£0-1 M Revenue
25th February 2021
James Brayshaw, Winshaw
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We cover the eight essential areas you absolutely need to consider before creating your demand generation strategy.
If you are reading this then you probably already know what you need. But to spell it out clearly, demand generation is the term increasingly being used in B2B digital marketing to describe everything from content marketing to lead generation. It crosses over with brand strategy and website design at the top of the funnel, right down to the sharp end of revenue generation and business growth. If you have responsibility for any aspect of company growth, from strategy to marketing, product management to sales, then you really should be considering a demand generation strategy.
So why do you need a demand generation strategy? If you are trying to answer any of the following questions, we'd suggest reading on:
The list goes on, but ultimately, if you are looking to increase the number of customers for your business, product or brand, creating a demand generation strategy is the place to start.
We frequently see organisations diving straight into the detail when it comes to demand generation. The desire to act quickly is often driven by short term revenue targets. This tactical activity can prove effective in the short term but is high risk, expensive and draining for all involved. To avoid falling into this trap, it is important to take a step back and consider the bigger picture. Being able to answer the following questions will allow you to create a much more balanced demand generation strategy:
You will notice we focus on the individual. Even with B2B demand generation, there is a person out there trying to solve a problem, however big or small. This is the start of understanding personas within your demand generation strategy. Once we can start to see the world from someone else's perspective, we can start to build our demand generation framework.
Most websites act as a brochure-ware, or validation site. Search for the company name and you will most likely end up on the company homepage (and if this isn't the case, you probably have even bigger problems!) But people only search for a company or product name once they know who or what they are looking for. This sort of activity happens much lower down in the buying cycle, and so when designing a demand generation strategy, it is vital that you consider how people look to solve their problems much earlier in that journey. If you were new to the car buying process, this is the difference between searching for "what is the best 7-seat car" versus a specific search for a make and model number. Both are relevant, but consider the stage in a buyer journey when mapping out your content marketing plan.
Now once we understand pain points and buyer journeys, we can start to define our lead qualification process. The worksheet below lays out the key stages in a lead qualification process. In marketing terms, we are looking to match our content and contact strategy to these stages:
And nowadays, the initial sale is just the start of a much longer term relationship and top performing organisations invest significantly in the onboarding and ongoing customer experience to really drive home the investment in product development and customer acquisition. Customer advocacy, if not evangelism, is where the real network effects are witnessed. Personal referrals and word of mouth remain the most effective form of demand generation. If you find that this is where most of your inbound enquiries come from, adding in a professional demand generation strategy will only serve to turbo charge your business growth.
Infographic: Lead Qualification Worksheet
Estimating your budget for lead or demand generation can be a challenging exercise, especially if you don't have much supporting data. Presumably you know your current spend and how that corresponds to inbound enquiries. This can be a useful place to start and would allow you to target a percentage uplift in inbound leads.
The other approach is to work backwards from the desired outcome. The following worked example helps explain this:
Now there are many other variables to consider when setting this budget and that is a fairly wide range, but it's a starting point. The following sample budget shows how that might manifest itself for a business (or business unit) turning over £50m per annum.
Line Item |
Description |
Monthly Cost |
|---|---|---|
Marketing overheards |
Marketing automation platform , licences and other fixed costs |
£2,500 |
Inbound content marketing |
Video, white papers, blogs and webinars |
£7,500 |
Outbound demand generation |
Telemarketing, email and channel sales |
£7,500 |
Promotional and advertising spend |
Non-organic amplification of killer content |
£1,500 |
Total |
£19,000 |
If you are new to demand generation, committing to a full year without any supporting internal data may be a hard sell internally. But although these growth systems become more efficient at scale, it is possible to test this strategy without committing a significant chunk of your marketing budget. A brand refresh and new website are often triggers for considering a new approach to lead generation. It is possible that you could get budget to undertake this work, without doubling down on your demand strategy, the end result of which may be fairly underwhelming (in terms of inbound enquiries). If you find yourself in this situation, it may be worth trying to test the impact of a professional demand generation strategy in parallel with your new website. If you have just splashed out on a new brand and/or website and it isn't generating enough inbound enquiries, then you probably already have the proof you need that something needs to change.
So anyway, here are three quick and easy ways to test your inbound marketing strategy:
With all options above, we suggest you tag people and share via multiple channels (social, email, etc) with a suitable call to action. Don't expect miracles but try to measure whether this increases engagement or hopefully generates any inbound interest. If you already have a decent website and marketing automation platform, you could run or commission a 1-3 month trial campaign to treat this as more of a formal, budgeted pilot.
“If you can learn a simple trick, Scout, you’ll get along a lot better with all kinds of folks. You never really understand a person until you consider things from his point of view, until you climb inside of his skin and walk around in it.”
Atticus Finch, in To Kill A Mockingbird, by Harper Lee
Sales team often get caught in the crossfire between strategy, product, leadership and marketing teams when things go wrong. It is very easy to blame the sales team when you miss quarterly revenue forecasts or broader growth targets. How sales team handle this says a lot, but if not addressed from the outset, ineffective demand generation strategies will lead to your sales team being left carrying the can. In the absence of a coherent demand generation strategy, sales teams will shoulder the burden of lead generation, scoping, deal closing, negotiation and even delivery. Even the best sales reps will struggle to maintain motivation and energy levels beyond a single quarter of panic selling.
The first thing to consider is the structure of the team, and how differing skillsets will enhance your demand generation process. The outcome of successful demand generation campaigns is an increase not only in quantity, but quality of inbound enquiries. Handling this type of enquiry requires a much more personal, consultative approach. It also requires a level of honesty not always present with more "traditional" sales techniques. The favoured model of starting with a short 15-30 minute discovery call to undertake some top level fact finding should be followed with a more in-depth scoping or solution workshop within the following 1-2 weeks. The skills and style of these consultative sessions can therefore be quite different to the intensity and style of contact required at the top of a sales funnel. So, do you look to hire someone who excels at both outbound business development and solution selling, or split the process into two roles? Your call.
It may be that a split between in-house and agency will work well, allowing you to focus your headcount and training budget on internal subject matter experts, whilst commissioning a partner or agency to act as a new, incentivised lead source.
Prior to getting started, estimating your likely return on investment (ROI) is normally required to get approval to proceed. In the case of demand generation, the formula we are interested in specifically is Return on Marketing Investment (ROMI). And for the purposes of most campaigns and budgetary sign-offs, we are really only able to track short term tangible returns. Spend should be fairly straightforward and can be taken from your budget. Return can be calculated as revenue or profit contribution over a period of time. With revenue able to disguise all sorts of hidden perils, we suggest using projected gross profit from the first 12 months of any contract won as a consequence of said demand generation campaign. So, put simply, estimated Return on Marketing Investment (ROMI) = (12-month Gross Profit - Campaign Budget) / Campaign Budget.
But we still have to forecast the potential gross profit from this planned activity. Let's return to the example quoted above. In this case, the budget suggested ranged from £75,000 to £300,000. On the gross profit contribution, our targeted revenue from new contract wins was £15million. Assuming a 25% margin, this provides a profit contribution over 12 months (a return), of £3.75million. To err on the side of caution, lets assume we hit 50% of our target, leaving an in-year profit contribution of £1.875m.
Our Return on Marketing Investment at the top end of the budget is therefore £1.875m less campaign costs (£300k), divided by the campaign costs (£300k). This calculation delivers a ROMI of 525%, or 5.25x. This implies that every dollar spent on demand generation delivers a contribution of about $5 to the bottom line.
Translating this theory into practice requires patience, discipline and a robust deal tracking methodology. You should not have to wait until the campaign has concluded and 12 months have passed to know whether a campaign will be successful. By utilising leading indicators such as website visitors, downloads, inbound enquiries, proposals, pipeline value and conversion rate, you should know within 6-12 weeks whether you are on track. And by knowing whether you are on track or not, you will be able to improve and iterate your process in real time to enhance its impact.
The beauty of a hybrid inbound and outbound demand generation strategy is that it is both always on, and easily scalable. If a campaign has worked for a particular product or sector, then doing more of the same is a relatively easy decision to make. More fuel in the tank should equate to more miles covered. And once setup, keeping it going requires less resources than tactical campaigns, hopefully allowing you to sit back and watch those leads drop into your inbox! Beyond a trial campaign however, this approach can be extended into different sectors or territories in a similar way. Layering one campaign on top of another allows each respective business unit to prosper, whilst ultimately compounding the benefit when selling into enterprise as multiple stakeholders will have been engaged by different campaigns. The question then shifts from one of whether to push forward with a demand generation strategy, to one of how to ensure consistency and coordination at scale.