What is Demand Generation and Why Does it Matter?

what is demand generation and why does it matter

What is Demand Generation?

Demand generation is defined as a marketing strategy that is data driven and technologically based. One main objective of demand generation, also frequently referred to as demand gen for short, is to generate interest regarding the company.

With an increasingly expanding global marketplace, businesses are struggling to find ways to make themselves stand out from their competitors. As such, demand generation strategies are more valuable than ever before.

A demand generation strategy should consider every step of the buyer journey and account for each step specifically. The buyer journey includes potential customers in the awareness stage, the consideration stage, and finally the decision stage.

Key performance indicators, commonly abbreviated as KPIs, and data driven analysis are great ways to measure the effectiveness of a specific demand generation marketing campaign. KPIs applied to a demand generation campaign can range from the cost per lead to free tool signup rates.

Data driven analysis performed over time provides a greater understanding of how high quality lead generation occurs. Ultimately, demand gen is an excellent strategy for creating content specific to a target audience and brand awareness optimization.

Benefits of Demand Generation

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Demand generation strategies are a great way to bridge the all too common gap between the marketing department and sales department. This gap is especially unproductive when considering that the primary objective of both departments is ultimately to produce revenue for the same company.

Case studies have found that encouraging collaboration between marketing strategies and sales strategies can increase successful transactions by 38%. Too often, marketing and sales departments separate their interests instead of remembering that tools like the marketing funnel and sales funnel are for the same purposes.

The massive increase in revenue that companies experience as a result of their marketing strategy and demand generation strategies is noteworthy. In fact, the revenue generation increase that occurs as a result of marketing strategies is estimated to be as high as 208%.

However, this same case study found that only 27% of the leads passed from the marketing team to the sales team are ultimately qualified. A prominent benefit of a demand gen strategy is increasing qualified lead rates.

Another significant benefit of demand generation strategies is the formation and maintenance of a company brand. Brand awareness is optimized when potential customers consider a business as a first step in both their research and buyer journey.

An additional benefit is a significant reduction in customer acquisition costs that demand gen offers. A lower cost per lead means that resources that would have otherwise been wasted on failed customer acquisition efforts can be allocated towards more productive purposes.

Elements of a Successful Demand Generation Campaign

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In order to create demand generation strategies properly, businesses must understand the elements involved. Elements of a successful demand generation marketing campaign range from social media marketing strategies to search engine optimization techniques.

A first step of a successful generation strategy is attracting potential clients using data driven knowledge as well as any pain points observed. Demand generation focuses on marketing content that speaks to the customer experience or pain points that a business has.

Search engine optimization is also commonly abbreviated as SEO and is defined as the practice of increasing the quantity of high quality organic search engine results. Search engine optimization is useful in social media marketing and inbound marketing strategies in addition to many other marketing strategy types.

As lead generation is a primary objective of demand generation marketing, offering potential customers a free tool like an e-book or quiz to gather data is advised. Not only does offering a free tool make sure to catch the interest of potential clients, but it generally contributes to both the overall customer experience and buyer journey positively.

Content marketing is a commonly utilized element of demand generation strategies that can be accomplished through communication channels ranging from blog posts to social media platforms. Currently, email marketing is considered the most effective marketing channel available.

A company's blog is a significant element of their demand gen strategy. Blog posts that establish a business as an expert in their industry develop brand awareness and increase customer trust levels.

Content marketing departments should make sure to focus on producing blog posts that are both high quality and data driven. Partnering with similar thought leaders for collaborations or guest blog posts is another way to increase audience reach.

Social media marketing is beneficial for data driven marketing campaigns like demand generation. Creating demand in a target audience can be much easier and result in higher conversion rates by utilizing social media marketing tactics.

Key Takeaways

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  • Demand generation is a marketing strategy that is both data driven and technologically based with the objective of generating interest in a business.
  • The best demand generation campaigns focus on highly qualified lead generation and increasing sales.
  • Providing potential customers and existing customers in the target audience with useful marketing content is a great way to develop long term brand awareness and trust.