns

    Although demand generation deploys some fundamental marketing and promotion tools, their focus and implementation varies considerably. Here is a breakdown of a few prominent elements of digital demand generation processes:

    Those unfamiliar with the term might find the concept of demand generation strikingly similar to several existing marketing practices. While this may be true to an extent, the biggest difference is that demand generation is planned and implemented keeping specific larger business goals in mind, and is not focused on a single of the organization’s product or service.

    A thorough understanding of customers – A foundation of truth: The bedrock of an effective digital demand generation campaign lies in understanding the audience being targeted. There are several ways to go about it, the most common being creating detailed buyer personas that contain personal details, demographics, profession, location, challenges, motivations, purchasing preferences, and expectations, among other things. Most organizations tend to push out mass surveys or generate personas based on customer’s digital activity, which only provides half the view.

    Experts suggest going for quality over quantity and opting for more personalized data collection methods, like interviews and focus group discussions. Understanding customer challenges, pain-points, and expectations will help understand the buyer’s journey from their perspective and provide insights on possible solutions.

    Know how to build a marketing database that illuminates sales intelligence. Read this Blog: How to Build a Marketing Database and Configure it for Success in 2021 & Beyond?

    The right content mix: Content marketing is an integral part of digital demand generation, but it is vital to remember that the objective isn’t to sell or promote a product. The content should attract a diverse audience and help them gain awareness. As opposed to paid ad marketing campaigns, using the right content can provide access to an interested audience and provide an opportunity for active engagement.

    Crafting content as per the needs of the users defined in the persona means providing answers and solutions to all kinds of questions they might pose. Think user guides, explainer videos, reviews and comparisons, industry trends, and similar content. Blogs, white papers, videos, tutorials, e-courses, webinars, and roundtable discussions are some common ways to create and distribute the content to the intended audience.

    Thus, strengthening the top-of-the-funnel content by offering valuable content that reflects the values of the organization can significantly boost demand generation results. Creating relevant content that addresses all prospective questions that may arise during the customer journey helps drive traffic, understand the audience better, and respond to their needs.

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