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Demand generation is about lead generation and oh-so-much-more

In recruiting for a Demand Generation Manager role I’m finding there’s a lack of universal definition of the term demand generation – it’s not broadly understood – ironic considering every business by definition needs to scale and accelerate their demand generation (at least, if it wants to grow).

I’m finding a set of people who think of demand generation way too narrowly, for example:

  • Some equate demand generation to an outbound calling function (in a previous post on defining Moneyball Marketing I got into the difference between demand generation and lead generation)
  • Others equate demand generation with marketing automation (I thought Scott Vaughan from Integrate did a good job of describing the differences in a recent post)

A successful demand generation marketer massively broadens from these specific functions to truly take ownership of the multiple facets of demand growth for a business. It cuts both wide and deep, but I’ll boil it down to these 10 components:

#1 – Leads (with Definitions)

I’d be remiss if I didn’t list leads first – but it’s also vital to note that gone are the days where leads are the “be all, end all.” Also gone are the days where all leads are treated equal. A crucial first step in any demand generation program is ensuring lead definitions are established, applied and measured so that you can measure both top of funnel engagement (MQIs – marketing qualified inquiries) and throughput of creating qualified leads for sales (MQLs – marketing qualified leads).

#2 – What Happens After the Lead is Generated

Although lead counts are one of the critical KPI for demand generation success, measurement needs to extend beyond leads to sales pipeline and business impact – so opportunities and wins (and the conversions rates to these) are vital. For demand generation marketers, meeting lead goals is table stakes; tracking and improving how those leads convert to meet opportunity and pipeline objectives is where you move from good to great.

#3 – Enabling Teleprospecting and Sales

One of the influencing factors to conversion rates is how you as the demand generation marketer align your programs and equip sales to follow up the leads and the resulting conversations. Part of a successful marketing program include enabling sales in what content to use as part of the follow up and how to use it.

#4 – Aligning All Forms of Media to Drive Demand

Demand creation is not a single role on a marketing team – demand creation is the culmination of the alignment of the efforts of the entire marketing team.  All forms of marketing awareness and engagement contribute to demand generation programs. Demand generation needs to partner with all marketing resources to ensure cross-channel alignment and leverage including:

  • PR
  • Social Media
  • Events
  • Paid Search
  • Publisher programs (which are requiring an increased level of creativity and digital thinking to drive effectiveness)
  • Email
  • Webinars

#5 – SEO & Website Optimization as the Center of Demand

Inbound marketing is vital to any demand generation strategy and becomes especially vital for any business looking to scale to support high volume and low cost per lead. Thus core ongoing activities to improve website performance include:

  • Ensuring the right technical setup for website & blogs
  • Aligning web content to keyword strategy
  • Driving high volume of relevant, engaging content creation via blog(s)
  • Driving quality, relevant inbound link placement in partnership with PR programs
  • Ensuring web resource center serves to engage and educate prospects and effectively capture leads
  • Analyzing website usage patterns and improving website engagement and conversion
  • A/B testing and optimizing various calls to action throughout the website

#6 – A Content Repurposing Machine  

Depending on a company’s structure, a demand generation marketer may or may not be the originator of core content e.g. white papers (I think more often than not, they would not be). However demand generation marketers need to be expert content repurposers, taking core content assets and getting maximum impact from those assets. Some examples include:

#7 - Influencer Strategy

It’s one thing for a business to tell its prospects how great it is – it’s another thing entirely for an influencer to do that. Identifying the influencers and building programs to leverage them is a great way to stand out from the crowd. Influencers should be infused in your demand generation programs and content, and influencers can be the path to the another key to demand gen success – which is identifying which communities your prospects are participating in so that you can contribute to those conversations.

#8 – Marketing Technology Strategy

I’m finding one of the value aspects of a marketing automation system is having a single platform which can then integrate across all of the growing set of marketing technologies in building a demand generation machine. Your marketing technology strategy should result in an integrated approach, with the marketing automation platform as the integration point and including:

  • CRM & closed loop reporting
  • Incoming data enhancement technologies
  • Data append / cleaning technologies
  • Paid search
  • Retargeting
  • Webinar platforms
  • Predictive lead scoring

#9  – Leveraging all Routes to Market Including Partners

For organizations who go to market via partners, supporting partner demand generation is critical for maximizing demand. This includes ensuring an active program to leverage marketing programs and content through the channel, with technologies, process and people in place to help partners maximize their demand and measure the impact of the efforts.

#10 – Customer Marketing (it can no longer be an afterthought)

Customer marketing can no longer be an afterthought and needs to be a core cog in your demand generation strategy. Elements of this include:

  • Programs for nurturing customers – Marketo has recently put out some good content around this focused on customer activation
  • Ongoing customer education e.g. a customer webinar series
  • Customer advocacy – Influitive puts out great content on this subject, which should include a customer referral program

These are some additional articles I found helpful in framing and defining Demand Generation:

This is all to say, demand generation isn’t easy and requires a completely holistic and integrated view (integrated by medium, integrated within marketing, integrated with sales), a digital approach and a tenacity to get results. These are all reasons why great demand generation marketers are hard to find.

I’m going to introduce you to the best Demand Generation marketers I’ve found in an upcoming series Demand Generation All Stars – The Best of the Best.

Finding common ground on closed loop reporting via Boston Marketo User Group

Today’s Boston Marketo User Group (BMUG) featured three presentations and Q&A on closed loop reporting from Paul Green of Extreme Networks, Lauren Brubaker of NetProspex and yours truly and well chronicled on Twitter by many of the Marketing Automation-erati including Jarin Chu, Jeff Coveney, Ed Masson and OpFocus.

The presentations and conversation spanned a wide range of topics and perspectives, but these were my top overarching takeaways:

#1 - EVERYONE is trying to improve their closed loop marketing effectiveness

Companies may be at different stages in their journey towards closed loop reporting, but every business spending money on sales & marketing is trying to better understand the payoff on their investments and how to leverage those investments to scale their business performance.  Many companies are in the early stages and trying to head in the right direction, while the ones who have been working on it for several years continue to strive for more.

#2 – The skills of marketing technologists as in demand as ever

With a room full of some-70 marketing technologists, the conversation was clear that everyone is looking for more talent in this area. It’s a great time to be a revenue marketer and specialized in technologies such as Marketo.

#3 - Closed loop, revenue marketing takes partnership between marketing, sales and IT

This was one of Paul’s summary points but it applied to all of us --- all three of these departments need to contribute to the closed loop engine. IT teams can be a great ally for marketers looking to connect data and systems and ensure they have the real time dashboards and reporting required to enable close loop reporting. In Paul’s case, he also noted that his sales and marketing teams are now seen as a single organization reporting into a Chief Revenue Officer.

#4 - Tracking revenue stages is now broadly adopted

Whereas everyone has different approaches to where data resides, what is tracked and how reporting is performed, and one common denominator between everyone in the room was the underlying fundamental of using revenue stages to track lead progression through their buying process e.g. MQI to MQL to SAL to SQL.

For those who attended (or even if you didn’t), these are some related resources to the topic:

And as there were multiple requests for the slides here is a download of my PPT deck on closed loop reporting:  Closed Loop Reporting Slides

 

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Five Powerful Metrics to support your Closed Loop Marketing in an Inbound Marketing and Lead Nurturing World

The first challenge of closed loop marketing is getting a system and process in place to enable your closed loop reporting. I’ve covered how to do that in multiple posts and most succinctly you can read about that in my CMO Essentials article “Six Essentials to Setting up a Closed Loop Marketing System.”

Once you done that, you’ll encounter a new set of challenges --- how do you navigate through a set of metrics and reports and use the ones that are the most important? Reporting for the sake of reporting helps nobody – the key is identify the right metrics that help you measure against your strategies and indicate if you are headed in the right direction or have issues that need to be addressed.

In a world where inbound marketing and lead nurturing are critical to building a high volume and repeatable demand generation machine, these are five metrics I’ve found to be particularly useful:

#1 - Active Marketing Database

Your active marketing database represents your ‘cookied population’ of MQIs whom you are using nurturing programs to try to advance to MQL. A growing active marketing database is a signal that your top of funnel inbound programs are growing and your nurturing practices are not serving to turn off your audience. Active marketing database grows each month based on adding additional MQIs, and falling out each month are unsubscribes, bouncebacks who have not been matched to a new email address and those who have not engaged with you via a web page visit in over 12 months.

#2 - MQIs by Medium

This measures how each of your mediums are contributing to MQI growth. One of Adam Barker’s best practices is that each team member owns a metric, and these are key metrics to have ownership by team members. The most scalable MQI mediums to grow are Inbound (Website, Blog, Social Media) and Digital (Paid Search, Retargeting, Email). As a side note I am at a point where I don’t even want to consider content syndication leads as MQIs because of the massive quality difference between syndication MQIs and those from inbound & digital channels.  

#3 - % of MQLs that “graduate” from MQIs

This metric give you a single measure of the performance of your MQI-to-MQL nurturing programs… how much are they contributing to your MQL production? A higher number indicates you are driving performance out of your active database, whereas a lower number indicates prospects are identifying themselves to you for the first time as they visit your website for a later stage call to action such as free trial or contact sales – which signifies a missed opportunity to have more influence as they move through their buying process, or cast a wider net. The best in class number for this percentage for mature demand generation organizations is 50%.

#4 - Of MQLs advancing from MQIs, what were the MQI Lead Sources?

Building on the concept from #3, the next question becomes which sources are yielding MQIs that are then after nurturing graduating to MQLs? This should help to identify which sources to spend more time on driving volume to scale your MQL numbers.

#5 - MQL to Opp Conversion Rate by MQL Source & Medium

As you scale MQLs you also need to keep an eye on quality, and a key quality metric is the conversion rate from MQLs to Opportunities.  Monitor these rates to ensure you don’t see any red flags. The most common red flags to watch for are quality issues within paid search particularly the Google content network and that if you are using scoring programs or content triggers to pass leads to sales, that sales team has everything they need to best convert those MQLs to Opportunities.

Answering the question, “How many MQLs do we need?”

A data driven marketing plan needs to start by answering the question, “How many MQLs do we need?”

Although it can be calculated with straightforward arithmetic, ambiguity around some of the details has thwarted many a marketing team, so let’s walk through it.

Here’s the assumptions that you’ll need – for each product line x country or geographic region.

  • Revenue Target – If it’s a high growth business, you could calculate each month with the appropriate # of leading months based on the average sales cycle. Alternatively if you are planning this annually you could take the monthly average over a 12-month plan.
  • Makeup of Business By – Here’s where this can either get complex or stay simple. Marketing and Sales will want to agree where the source of business is expected to come from these sources, or all that apply to your go-to-market strategy:
  • Net New Customers (Inbound / Marketing Programs)
  • Net New Customers (Outbound) …. Worth splitting out for two reasons – conversion rates and deal size will likely vary, and the responsibility for generating the business will likely vary vs. Inbound/Marketing Programs.
  • Existing Customers
  • Cross Sell (e.g. from other product lines)
  • Partner Driven Deals

For each of the above you will want to then have these assumptions:

  • Average order value (based on how the above number split this will then allow you to calculate # of wins you need over the time frame)
  • Win Rate (this will then allow you to calculate # of opportunities you need)
  • MQL-to-Opportunity conversion rate (this will then allow  you to calculate the number of MQLs)

The next step is then taking your MQL target and building a bottoms-up MQL plan.