How to measure demand generation success (so it doesn’t become lead generation)
As we have a nosy around vendor and SI land (with consent, we have friends there), we’ve noticed a trend. In many cases, what looks like a demand generation program is often a lead generation program and a bunch of ZoomInfo data hiding inside a trenchcoat.
It seems that most vendors are actually running “Demand Competition” programs, focusing on in-market accounts and letting the sales teams loose to compete for those deals. Then lamenting over poor win/loss ratios and low-value results.
Measurement is the issue. Vendors have taken a sales methodology and wedged it into marketing as marketing grows more critical. It’s very “square peg, round hole”. So, this article will outline the differences between demand generation and lead generation, how to measure demand generation success and what it means for your marketing and sales teams.
Demand generation vs lead generation; there’s meaning in the difference.
Demand generation has lost some meaning. Here’s how we define it in our account-based marketing (ABM) informed view:
“Demand generation refers to a target account, whose employees are not aware of you, gradually understanding through your content and your outreach that their unknown/known issue is not only important but can be solved by your product/service.”
Perhaps “demand discovery” is a better term. Regardless, there’s one universal caveat; outreach, in this instance (in most instances), does not mean cold-calling.
Despite the frequency with which vendors get them muddled, separating the two is straightforward. Demand generation attracts your target audience. It’s how you reach new markets, boost brand awareness, educate people and earn their trust.
Lead generation is how you convert that highly qualified audience into customers. Marketing tactics like CTAs that encourage people to pop in some contact information, and other lead capture forms through social media, for example.
Bring them together, and you’ve nailed the B2B sales funnel. However, such a harmonious existence is perishingly rare. Much like harmony between sales and marketing functions. Funny, that.
Vendors often end up doubling down on lead generation and pumping out marketing content under the guise of demand generation, but which is actually no more than a pretty way to collect email addresses.
Why? It comes down to intent. What are you aiming to achieve with your marketing?
To create a contact that your sales team can sell to?
Or to educate and create value for people and drive awareness of your product and brand and what you do?
If number one has you re-enacting that Drake meme, we politely (but firmly) slap your wrist. As an ABM business, we firmly believe that running content is the way to go about demand generation. We repeatedly demonstrate the potency of creating a compelling value proposition and using meaningful and considered creative to bring those issues to life. Because the goal of running content is for people to consume it. That’s difficult to pull off when every editorial you create is gated.
How to measure demand generation success
Since the dawn of time, B2B companies have been sales driven. But at some point, people started pushing the sales methodology into marketing as marketing earned more clout. Anything regarding helping the sales team sell became the marketer’s job.
Swathes of B2B marketing functions turned away from creative, instead just running ads etc., while chasing after the outcomes as the sales function. More square pegs, same round hole.
Sales got this much right – be it demand generation or lead generation, you must measure (always measure). But measuring your marketing function by the same yardstick as the sales team puts them in a creativity straight-jacket.
Think depth, not reach – “how many people sat and read every word of my LinkedIn post” beats “how many people saw it (and scrolled on by)?”
Think quality over quantity – 1,000 people watching your webinar trumps 1,000,000 who saw your logo. Every time.
Keep sales KPIs in the sales teams. Here’s how to measure your marketing:
Percentage of revenue contribution – what percentage of revenue is coming to you vs you going to them?
Win rate percentage (1) – how well are you telling people what you can do for them?
Marketing-sourced pipeline generated – how much (qualified) pipeline is coming to you?
Sales cycle length – especially compared to your outbound channels
Win-rate percentage (2) – specifically marketing-sourced vs your outbound channel
Customer acquisition cost – no need to explain CAC. It’s just a fun acronym. CAC.
Not a single metric about the number of leads gathered in sight. How refreshing. Measuring these metrics will only become more necessary as how technology buyers research, discover and evaluate products continues to morph.
Podcasts, 3rd party events, forums, organic social – the very areas that you should be producing content for are the places your targets hang out – and that you can’t track. Companies that execute well on these channels are winning business right now.
What it means for your sales and marketing functions
Ironically, encouraging sales and marketing functions to ‘align’ their efforts has the opposite desired effect. They’re just chasing the same leads and each other’s tails. To arrive at that holy place you’ve been searching for – sales and marketing alignment – aligning on the outcome is what matters. The means, however, should differ.
Be it pipeline generation or lead conversion, measure your marketers’ demand generation efforts by the metrics that they’re best suited to impact. Do that, and you’ll be letting your marketers do actual marketing, letting sales do more impactful sales.
Of course, there will be ramifications later down the line for how this impact how you structure your sales and marketing teams – but that’s an issue for another day.
So, the TL:DR: unclip your marketers from their creativity straight jackets by measuring the right things. You’ll find you have some brilliant creative minds in your team, your pipeline will start filling and your sales team will start closing more. Create to help – the sales will follow.
You create content to be consumed, so let people consume it. A small example – we’re beavering away to create a backlog of content for our events brand’s upcoming event, The Hundred. It’s one day where digital leaders get together and share. Share knowledge, share insights, share contact details – whatever you feel is right. All with the aim of really moving the needle in 2023.
In the spirit of the event, we’re putting together an exhaustive list of 100 takeaways – 100 things you can do now, that will move the needle forward tomorrow. It’s something we will be sharing with you. And one of our most recent examples is particularly pertinent to this article:
“Make more content and focus on micro-consents. You need data 1st party data, but businesses have destroyed trust with consumers about data. Focus on delivering genuine, helpful content without any motive (focus on the 98% of stuff your business doesn't do, but that your customers care about) and only ask for small bits of incremental data when it’s relevant.”
Our approach, in a nutshell. (Oh, and if you think you can top that – or have any other tasty points to share – submit them via this form).
If you want to chat about how content-led demand generation (what we call ABM) can fill your pipeline and help you close more deals, you can chat with our ABM and content specialists here. You’ll make their day.