What is Demand Generation?

Demand generation marketing is a marketing strategy that creates demand for products or services. Unlike lead generation and sales tactics, demand generation takes a more holistic approach, focusing on long-term payoff.

While most marketing strategies are designed to convert prospects into customers, demand generation marketing educates potential customers, building brand trust and awareness throughout the process.

Demand generation marketing can help position a business as an industry authority by educating a broader audience. This means that, aside from driving interest in a product or service, demand generation ensures that when the time comes to buy, your business is already established as the go-to option. 

Demand Generation vs. Lead Generation

Demand generation and lead generation are often used interchangeably, but they’re two different things. Demand generation is about creating interest at the very top of the marketing funnel, whereas lead generation is about capturing that interest and converting it into potential customers. 

Lead generation happens in the here and now. Marketing teams and sales teams identify prospects, usually those who have already indicated interest, and turn them into leads by collecting their contact information. This information can be captured in numerous ways, but popular techniques include forms, gated content, competition entries, chatbots and direct contact.

Demand generation happens over a longer timeframe. It sets the stage for lead generation, but doesn’t directly aim to produce immediate sales. Instead, by focusing on connecting with the broader market, demand generation elevates brand awareness, creates buzz and produces sustained engagement.

From heightened brand awareness to long-term revenue growth, the benefits of demand generation are too important to ignore. Let’s take a look at some of the big ones.

Demand generation, by its nature, enhances brand awareness. Every time you host an educational webinar or publish a valuable new piece of content, it opens up opportunities to reach new audiences and establish your brand as a thought leader.

To do this successfully, it’s vital to maintain consistent brand messaging. Consistency is often thought of laterally, i.e., making sure communications are aligned in tone across all channels. But to truly resonate and be memorable, it’s equally important that brand messaging stays consistent over time (ignoring major rebrands, of course). 

In fact, one study has shown that brand consistency has a greater impact on sales over the long run than in the immediate term. Delivering consistent messaging via strategies like demand generation doesn’t just raise your brand profile — it also gives you a future advantage against competitors.

Improved Customer Engagement

Demand generation often provides the first point of contact between your brand and potential customers. It also helps foster deeper and more meaningful engagement with existing ones. 

By distributing educational, top-of-the-funnel content, you can cement your brand as a trusted resource. By addressing your audience’s pain points with informative guides, you can build positive brand associations, helping to strengthen customer relationships.

Interactive tools are another great way to engage customers and generate demand. A report from Gitnux states that 66% of marketers report a rise in engagement rates due to interactive content. Meanwhile, 91% of buyers prefer interactive and visual content over text-based media.

One of the goals of demand generation marketing is to get people thinking, and talking, about your brand. Community-building initiatives improve engagement by encouraging customers to connect with each other and share ideas. Some of the ways this can be done include online forums, live event chats, and social media networking. 

Long-Term Revenue Growth

Converting leads into customers is essential to driving revenue, but what happens when you struggle to find new leads? Investing in demand generation strategies is the only way to ensure that doesn’t happen.

When you focus on consistently engaging with the wider market and turning your audience into well-informed prospects, you generate awareness, interest and trust. This avoids the trap of limited or low-quality leads and, crucially, reduces the risk of declining sales.

Sustainable revenue growth can only be achieved with a long-term outlook and commitment to building better customer experiences. You reduce churn and increase customer lifetime value by engaging with your customers, providing them with valuable information and tools, and nurturing them throughout the buying journey.

Alignment of Marketing and Sales

When done right, demand generation facilitates better alignment between marketing and sales teams. The two should have a symbiotic relationship, working to meet shared goals while feeding information back and forth.

Effective demand generation relies on a clear understanding of the target audience. Sales teams have useful insights to offer marketers, including who the most valuable customers are and which pain points crop up most often. 

When marketers use these insights to refine their strategies, they achieve better results for both teams. Their own conversion rates improve, and they are able to generate qualified leads that are more primed for sales — therefore increasing sales team performance metrics. 

Having more efficient and collaborative processes in place has other benefits, too. Sales teams can ensure customer communication is consistent with previous brand interactions. This means customers are more likely to have a positive experience and less likely to leave negative feedback or reviews, which can have a destructive effect on demand.

Scalability Through Automation

Automation tools and technologies offer scalability almost without limit. For example, the AI-powered Analytics and Content Engine by ON24 can help you multiply your content creation, automatically turning your webinars into e-books or blogs that can be published more widely. 

Scalability isn’t always about reaching larger audiences, though. You can scale demand generation among existing audiences with techniques like personalized content and automated social media posting. 

One of automation’s biggest benefits is its ability to streamline and expedite various business and marketing processes. By decreasing the number of manual hours required, automation reduces the risk of human error and ensures that resources can be allocated more efficiently. This means you can spend more time where it matters — on innovation that drives revenue.

Most marketing automation tools have performance analytics built in as a core feature. You can quickly compile and view data such as engagement metrics, conversion rates and drop-off indicators. These insights make it easy to measure different tactics and strategies, ensuring that you can make informed decisions that scale your results, not just your efforts.

Demand generation is about fueling sustained interest in your brand by educating and engaging your target audience. This is why content marketing is the cornerstone of demand generation.

Content is how you communicate with your audience when they’re not actively engaged in the buying journey. It’s how you ensure that you remain relevant in their minds and how you continue to offer the kind of value that builds long-term relationships.

To new audiences, content allows you to convey your expertise and brand message in a way that’s informative rather than salesy. With a multipronged content marketing strategy, you can attract different audience groups and engage them on a deeper level with unique content that resonates. 

Easily navigable content hubs allow audiences to interact and explore at their leisure. You can create all kinds of binge-worthy content that provides solutions to problems, answers to questions, and valuable insights that showcase your position as an industry leader.

Some of the most common types of content marketing used in demand generation are:

• • Blogs
  • eBooks
  • Videos
  • On-demand webinars
  • Infographics
  • Whitepapers

Advancements in AI have made highly targeted content marketing strategies easier than ever to implement. Personalized content recommendations can be automated, and new pieces of content can be generated from existing assets. 

Inbound Marketing

Inbound marketing has a special role to play when it comes to demand generation strategies. While outbound marketing can be highly effective at elevating brand awareness and reaching audiences at scale, it’s inbound marketing that allows you to hyper-target different audience segments with content that meets their needs and serves their interests. 

Inbound marketing helps you to generate demand via a few different avenues, including:

• • SEO
  • Social media 
  • Press releases
  • Chatbots
  • Guest blogging
  • PPC
  • User-generated content (e.g. reviews)
  • Brand partnerships

Unlike outbound marketing, which is designed to interrupt audiences with unsolicited messages promoting your business, inbound marketing takes a much more natural approach. It focuses on the audience first, often using techniques such as SEO – which aims to fulfill specific search intent with tailored, informative content.

Social media is another great way to generate demand using inbound marketing. It offers the opportunity to engage with your target audience, build a following, and encourage community discussion. You can have two-way interactions with potential customers and deliver thought-provoking content that inspires and connects.

Because of this, inbound marketing often comes across as more authentic to potential customers. Tactics like the ones we’ve discussed allow your value proposition to shine through, facilitating interest and demand in a way that feels instinctive.

Email Marketing

Email marketing is one of the most popular ways to raise awareness and generate demand for new services, products, or features. Broadcast emails sent to your entire customer list are great for communicating at scale, but smaller, segmented campaigns can be even more effective.  

With a segmented approach, you can personalize emails to make them more relevant. Personalization doesn’t just mean populating email copy with the prospect’s name, or even personalized content recommendations. It goes so much deeper than this — you can carve out unique customer journeys, sending targeted information over time to nurture individual leads.

Email campaigns can be pre-designed and automated to send based on specific triggers, such as attendance at an online event or a click to download gated content. With ON24, users can use an AI-powered assistant copywriter to easily test and optimize email abstracts and subject lines so you can improve conversion rates.

Email marketing is one of the easiest to track, with plenty of available data such as open rates, click-through rates, and unsubscribes. This measurability means useful insights are easy to garner and can be fed back through to the strategizing stage, ensuring that your demand generation efforts drive the best possible results.

Event Marketing

There’s plenty of evidence showing that social interaction boosts learning, which is why event marketing should be a fundamental consideration in any demand generation strategy. A human speaker is one of the most powerful mediums to use when you’re trying to educate your audience or build rapport.

Live events and webinars allow you to engage your audience directly. They allow you to communicate your message while facilitating the kind of audience interaction that’s not possible with most other methods.

When you host a webinar, you can do this via built-in polls, surveys, Q&A feeds, and CTAs. By encouraging active participation, you can make your message more compelling and achieve higher levels of engagement.

One of the biggest benefits of webinars compared to in-person events is that all audience interaction is trackable. When a potential customer clicks on a poll answer or provides feedback in a survey, you gain valuable insights into their interests and buying behaviors. These insights can then be leveraged to build stronger relationships while nurturing prospects throughout the funnel. 

With the ON24 Intelligent Engagement Platform, you can instantly turn live webinars into on-demand experiences. This ensures that those in different time zones or with scheduling conflicts can still attend and explore the content at their own pace. 

Your overall lead conversion rate is one of the biggest indicators of how successful your demand generation strategy is. By tracking the percentage of leads that turn into qualified prospects, you can find out if your strategy resonates with the target audience, and the quality of the engagement that it generates. 

To keep up with ever-changing industry trends, your demand generation strategy should be constantly evolving. Monitoring your lead conversion rate means you can quickly identify when a change in strategy has worked, as well as when it hasn’t. You can then decide whether to increase investment in a strategy that’s proved successful or head back to the drawing board.

It’s also important to measure conversion rates at different stages of the funnel. This way, you can evaluate effectiveness at a more granular level, gaining insights that help you understand where and how to increase engagement.

Customer Acquisition Cost

Demand generation is the first step on the journey to customer acquisition, so it makes sense that your Customer Acquisition Cost (CAC) is an important metric for measuring success. 

When CAC is reduced but customer volume remains the same or increases, the effect on ROI can be substantial. This is especially the case if customer lifetime value (CLV) increases at the same time – but more on that in a minute. 

You can decrease your CAC from two different angles. The first is to focus on optimizing your current strategy. By eliminating bottlenecks and bringing down drop-off rates, you can ensure that existing spending isn’t going to waste. You should also analyze your targeting and ensure that you’re putting out the right kind of content to generate high-quality leads.

The second way to reduce CAC is to increase opportunities for potential customers to engage with your brand. This doesn’t have to mean pumping lots more into the budget – using automation, you can quickly scale your output at minimal additional cost. 

Customer Lifetime Value

Customer Lifetime Value refers to the amount of revenue that a business expects to achieve from a single customer account. A high CLV means that customers tend to remain loyal to your business, which is usually a result of providing excellent customer experiences and successful customer relationship management.

When CLV is increasing and CAC is stable or going down, this usually means your demand generation strategy is paying off. You are managing to secure higher quality leads without increasing acquisition costs, and those leads are going on to become repeat customers that generate ongoing revenue.

But if CLV is high and CAC is also high, this indicates problems securing high-quality leads. You are generating meaningful revenue from the customers that you have, but you are wasting a lot on uninterested prospects to get there. This is how you know that your demand generation strategy needs more work.

Return on Investment 

To calculate the ROI of your demand generation campaign, you need to know how much revenue it generated and how much it cost to implement. It can be hard to attribute exact figures, so it’s useful to break things down by channel.

Some channels are easier to track than others – for example, customers acquired via email campaigns can be tracked all the way from first interaction to completion, but content marketing efforts might not have such granular visibility. 

However, by looking at patterns in organic traffic and other inbound channels over time – and analyzing how they correlate with key campaign dates – you can decipher the revenue of your content creation and other inbound marketing.

Once you’ve calculated the ROI of different demand generation campaigns, you’ll be better informed on how to allocate your budget effectively to drive high future returns. 

Engagement Metrics

Sustained engagement is one of the pillars of effective demand generation. So, if you’re trying to understand how well your strategy is performing in real time and want to optimize as you go, engagement metrics are the KPIs you need to be looking at. 

If your strategy utilizes SEO and content marketing, website metrics like pageviews, time on site, and bounce rate can indicate how engaging your content is. For social media campaigns, looking at interaction counts will demonstrate how well your posts are capturing interest, while monitoring follower numbers shows whether that interest is being sustained. 

Content, email marketing and webinars all allow you to easily track and compare engagement metrics across different topics. This information will help you understand which themes resonate most with your target audience. From here, you can optimize future campaigns to better align with those interests and preferences. 

Earlier on, we discussed how aligning sales and marketing can enhance demand generation efforts and lead to better results for both teams. To achieve this, here are a few different strategies to consider implementing:

• Shared goals – the demand gen to sales pipeline benefits from both teams working towards the same goals. Resource allocation and priorities are not in conflict, and accountability is easier to foster.
• Data sharing – the unique data and insights collected by marketing and sales can be valuable to both teams. Enforcing ease of access to this data and promoting feedback loops between teams can transform overall performance. 
• Established processes – clear workflows and hand-offs between departments save a lot of time and unnecessary confusion. You should aim to cultivate smooth processes that can be executed continuously, improving efficiencies each time. 
• Content visibility – ensuring that both teams have access to each other’s internal and external content is key for maintaining brand consistency and the impression of expertise across the business. This means sales teams should be aware of recently distributed blog posts and webinars, and marketing teams should have access to sales decks and case studies. 

Customer Success and Demand Generation

Customer success teams have a vital role to play in demand generation. They can help with understanding customers’ pain points and behavior, ensuring better acquisition and retention rates. 

Customer success teams facilitate better customer experiences through regular check-ins, support, and by sharing insights with the business. Positive customer experiences nurture loyalty and increase customer advocacy – both of which generate demand.