What is Demand Generation? The Real Story!

by Marcel Nanning | Last Updated: May 14, 2024

Demand generation literally translated is demand generation. In practice, it means that companies try to create a need or demand for their products or services. This concept is not new; you see it around you every day in the form of marketing campaigns that convince you to buy products you may not really need. Demand generation as we now often see it in the B2B marketing world, however, is about something else. We will dive into that a little deeper in this article.

What is demand generation: a definition

Demand generation is a marketing strategy aimed at creating demand for products or services. It comprises a series of activities and processes that make potential customers aware of a need, provide them with information and guide them through the buying process. Demand generation focuses on delivering valuable content and building long-term relationships with the target audience, without immediately pursuing a direct sale. The goal is to generate a consistent flow of qualified leads and build brand loyalty.

Confusing, isn’t it?

There is much confusion about what demand generation actually entails, especially because it is often confused with other marketing strategies such as content marketing and inbound marketing. Both strategies focus on providing valuable information to potential customers to spark interest and help them make purchasing decisions. This closely aligns with the goals of demand generation, making the distinction sometimes unclear.

Demand Generation vs Lead Generation?

Demand generation is often positioned as the opposite of lead generation. This is because it opposes hiding content behind forms and overloading CRM with poor-quality leads. However, you can also see demand generation as a lead generation method but one that starts from a different perspective and aims to deliver fewer but higher-quality leads. More lead-friendly, in other words!

The Fundamentals

Demand generation distinguishes itself by focusing on removing barriers to access information. Instead of hiding valuable content behind forms, as often happens with lead generation tactics, demand generation advocates for making information freely available. This helps potential customers make better-informed decisions without first having to provide their details.

The basis for this tactic is the understanding that roughly 95% of your target market is not actively looking for your product or service at this moment. Why would you then focus all your efforts on that 5% with frustrating techniques (such as gated content and ads) when you can also focus on building relationships with the other group? By providing this group with valuable content, you build a relationship and remain top of mind when the need does arise.

Top of Mind

The principle of generating awareness and binding target groups to the brand is not new. Above-the-line communication, branding, awareness campaigns, and their derivatives all aim to embed brands in the minds of consumers to be top of mind when the moment arises.

In addition to creating demand for a product from a specific brand, a category need can also be created. Multiple companies in the market would then launch a campaign together to achieve this. In the Netherlands, there are striking examples of this, such as “Milk, the white engine” or “You say it with flowers.”

Demand Generation in Practice

An important aspect of demand generation is consistently delivering value to your target audience, even before they intend to buy your product or service. This can be done through blogs, whitepapers, videos, and other forms of content that provide insights into the challenges and solutions within your field. Removing friction in consuming this content is key. Therefore, marketers are increasingly saying goodbye to gated content and offering content as open content.

Conclusion

Although the definition of demand generation sometimes seems vague and overlaps with other marketing strategies, its strength lies in its practical application: making valuable information freely available. This strengthens the bond with your target audience and can lead to more loyal customers and higher sales in the long run.

In my view, demand generation is old wine in new bottles. However, the idea that we should work harder to build relationships with target groups by providing easily accessible valuable information is something I can only applaud. Demand generation is often positioned as the opposite of lead generation. I see it differently, if anything, it is more a form of lead-friendly marketing.

All in all, we see an interesting development in the B2B marketing world, showing how delivering valuable information can contribute to building long-term relationships, valuable leads, and a more enjoyable marketing profession!