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What Is Demand Generation? [FAQs]

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If you ask 10 different B2B marketers what “demand generation” means, you’ll get 10 different answers.

Unfortunately, there are a lot of misconceptions about demand generation in B2B marketing.

In this guide, we’ll clear up the confusion. You’ll get an updated definition of demand generation, along with the components of a successful demand generation strategy.

And finally, you’ll learn why demand generation is not the same as lead generation.

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What is demand generation?

Demand generation captures the umbrella of marketing programs that get customers excited about your company’s product and services without trying to explicitly sell to them.

Demand generation programs can help your organization reach new markets, promote new product features, build consumer buzz, generate PR, and re-engage existing customers.

Essentially, demand generation is a long-term, education-focused marketing strategy that prioritizes reaching and engaging “out of market” buyers.

 The ultimate goal of B2B demand generation is remaining top of mind while your potential customers are not in a buying cycle — so that whenever the need arises, your product or service is immediately considered for purchase.

What makes demand generation a distinct concept from other customer acquisition tactics is a commitment to long-term customer relationships and a strategic mindset.

Why is demand generation different than lead generation?

Demand generation marketing is about educating your audience with no expectation in return. Meanwhile, lead generation is optimized for capturing contact information – but prematurely pushes non-solution seeking people to sales automation workflows, which is highly ineffective.

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Why are most lead generation strategies unsuccessful?

Let’s explore six reasons most lead generation strategies can be unsuccessful.

  • Misaligned to the modern day buyer’s journey. Gartner research reveals that B2B buyers only spend 17% of their time talking to sales — yet most lead generation efforts are geared toward ushering prospects into a sales conversation.
  • Destroys the morale of sales teams. Since most MQLs by definition are not in a buying cycle, you are exposing SDRs to mental harm by generating large volumes of uninterested leads.
  • Creates a hostile environment between sales & marketing. Where the classic conflict of “marketing is sending us garbage leads” and “sales can’t close deals” results in tremendous inefficiency.
  • Damages brand perception among research-stage buyers. These are buyers that may eventually request a demo when they are motivated and ready to speak to sales.
  • Gating content generates top of the funnel leads. Types of content like white papers, webinars, case studies and free tools primarily collects the contact information of uninterested buyers (MQL).
  • Over-reliance on lead scoring and lead nurturing. With this method, marketing teams are placing a bet on their ability to use behavioral data and intent signals to predict the right sales triggers.

Gated Content: Bad Practices versus Good Practices

Is gated content an acceptable lead generation tool for demand generation?

Let’s start by looking at the biggest drawbacks of gated content:

  • Lack of page views and traffic.
  • No SEO benefit or boost
  • The form deters people from downloading content
  • No brand visibility

But if you’re going to march-on with gated content, it should be done for ABM warm-up, and not direct response sales follow up.

The Role of Inbound Marketing in B2B Demand Generation

Inbound marketing is a key component of any high-performing demand generation campaign. However, this is no longer about content calendars or the AIDA framework.

Instead, it’s about alignment with sales to properly respond to a buyer’s intent to purchase (declared intent), while orchestrating and facilitating the desired purchasing experience.

Today, with inbound marketing, you are either capturing demand or creating demand.

Let’s explore what that means.

Demand Capturing: Intent Channels and Content Examples

Demand Creation: Education Channels and Content Types

  • Social Media Platforms: LinkedIn, Twitter, Facebook, TikTok.
  • Influencer Marketing: Brand awareness or product launch campaigns with relevant influencers in your niche.
  • Email Marketing: Newsletters, content promo, nurture sequences and event invites.
  • Online Communities: The Hustle, Sales Hacker, Demand Curve, etc.
  • Offline Media: Direct mail, NYC subway ads, etc.
  • Offsite Channels: Guest posts, press and thought leadership.
  • Audio Channels: Podcasts, interviews, radio advertising.
  • Video: YouTube, LinkedIn, Vimeo, Wistia, Loom, etc.
  • Events: Webinars, live hangouts, virtual conferences.
  • Conferences: INBOUND, SaaStr, Dreamforce, etc.
  • Forums: Reddit, Quora, Slack, Discord.
  • Brand search volume
  • Your brand vs. competitor brand search volume
  • Organic traffic to high intent website pages
  • Direct traffic (people type your website URL into the browser)
  • Entrances and engagement on your feature / solutions pages
  • Referral traffic from other relevant websites and social platforms
  • Assisted conversions: pages consumed “on the path” to becoming a conversion.
  • Website traffic to conversion rate (declared intent)
  • Qualified demo to sales opportunity rate
  • Proposal sent to closed/won rate
  • Average deal size
  • Sales pipeline velocity
  • Cost per acquisition (CPA)
  • Customer lifetime value (CLV)

The Role of Sales in B2B Demand Generation

Rewind to five years ago and ask anyone about demand generation — they’d tell you it was marketers disguised as salespeople running lead generation tactics via marketing automation.

And that’s because marketing used to be a service organization to sales, until B2B executives realized that marketing should be a strategic partner — not an order-taker.

Today, outbound-focused demand generation is not about high-volume cold outreach with automated follow-up sequences. Instead, it’s about ABM (account-based marketing), the inverted marketing funnel.

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Instead of a top-down inbound marketing approach, ABM is a bottom-up marketing strategy that collaborates with sales to engage with high-quality leads and target accounts during complex B2B sales cycles.

Revenue teams have learned that full-funnel marketing with a hybrid mix of inbound, outbound, and lifecycle marketing is the right balance for a high-performing demand generation program.

Metrics and KPIs for Measuring Success

Your demand generation marketing efforts should be guided by a north star: lead quality.

In addition to understanding key SaaS metrics, these are important questions to ask:

  • Which channels are driving highly qualified leads? 
  • Which lead types most often convert into qualified sales pipeline? 
  • What percentage of our opportunities convert into paying customers?
  • What percentage of our paying customers stick around long enough to become profitable?
  • Which marketing channels are driving opportunities with the best LTV? 
  • How do we generate more qualified opportunities from the best channels?
  • How do we champion full-funnel pipeline visibility?
  • How do we hold sales accountable for working the leads properly? 
  • How can we develop an effective feedback loop between marketing & sales?

Leading indicators: example metrics

  • Brand search volume
  • Your brand vs. competitor brand search volume
  • Organic traffic to high intent website pages
  • Direct traffic (people type your website URL into the browser)
  • Entrances and engagement on your feature / solutions pages
  • Referral traffic from other relevant websites and social platforms

Lagging indicators: example metrics

  • Assisted conversions: pages consumed “on the path” to becoming a conversion.
  • Website traffic to conversion rate (declared intent)
  • Qualified demo to sales opportunity rate
  • Proposal sent to closed/won rate
  • Average deal size
  • Sales pipeline velocity
  • Cost per acquisition (CPA)
  • Customer lifetime value (CLV)

Declared Intent vs. Assumed Intent

Digital marketing has evolved away from direct response, lead generation focused marketing campaigns to a more holistic approach that covers brand awareness, demand nurturing, and demand capturing across the entire sales funnel.

With this in mind, it’s worthwhile to think about the CTA buttons on your website — and what constitutes declared intent vs. assumed intent.

Run a “declared intent audit” to check if assumed intent leads are being treated as declared intent. If yes, that’s a clear misalignment of sales experience and buyer expectations..

This is the decisive test which confirms if your marketing team truly understands the customer journey — a critical component of any demand generation program.

Once you’re acquainted with your buyers’ needs and can anticipate marketing trends, you can fuel your marketing programs with enhanced levels of personalization.

Marketing automation software will help you run A/B tests, choose the right content, and customize timing for each of your marketing campaigns and customer segments.

To begin with your demand gen strategy, get to know your customers and conduct qualitative research through user feedback and conversations. If you’re struggling to understand your prospects’ needs, pick up the phone and ask.

The success of demand generation stems from your ability to connect with target customers. All you need to get started is a point of reference.

Introduction to Lead Nurturing

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