While lead generation often chases the thrill of the immediate catch, it can be shortsighted in the grand scheme of B2B marketing. Enter demand generation—a holistic strategy that reliably pushes leads through the funnel, from initial awareness to staunch advocacy. It's not just about capturing interest but nurturing it, ensuring that when prospects are ready to buy, they're thinking of you.
In this article, we'll dive into the most crucial metrics that define successful demand generation. Plus, we'll gain insights from an expert marketer, shedding light on what brands are doing to truly stand out throughout the buying journey in crowded and competitive markets.
Understanding Demand Generation
Demand generation is a multifaceted concept in B2B marketing that goes beyond mere lead generation. It captures the umbrella of marketing programs that get customers excited about your company’s products and services without trying to explicitly sell to them. Here's what it entails:
- Holistic Strategy: Demand generation is a long-term, education-focused marketing strategy that prioritizes reaching and engaging “out of market” buyers. It's about remaining top of mind while potential customers are not in a buying cycle.
- Building Buzz and Reaching New Markets: Programs under demand generation can help your organization reach new markets, promote new product features, build consumer buzz, generate PR, and re-engage existing customers.
- Commitment to Long-Term Relationships: What sets demand generation apart from other customer acquisition tactics is a commitment to long-term customer relationships and a strategic mindset. It's not about immediate returns but about building for the future.
- Difference from Lead Generation: Unlike lead generation, which is optimized for capturing contact information, demand generation is about educating your audience with no expectation in return. It's a more thoughtful approach that aligns with modern buyer behavior.
Demand generation focuses on education, long-term relationships, and strategic thinking. It's not just about attracting leads from parties who are already in the market for your product or service type but nurturing them through a process that builds genuine interest and engagement with your brand over time.
Read more: Gartner’s take on Demand Generation
An expert’s take: top demand gen challenges in 2023
Michael C. a leading marketing freelancer with MarketerHire shares his take on the top challenge in demand generation for B2B:
"Honestly? Patience. People are unwilling to wait because they see the ad campaigns or the cost of content creation (in all its various forms) and see it as wasted effort rather than a loss leader." This perspective highlights a critical shift in understanding demand generation. It's not about immediate returns or quick wins; it's about building for the long run.
Good demand generation takes time, and it might not show immediate results. But it's an investment in the future growth of the business. In an era where instant gratification often takes precedence, this approach requires a paradigm shift. Marketers must view their efforts not as wasted but as foundational building blocks that will eventually lead to success.
Read more: 10 signs you need to focus on B2B demand gen
Our Favorite B2B Demand Generation Metrics
Demand generation metrics provide a roadmap for B2B marketers, guiding them on what's working and where there's room for improvement. These metrics are pivotal in understanding the effectiveness of your strategies and ensuring alignment with business goals.
Engagement is a primary indicator of how well your content or campaign resonates with your audience. As Michael C. points out, one of the first questions to ask is, "Are they engaging with it?"
- Click-Through Rate (CTR): Measures the percentage of people who clicked on an ad or link relative to the total number who saw it.
- Time Spent on Page: Indicates how long visitors are engaging with your content.
- Social Shares: Reflects how often your content is shared on social media platforms.
Video Watch through Rate: Indicates how thoroughly engaged an audience is when a video shows up in their organic or paid social feed.
The next step after initial engagement is to determine if your audience finds enough value to return. Michael C. emphasizes the importance of asking, "Are they returning to it [what you put out into the world]?"
- Return Visitor Rate: Measures the percentage of visitors who return to your site after their initial visit.
- Email Open Rate: Indicates the percentage of recipients who open your email campaigns.
- Customer Retention Rate: Reflects how many customers continue to engage with your brand over time.
Depth of Engagement Metrics
Beyond initial engagement and retention, it's crucial to understand if your audience is delving deeper into what you offer. Michael C. suggests considering, "Are they probing deeper?"
- Pages per Session: Indicates the average number of pages a visitor views during a single session.
- Bounce Rate: Measures the percentage of visitors who navigate away after viewing only one page.
- Conversion Rate: Reflects the percentage of visitors who take a desired action, such as signing up for a newsletter or making a purchase.
Read more: Our guide to B2B email nurture campaigns
Michael C. encapsulates the essence of demand gen metrics by stating, "Your hope is that the demand gen marketing is a bit of a lightbulb that goes off and it makes them curious." This sentiment underscores the ultimate goal of demand generation: sparking curiosity and leading potential customers on a journey of discovery with your brand.
Other Important Demand Generation Metrics
While engagement, retention, and depth of engagement are foundational metrics in demand generation, there are several other metrics that B2B marketers should keep on their radar to get a holistic view of their efforts:
- Closing Percentages: This metric provides a clear picture of how many leads or prospects actually convert into customers. It reveals insights into the effectiveness of conversion strategies, the qualification process, and how well leads are nurtured through the sales funnel.
- Funnel Conversion Rates: Every stage of the sales funnel, especially the middle, has its own conversion benchmarks. Monitoring funnel conversion rates helps marketers understand the effectiveness of their touch points and where potential bottlenecks or drop-offs occur.
- Cost-per-acquisition (CPA) and Cost-per-Lead (CPL): These financial metrics are crucial in determining the ROI of demand generation campaigns. They help define the success of campaigns and are instrumental in refining goals, budgets, and strategies.
- Conversion to MQLs (Marketing Qualified Leads): An increase in MQLs indicates that your targeting and lead generation strategies are effective. It's a testament to the quality of leads being attracted and their potential to become customers.
- Average Deal Size: This metric provides insights into the sales cycles and the potential revenue from each lead or prospect. A larger average deal size can indicate successful up-selling or cross-selling strategies, or that higher-tier prospects are being attracted.
- Lifetime Customer Value (LCV): LCV goes beyond the initial sale, reflecting the total value a customer brings over the duration of their relationship with the brand. It provides insights into account management, customer engagement, and the long-term impact of demand generation efforts.
Considerations in Measuring Demand Generation Performance
When you’re trying to reach new audiences that haven’t heard of you, it’s incredibly easy to blog through tons of cash while reaching an overly wide audience (who will never buy).
Safeguards like effective campaign targeting are crucial. It's not just about reaching a vast audience, but the right audience. Ensuring that your targeting parameters align with your ideal customer profile is essential. Moreover, different segments may respond differently. It's beneficial to:
- Analyze metrics by segment
- Tailor strategies effectively based on segmentation insights
- Go “wide” then press harder in areas with better ROI
Delving into campaign performance allows marketers to understand the nuances of what's working and what's not. It's vital to look at individual campaign components, from ad creatives to landing pages, and adopt an iterative approach. Use insights from one campaign to refine and optimize subsequent campaigns.And just realize that there’s a ton of judgment when starting demand generation, you’re reaching audiences you likely haven’t reached and won’t know what works right off the bat.
Paid Advertisement Channels
Balancing quality vs. quantity is pivotal for keeping paid advertising sustainable in demand generation. While driving traffic is essential, attracting the right kind of traffic holds more value. Evaluating the quality of leads coming from different paid channels and ensuring a positive ROI on these channels is crucial. Adjust budgets and strategies based on performance to maximize results.
The modern B2B buyer's journey is complex. They often interact with brands multiple times across various channels before making a decision. Understanding this complex buyer journey is essential. Adopting attribution models that account for multiple touch points ensures that credit is given to all influential interactions, painting a clearer picture of the buyer's journey.
Alignment between sales and marketing teams is paramount. Regular communication can bridge any gaps, ensuring both teams are on the same page regarding goals, definitions, and strategies. A feedback loop is also beneficial, where sales provide valuable feedback on lead quality, helping marketing refine its strategies.
Periodically analyzing closed-won deals offers insights into successful strategies. Conversely, delving into lost opportunities can provide valuable lessons. Both perspectives are crucial for:
- Understanding what resonates with the target audience
- Identifying areas of improvement
Measuring demand generation performance is both an art and a science. While metrics provide a quantitative view, understanding the qualitative aspects – the why behind the numbers – is equally crucial. B2B marketers must ensure they're not just collecting data but deriving actionable insights that drive continuous improvement.
Demand generation is a cornerstone of B2B marketing, blending strategy, patience, and a deep understanding of metrics. As Michael C. aptly puts it, it's about igniting that "lightbulb moment" for potential customers, guiding them on a journey of discovery with your brand.
When teams are moving from lead generation to demand generation, there are often stakeholder expectations that need to be managed about lead volume and time to close. By focusing a ton on internal communication and metrics, marketers can position themselves as strategic leaders following best practices in today’s oversaturated marketing channels.
If you're aiming to refine your demand generation efforts and seek expert insights: We source the top 3% of marketers in as few as 48 hours to assist with your demand generation. Let's transform those lightbulb moments into lasting customer relationships.