No Such Thing As Demand Generation

It’s very common for marketeers to talk about something called demand generation.  Often it’s abbreviated as demand gen, or sometimes as lead gen, and these terms typically refer to the activities associated with “generating leads” for the sales department.  Often times, demand gen is viewed as the primary function of a marketing organization, and therefore justifies the department’s very existence.  As a result, we like to discuss demand gen strategies, lead gen campaigns, tactics, tracking tools, and do everything we can to highlight our skills by reporting how many hot leads were created for sales.

But, it’s all a sham.  Marketing doesn’t generate demand.  Nor does it create leads.  In fact, there is no such thing as demand generation.  In a free market, demand exists as the result of one’s individual (or corporate) needs or self interest.  My business has a problem, thus it has a demand for some product/service to solve it.  But that demand arises out of the needs of the business itself – it wasn’t created by outside influences, and certainly not by some marketing department.  Unless marketing is out directly causing problems for customers, it really isn’t generating the demand.  To be more accurate, what we as marketeers are really doing is exploring the market to discover what and where demand exists.  We are fishing for potential customers,  not creating the fish.  Marketing “lead gen” campaigns are like nets thrown into the sea, in the hopes of finding out what demand is swimming around in search of certain products and/or services.  Determining where the best watering holes are equates to where we can best find that demand.  Adjusting our nets, hooks, and bait is akin to determining which of our product/service portfolio most successfully addresses the demand.  Instead of demand generation, it should really be thought of as demand exploration.

Without this understanding, false expectations can get assigned to the marketing department.  Sales may expect marketing to deliver a certain quantity or type of lead, so that it can simply fill the sales funnel, and meet quotas.  Often, the measurement is oversimplified in terms of number of leads.  Example:  “I need 1,000 leads, so marketing, you need to create a call out campaign and event road shows that will generate the demand.”   But there is a danger of building that funnel on a false promise and simple metric.  What if the true demand is not large enough to actually fill the funnel?  What if competitors have already absorbed the majority of the available market?  What if our portfolio doesn’t really address the problem for which solutions are being demanded?  What if we call into territories and conduct events in regions where the demand doesn’t even exist?  When expectations are misaligned and hit these market realities, it typically results in poor reviews of the marketing team.  “I got you 1,000 leads (or even 2,000 leads).  Yay!”  But none of them are actually qualified, or have anything to do with our product/service.  “I got you 850 leads.  Boo!”  But how many turned into sales?

Identifying where and when to reach customers with demand for your product/service is actually a very difficult challenge.  It requires a thorough analysis of the relevant industry to understand the available market, and what products/services address the existing demand.  Sophisticated models must be constructed to determine where one is most likely to find the demand (targeting), what the nature of the actual demand truly is (qualification), how to properly position the relevant product/service offering to ensure a viable sale (messaging & value proposition), and usually how to best a competitor or two (competitive analysis) and by how much (market share).  These are concepts to explore in future blogs, but the point is that if none of this work has been done, no amount of demand gen is going to satisfy the false expectation.

Once these models have been built, assumptions vetted, and reasonable expectations set, then (and only then) is it time to go exploring.  Happy planning, before happy hunting!

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3 thoughts on “No Such Thing As Demand Generation

  1. This is SPOT ON and so exactly how my company thinks. Oh I didn’t mean to imply that my company thinks like you. No, my company thinks exactly the opposite of how you think. My company believes that not only is demand gen and lead gen the most critical thing we can do, but we’re a channel based business and my co’s marketing people believe we need to spoon feed this to our channel.

    Last I remember the V and A in VAR stood for Value Added, not Very much Addicted to us spoon feeding them Resellers.

    Nicely written.

  2. We call it “opportunity identification” — I will never use the term “luck” with my sales team, but that’s what it is: I hit someone at the right time when they have the specific need, and that’s the only time it turns into a “lead.” Agree with you, but can’t stop doing it because our manufacturers demand it of us. (Mr. Cubicle View – we are a VAR, and we do all of our own opportunity identification. Sorry you have such a poor view of your channel partners who ultimately help you make your number.)

  3. Pingback: Are you “Generating Demand” for your product? If so, you are a Marketing Moron. | shadub

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