Lead generation and demand generation are two peas in a pod.
To increase the ROI of your lead generation program, you need to know how to optimize the ROI of your demand generation campaigns.
We spoke to 10 demand gen. experts to learn their most recommended strategies to improve the ROI of your demand generation efforts.
What is the difference between lead generation and demand generation?
We’ve often seen B2B marketers use the terms interchangeably. But are they the same?🤔 We asked some experts, what is the difference between lead generation and demand generation?
"Demand generation shouldn't be confused with lead generation,” says Ion Farmakides, Head of Sales at Pearl Lemon. “Demand generation is more of a 360 view of what your prospects should understand about your products. This can be put on your website, blogs, or other places where you put educational materials.”
Padmaja Santhanam, Growth Manager at First Principles, adds that “demand generation is rapidly evolving with the marketing automation & advancement of SaaS products. The in-depth meaning of the term is associated with driving awareness & interest in your product or service to develop a pipeline to boost business growth effectively.”
Content accessibility is often used to differentiate lead generation and demand generation. If prospects can access content freely, that falls under demand generation. But if you choose to gate that content in exchange for emails, it becomes lead generation.
In a nutshell, demand generation focuses on capturing your prospect’s interest by increasing awareness of your brand and educating them about your products.
In contrast, lead generation is a systematic process of turning those prospects into qualified leads and nurturing them into customers.
These two strategies are intertwined and dependent on each other to generate revenue for any organization.
Let's discuss formulas before we get into the meat of the article.
How to calculate the ROI of your demand generation program
Did you know that HubSpot found that 39% of marketers say proving the ROI of their lead and demand generation activities is their top marketing challenge?
Well, of course. It’s tough to advocate for a program when you can’t show its impact on the company’s bottom line.
Sure, core performance metrics can vary from organization to organization. This could be why Farmakides, Pearl Lemon’s Head of Sales, believes “the best way to measure demand generation's ROI is to use a different formula for each tool you'll use.”
Here’s a simple formula by Mike Faherty, CEO of Prosales Connection, to estimate the ROI of any marketing program:
- # of Leads x Lead to Opportunity Rate = X Qualified Opportunities
- X Opportunities x Sales Close Rate (X%) = X New Client
- Average Client Revenue ($X) x # of New Clients (1) = $X in Revenue
- Est. New Client Revenue from Program x Average Gross Profit Margin = Gross Profit
- Gross Profit minus Total Marketing Cost / Total Marketing Cost = % Return on Investment (ROI)
5 things to focus on while measuring demand generation ROI
Here are five things Padmaja considers when measuring the ROI of demand generation:
- Keep the target market front and center
- Focus on multi-touch attribution as this marketing technique helps craft a stream of insightful data that can be useful in making marketing decisions
- Assess every stage of the marketing funnel, micro-conversations & maintain a structured approach to figure out minute details
- Build a credible sales-marketing relationship with proper communication channels to refrain from chaos in the process
- Ensure that sales and marketing team members work in cohesion to achieve the targeted result
10 best practices to optimize the ROI of your demand generation programs
Run personalized nurture campaigns
Nurture campaigns are a demand generation technique to show you understand your prospects’ challenges and how your product is positioned to solve them.
However, you won’t get the best out of these nurture campaigns if they aren’t tailored to your prospects. Personalized nurture campaigns help you guide prospects down the funnel, qualify them as leads and provide relevant information for each stage of their buying journey.
For example, if you serve clients in the health and transportation industry, the email content used to nurture them into customers has to be tailored to their respective industry’s pain-point and buying cycle.
To make this happen, you need to have an in-depth knowledge of your ideal customer and the best channels to interact with them. As GetAccept’s Head of marketing, Tara Pawlak, explains, “Understanding your buyer's journey to what pushed them from "thinking" about something to taking action for more information is crucial.”
Customer research and content marketing also helped United World Telecoms dramatically improve their marketing ROI through personalized content. According to their Head of Global Demand Generation, Luke Genoyer, this strategy helped reduce cost per acquisition by about 50% and sign up higher-value customers. He says, “these activities can help you hone in on your target audience, reach them with relevant content, and win deals with those target customers. ”
To successfully execute a personalized nurture campaign, invest in customer research to know what makes your ideal customers feel understood.
If you are struggling with customer research for your business, here are some tips from Luke Genoyer:
- Talk to your customers; ideally, a mix of your largest, happiest accounts.
- Understand how customers are using your service and what features they're using.
- Talk to brand new customers who recently signed up; find out what almost caused them not to buy.
- Talk to high-potential prospects who did not become customers; find out why.
- Read chat logs, customer emails, sales calls, and more.
- Secret shop your own company from the mindset of an ideal customer, then secret shop your competitors and compare the results.
- Audit your messaging and sales enablement, then make adjustments.
Find warmer paths into your target accounts
Finding warm paths into an account is an overlooked method to improve the ROI of your demand generation campaign.
Warm paths into an account ensure that you are not just another new business but one they have interacted with directly or indirectly. Here are some opportunities for you tofind warmer paths into an account:
- Job changes: One of the most effective sales trigger events is a customer job change. Suppose your contact was a past customer or prospect, even better. These people knew your product and were (hopefully) happy customers. With over 40% of people changing jobs yearly, tracking job changes among your customer accounts and closed-won opportunities mean you can reach them first, gives you an edge over your competitors, and opens up an opportunity to win a new account.
- Open closed lost opportunities: A sales opportunity didn't close for several reasons. Maybe they didn’t have the budget. Or someone might have blocked it. However, those situations can turn around and re-open that opportunity. For instance, a new decision-maker may have been hired, and you can get their buy-in.
- Your influencers and champions: Don’t neglect your champions and influencers within an account. More companies now ensure that they can get employee buy-in before making a buying decision. So, your power users and advocates can influence buying decisions at their company. Keep track of them when they move to new companies; that’s an opportunity for a warm outreach.
Implement content marketing
Chris Zacher, a content marketing strategist at Inter-Growth, says, “Blogging is a great way to show your audience that you and the other people in your company are experts. If you can show people you know what you’re talking about, they are far more likely to want your products because they’ll see that you’re running your business from an informed perspective.”
“After all, that’s what all of us are looking for. We want products and services made by people who care about their industry and value their customers. Publishing informative blogs about topics related to your field is a great way to show your customers that you care,” he continues.
So how do you leverage content marketing to improve the ROI of your demand generation campaign?
- Create product-led content: Don’t just stop at creating content that provides a solution. Show prospects how your product can help them solve their problems. Product-led content helps you qualify leads, acquire new customers, and even retain existing customers. “Your content should help your target audience solve problems related to their business, i.e., problems that you uncovered when talking to your customers,” Luke Genoyer of Global Call Forwarding says. “Content should show exactly how your products/services can solve those problems - screenshots & step-by-step guides are best!”
- Include a clear CTA: Have you ever seen an ad in the wild and didn’t know what to do next because there’s no CTA? It’s frustrating and leads to missed opportunities. Always let your ideal customers know what they need to do next by including a strong call-to-action in your content. “Make sure you have a strong call-to-action in your email,” says Max Benz, founder of Remote-net. “This should include an offer and a deadline so that interested leads know what they need to do to find out more about your product or service.”
- Use video marketing: “Focus on video marketing as users are now more inclined towards video content as it is easy to digest. Videos have become an excellent branding tool & a powerful medium to improve demand generation ROI, ” Padmaja Santhanam of First Principles says. “While making a video, make sure to create the introduction in a way that can hook your audience & it is a good practice to keep the video short & crisp. Video markets attain 66% more qualified leads. Intriguing!
Improve your content distribution efforts
Creating content is one thing; making sure your content is appropriately distributed to reach your ICPs is more critical.
Don’t let your well-crafted content die on your websites. Suppose you’ve created an ebook to serve as a lead generation magnet. In that case, you can share excerpts or infographics from it on social media to pique interest enough to make inquiries or download the ebook in exchange for their contact details.
Blake Smith, a digital marketing consultant, says, “An interesting way I've helped increase demand is to create data visualizations that people find interesting or share-worthy. Interesting data visualizations, such as this data on recruitment cost per hire can communicate a unique data point/problem that your product or service solves. Communicating the problem to the decision-makers in your target audience is imperative in demand generation to get leadership buy-in.”
He continues, “The data visualization (e.g. a chart or graph) is also something other websites may cite or link to, improving your SEO performance. Plus, you get the added benefit of your content being far more engaging and interesting. This is because it conveys more information in a short time, so psychologically, users should stay on your site longer.”
Turn on a targeted remarketing campaign
You’ve gotten customers to your site; what’s next?
Don’t leave it up to chance. The average person sees an ad up to 7 times before they take action. Digital advertising tech has evolved to make it easier for marketers to have more chances to market their target audience through remarketing campaigns.
Such campaigns enable you to show your ads to people who have already visited your site. Plus, you can target them based on the specific pages they viewed on your site and show them ads in line with the content they engaged with or consumed.
Audit your demand generation campaigns
You’ve been putting in a lot of effort, and we applaud you for that.
If you are doing well, you can do better. And if your demand generation efforts are not making you happy, you can do better too.
Tara Pawlak explains: “You need to test new channels fast and furiously and iterate every step of the way based on your customer, not your product or internal feelings.” To do this, you need to audit your demand generation campaigns regularly.
Here are two tactical tips for auditing your campaigns from Amanda Thomas, a demand gen. expert of twenty years and a Managing Partner at Konstruct Digital:
Tip #1: Assess where your demand generation program might be cannibalizing other channels
“For example, where we typically see this occurring is paying for branded Google Search Ads. With branded search, it's extremely likely that your brand is organically ranking at the top of search results pages already. By paying for search ads, you are funneling traffic you would have already gotten via one channel and paying for it to go through another.”
“You can redirect those funds to other high-converting paid search campaigns by removing this element from your paid search ads. You'll still get the branded search conversions through organic search and then acquire more high-intent conversion from paid search (SEM). We've taken this approach across many clients, and the overall impact is a new-benefit improvement in demand gen. ROI.”
Tip #2: Fundamentals matter
“After working with 100s of clients, one of the clearest gaps we see to improving demand generation ROI is lack of data. Understanding your funnel, attribution, and where your best customers come from is key.”
“Use a CRM that integrates with your website & push tracking/UTM parameters to lead records. Don't assume that the funnel is linear either - run tests so that you know what demand generation campaign lifts the overall funnel vs those that attribute to direct sale. The former often has more impact than is realized,” Amanda Thomas concludes.
Increase your service offerings
Michael Alexis, CEO of Team Building, says, “One way we’ve improved ROI on our demand generation is by offering more services. As a team building company, we started with three virtual event types, all of which were positioned as fun. Over time, we created more events that also covered aspects like leadership, community, collaboration, problem solving and training.”
“Having more event types for clients to choose from immediately boosted sales. Now a client that signed up as a lead had more choices to meet their needs. Further, having more options has led to repeat sales which is one of the best ways to increase your customer lifetime value and therefore also your ROI on lead generation.”
Increase demand through events & PR
Events and PR are effective methods to create demand and generate qualified leads.
“A good public relation strategy helps you create the buzz in your target market,” explains Padmaja Santhanam, “and makes you more credible. This creates a sense of trust among your target market.” Because PR targets audiences that are similar to your target market, you reach pre-qualified consumers.
The pandemic led to a rise in virtual events and webinars, and 83% of marketers found webinars effective, yet only 41% of them participated in or attended webinars.
Organizing these events is great, but you are also losing opportunities to market your company and reach new audiences when you don't participate in webinars hosted by other companies that cater to your target audience. “Our founder, Deepak Shukla, does TedX talks that help with demand generation because it promotes the company,” says Farmakides. “The main thing to focus on is to build a case about your brand's authority to demonstrate why you are good at what you do.”
Take advantage of influencer marketing
B2B influencer marketing is an often-ignored demand generation strategy you can use to stay ahead of your competitors. Influencers aren’t only the Biebers, the Kardashians, and Jake Paul. Internal champions within your target accounts are some of the most underrated influencers in B2B marketing.
“Influencers [in your niche] have an impact on their audience & a credible relation with the community they are associated with,” explains Padmaja Santhanam. Her advice, however, is to make sure the efforts you are putting into influencer marketing are scalable.
An easy way to approach this at scale is to track job changes of people who have used your product before.
Qualify your leads
Obvious, right? Don't go yet.
Nadiia Shevelieva, CMO and Head of Sales at Trust, says, “the biggest change you can make is in qualifying your leads and finding a way to quickly make a distinction between a prospect and someone who’s just browsing.”
“When you put systems in place to find out the needs of a potential customer, you’re much more likely to get a good ROI out of demand gen. For example, we qualify our leads based on the size of their company and their software needs and the leads that do get to our sales team are much higher quality compared to when we just accepted a demo call from anyone that asked for it.”
Improve your demand generation campaign's ROI with data
Demand generation is often mistaken to be generalized marketing - a game of numbers. But that mindset results in focusing on quantity ( let’s reach as many people as we can) instead of quality (let’s reach our ideal audience.)
Improving the ROI of your lead generation programs requires a data-driven demand generation campaign strategy. Have a deep understanding of your ideal customers, deploy systems you can measure, ensure your sales and marketing teams align on what a quality lead means to the business. And finally, stay open to experimentation.
UserGems helps companies drive demand generation and boost ROI by combining relationship data with trigger events to surface the most relevant buyers within target accounts. With UserGems, customers get a bigger pipeline and win more often.