What Is Demand Generation and Why Is It Important?
If you’re thinking about becoming an entrepreneur, one of the most important skills to learn is marketing. Demand generation is a crucial strategy you can employ in your business to get new customers, so it’s good to know what this term means and how it can help grow your business.
What Is Demand Generation?
Demand generation is about getting people talking about and thinking about your business, which increases their awareness and drives sales of your product or service. In the marketing world, demand generation occurs when you proactively identify potential customers and persuade them to buy from you rather than from someone else.
It generates leads for your business using demand generation best practices. This can be done in many ways, but digital marketing is one of the most effective ways. For example, if you are trying to sell mattresses, you might create an ad on Facebook targeting people who have recently moved and are looking for furniture.
You would also include information about why buying a mattress from you would be beneficial, such as discounts or free shipping. Your goal with this type of advertisement is not just to generate leads – it’s also to convince them that they should buy from you specifically by providing value and giving them incentives that other companies do not offer.
To be successful at demand generation, you need to understand what motivates potential customers to make purchases. It’s important because, without potential customers, there will be no sales!
The Importance of Demand Generation in B2B Marketing
It Builds Trust and Engages Your Audience.
Demand generation is one of the most important aspects of B2B marketing. It is about creating interest in your product, service or company. When you have an engaged audience, they are more likely to purchase from you. You can generate this type of interest through email campaigns, social media posts, ads, content marketing, and other marketing tactics.
Attract New Leads
Demand generation campaigns also help attract new leads that can become valuable customers for years to come. These customers typically stay with your business longer because they feel like they’ve discovered it independently.
It Allows You to Target Your Ideal Customers with Buyer Personas.
Once you’ve identified your target buyer personas—the specific needs, challenges, pains, and gains they experience—you can better understand how to speak to them with messaging that resonates.
Armed with this knowledge, you can craft tailored messages to reach them on their preferred channels (e.g., email campaigns vs. social media ads). In addition to using targeted tactics like remarketing, you can provide added value such as educational webinars, online videos, and free trials or demos, white papers, and infographics.
These demand generation best practices allow prospects to learn your solution in depth before making a purchase decision. It’s all part of the long game: attracting new leads today means knowing what they need tomorrow.
It Helps Optimize Your Campaigns with Contact Segmentation
Prioritize which leads to follow up with. The whole purpose of demand generation is to turn your website visitors into leads, which you can then convert into customers. Without effective lead scoring, it’s hard to know which leads are most likely to take action.
Lead scoring helps prioritize your salespeople’s time by identifying leads that are ready to purchase—and those who aren’t quite there yet.
For example, a lead might score in the 60th percentile and be a cold lead that you’ll try to warm up with follow-up messaging. On the other hand, a score in the 90th percentile might mean that they’re actively researching your solution, and you can push for a quick sale.
Demand Generation vs. Lead Generation
Demand generation is the process of creating demand for your product or service. This can be done by engaging with your potential customers through email, social media, in-person communication, advertising, webinars, blogs, and more.
One way to measure demand generation success is by tracking how many people opt-in to your email list or take the next step with your company. Lead generation is the process of capturing contact information from potential clients.
Lead generation aims to get new prospects on your radar so you can follow up with them later. You may do this by researching, sending out invitations to events or hosting contests requiring submitting an email address as part of the entry form.
For example, a company might offer an eBook in exchange for someone’s email address. Successful lead generation can be measured by how many emails are generated versus how many leads are converted into paying customers or general customer feedback.
Should I Use Demand Generation or Lead Generation?
Demand generation is an effective way to generate interest in your product or service, but it won’t do you any good if you can’t capture that demand. Lead generation is the act of converting that generated demand into cold hard leads.
Both are essential if you want a complete marketing strategy that consistently generates excellent leads throughout your funnel. Demand and lead generation work together to provide good-quality leads, which may eventually become paying customers.
The demand and lead generation processes will help you generate attention, buzz, and traffic, which will then be converted into opportunities.
Final Thought
If you are running a business, the question is not whether or not you need to be successful at generating demand but rather how much.
The market will always have customers who need what you offer, so it’s up to you to connect with them. Of course, you don’t have to go door-to-door, either; it’s best if you don’t! Instead, consider setting up targeted advertising campaigns on social media networks like Facebook and LinkedIn.
Or use a tool like Google Analytics to identify where potential customers are visiting your website before converting to the sales page. Once you’ve found these audiences that could potentially buy from you, start marketing to them!
