Demand gen­er­a­tion – strategy for sus­tain­able customer re­la­tion­ships

It’s no secret that the customer is king – and not only in terms of customer service. If you look at the big picture, the mindset is im­per­a­tive for any economic en­ter­prise because without it, there is no profit. So it's no wonder that suc­cess­ful marketers who have to juggle KPIs, channels, and capital never lose sight of their consumers. The aim: to first get them in­ter­est­ed in the product or service and then turn them into buyers who, in a best case scenario, enter into a long-term re­la­tion­ship with the company.

In order to do this, marketers have a variety of methods and strate­gies at their disposal, which can, however, be sum­ma­rized under a common generic term: demand gen­er­a­tion. But what does this rather abstract buzzword mean and how does it differ from other strategic marketing ap­proach­es?

The term "demand gen­er­a­tion" is mainly used in con­nec­tion with the re­la­tion­ship models business-to-business (B2B), business-to-ad­min­is­tra­tion (B2A), and business-to-customer (B2C). Although it is often used quite laxly and almost in­fla­tion­ary, experts and media always use similar wording when trying to define demand gen­er­a­tion: an in­te­grat­ed and mea­sur­able marketing approach that should create lasting interest for a company and therefore lead to more turnover.

Looking at all parts of this de­f­i­n­i­tion in­di­vid­u­al­ly, it becomes apparent how demand gen­er­a­tion stands out from other marketing and customer ac­qui­si­tion strate­gies:

• In­te­grat­ed: Demand gen­er­a­tion combines several marketing ap­proach­es and methods and provides them with a holistic basic strategy (the de­vel­op­ment of sus­tain­able customer re­la­tion­ships).
• Mea­sur­able: As with any e-commerce strategy, the success of demand gen­er­a­tion is tied to pre-defined KPIs. As a data-driven concept, it can be con­tin­u­ous­ly checked and optimized based on feedback from the sub­se­quent stages of the funnel.
• Sus­tain­able interest: The focus of demand gen­er­a­tion is clearly set on creating sus­tain­able customer and business re­la­tion­ships. All measures involved are oriented towards this goal and should generate long-term attention and en­thu­si­asm for a company’s products or services.
• Sales: Demand gen­er­a­tion aims to have a direct impact on sales. For this reason, close in­te­gra­tion with sales is the aim.

Measures used in this marketing approach are specif­i­cal­ly designed for long term instead of only being used in­ter­mit­tent­ly (e.g. in a bulk mail campaign). These include, for example:

• In­ter­act­ing with customers via social media
• Sharing blog posts in business forums
• Hosting webinars
• E-book campaigns
• Per­son­al­ized newslet­ters
• Or­ga­niz­ing and par­tic­i­pat­ing in events

Confusion sometimes seems to exist regarding the dis­tinc­tion between demand gen­er­a­tion and lead gen­er­a­tion - even among pro­fes­sion­al marketing service providers who should actually know better.

Lead gen­er­a­tion refers to the ac­qui­si­tion of in­ter­est­ed parties – so-called leads – who disclose personal data (names, e-mail addresses, telephone numbers, etc.) (cold leads) in exchange for content requiring reg­is­tra­tion (e.g. newslet­ters or com­pe­ti­tions) and ideally have a specific interest in the company’s product or service (hot leads).

With demand gen­er­a­tion, however, this interest does not nec­es­sar­i­ly have to be in the purchase of a product or service. Instead, it can manifest itself dif­fer­ent­ly: For example, a potential customer may want to find out more about a company's offerings by browsing the website, con­tact­ing customer service via social media, or anony­mous­ly trying out a free trial version – without providing any in­for­ma­tion. Therefore, the two terms are like fingers and thumbs: demand gen­er­a­tion is not always lead gen­er­a­tion; but lead gen­er­a­tion can basically be un­der­stood as a component of demand gen­er­a­tion, since no leads can ma­te­ri­al­ize without existing demand.

Inbound marketing is also sometimes confused with demand gen­er­a­tion. This only refers to a selection of marketing measures that can con­tribute to demand gen­er­a­tion.

Inbound marketing follows an approach depending on which customers come to the company by way of searching for in­for­ma­tion or to solve a problem – provided that you’re tech­ni­cal­ly competent enough to help the customer. Es­pe­cial­ly in the B2B area, it is necessary to create added value in the form of blog posts, videos, podcasts, newslet­ters, newsfeeds, e-books, case studies, white papers, or webinars on current industry topics to draw attention to your company. This includes the use of SEO and social media to position yourself as a thought leader and in­for­ma­tion hub.

This is in direct contrast to tra­di­tion­al outbound marketing, in which a company tries to address its target group directly by means of posters, flyers, and tele­vi­sion ad­ver­tis­ing. Inbound marketing therefore also focuses on building a long-term re­la­tion­ship with customers and business partners – according to demand gen­er­a­tion marketing.

In the narrower sense of the demand gen­er­a­tion term, a com­bi­na­tion of inbound and outbound marketing is intended to generate long-term demand to attract potential buyers for a product, service, or company in general. These prospects may become qualified leads, which is why lead gen­er­a­tion is also included in this step. The concept of demand gen­er­a­tion does not rely on the mere number of in­ter­est­ed parties, but claims to carry out a qual­i­ta­tive pre-selection before the actual lead gen­er­a­tion takes over. This is intended to increase ef­fi­cien­cy and ul­ti­mate­ly the con­ver­sion rate.

Once leads have been generated, the process moves to the next step. Through lead nurturing, the es­tab­lished re­la­tion­ship between the customer and the company can be further deepened by various methods of contact main­te­nance. Content, SEO, and SEA are still used, but will be more per­son­al­ized – e.g. in the form of in­di­vid­u­al­ized e-mails based on customer data. In addition, free trial versions, online product demon­stra­tions, and reference man­age­ment (such as customer reviews) come into effect. The ultimate goal is to filter out only the most qualified, mean­ing­ful leads from each touch­point of the customer journey and prepare them for marketing in order to achieve a better ROI.

Next, the qualified contacts are evaluated – this is called lead scoring. Leads are then passed on to the sales de­part­ment in the course of lead routing. Demand gen­er­a­tion also plays a fun­da­men­tal role here: in order to ensure a suc­cess­ful purchase, demand gen­er­a­tion marketers and sales managers must con­tin­u­al­ly compare their ideal customer profiles (ICP), i.e. the criteria for a sales-relevant lead. This com­mand­ment reaffirms that demand gen­er­a­tion as a data-driven marketing concept is heavily dependent on feedback from all levels of the funnel.

To recap: Suc­cess­ful demand gen­er­a­tion marketing must use inbound and outbound marketing to attract prospects who, best case scenario, become leads with at least a non-binding purchase intention. Ongoing lead nurturing should transform these short-term contacts into long-term customer and business re­la­tion­ships. Through close in­te­gra­tion with sales, demand gen­er­a­tion aims to make a visible con­tri­bu­tion to sales growth. The following examples il­lus­trate what a demand gen­er­a­tion strategy like this can look like:

Another good example: The popular mind mapping software, Mindjet, is available as a free 30-day trial version. However, for the purpose of lead gen­er­a­tion, the man­u­fac­tur­er requires that those in­ter­est­ed enter their personal data in order to use this service so that Mindjet can build up a com­pre­hen­sive customer database. More freedom is offered by the product com­peti­tor WiseMap­ping, which is also among the best mind mapping tools on the market. The browser-based open source program is free of charge anyway, but the trial version can also be tried out com­plete­ly anony­mous­ly. This way you can fa­mil­iar­ize yourself with the func­tion­al­i­ty of the tool without entering any personal in­for­ma­tion. You can also donate to the de­vel­op­er­s' PayPal account if you wish – another in­di­ca­tion of how different the interest generated by demand gen­er­a­tion can look.

Spon­sor­ing or par­tic­i­pat­ing in B2B events is another way of es­tab­lish­ing yourself as a thought leader and con­nect­ing with relevant in­flu­encers that further reinforce this position. On these occasions, you can provide potential business partners with insight, i.e. insight into your own expertise, with your own con­tri­bu­tions to dis­cus­sions and workshops. The practical thing about it: as with the webinars, viewers are obviously in­ter­est­ed in the topic in question and therefore have great potential to become qualified leads.

E-mail campaigns can be a powerful tool for gen­er­at­ing demand, provided they meet certain quality criteria. Es­pe­cial­ly in the B2B area, the need for ex­pla­na­tions of products and services is often very great, which is why it makes sense to accompany the rel­a­tive­ly extensive and lengthy pur­chas­ing and service processes with a well-prepared newslet­ter. This way, the customer builds up strong trust in the company at an early stage and can be made aware of further offers at the same time. In the newslet­ter, they should find useful in­for­ma­tion regarding their purchased product, such as tips on its correct use. However, as is often the case, less is more.

The trend in suc­cess­ful e-mail marketing is clearly moving away from regular mass e-mails and towards per­son­al­ized messages that end up in the re­cip­i­en­t's inbox when they are most needed. A thorough software-supported A/B testing of all e-mail com­po­nents is the most effective measure for this, both for the initial contact and for one-to-one e-mails in the later stages of the customer journey.

The US low-cost airline JetBlue Airways, for example, ac­com­pa­nies its customers from the very beginning: A humorous "get to know you" e-mail addresses the recipient directly and gives the im­pres­sion that the US low-cost airline already knows its customers well – long before they have revealed much in­for­ma­tion about them­selves. With this tactic, JetBlue does not nec­es­sar­i­ly aim for a direct con­ver­sion, but primarily tries to recruit more members for its TrueBlue bonus program – turning in­de­ci­sive people into qualified leads. Airbnb contacts the user at important times, for example with a newslet­ter on the first an­niver­sary of an account reg­is­tra­tion, in which the holiday home agency suggests new in­ter­est­ing des­ti­na­tions based on customer data.