The Demand Gen Fix

Lead generation vs. demand generation: What's the difference?

June 08, 2023 GrowthMode Marketing Season 1 Episode 22
The Demand Gen Fix
Lead generation vs. demand generation: What's the difference?
Show Notes Transcript

Lead generation and demand generation. These terms basically mean the same thing, right?

Wrong.

In a recent guest appearance on The Thoughtful Entrepreneur podcast, GrowthMode Marketing’s CEO, Deanna Shimota, sheds light on the crucial differences between these marketing strategies, debunking the misconception that they are interchangeable terms. 

The conversation highlights some of the limitations of relying solely on lead generation, leading with reactive marketing efforts and an endless chase for short-term revenue goals. 

Listen in for tips on how to balance your lead generation efforts with a transition to a demand generation approach to turn your digital footprint into your best sales rep and maximize results. 

 

[00:00] Show intro 

[00:30] Intro 

[01:02] The difference between demand generation vs. lead generation 

[02:53] The problem with lead generation 

[04:58] What could it look like a year into a demand generation program

[07:10] What can you do to ramp up your demand generation engine?

[10:56] How to decide where to focus your content

[14:08] B2B buying behaviors have changed

[17:14] Where can you learn more about demand generation?

[18:02] Closing it out 
[18:32] Outro 

 

The Demand Gen Fix is hosted by Deanna Shimota, CEO of GrowthMode Marketing. Listen to our team of marketing experts and featured guests drop knowledge on how HR tech companies can maximize the success of their marketing for today’s B2B prospects. Learn more at www.growthmodemarketing.com.

(00:01):

Hey everybody, it's Jenni from GrowthMode Marketing. You are listening to The Demand Gen Fix the podcast where our team of GrowthModers and our guests discussed the ins and outs of demand generation and why we believe it's the key to long-term sustainable growth, especially in HR tech industry.

(00:18):

Recently, Deanna was a guest on the Thoughtful Entrepreneur with Josh Elledge. Listen in as they discuss the differences between demand generation and lead generation.

(00:30):

With us right now, Deanna Shimota. Deanna, you are the CEO of GrowthMode Marketing an Inc. 5000 company. You are found on the web at growthmodemarketing.com. Deanna, thank you so much for joining us.

(00:44):

Thanks for having me, Josh.

(00:46):

Alright, what is GrowthMode Marketing?

(00:49):

GrowthMode Marketing is a demand generation agency that helps B2B organizations breakthrough the clutter of crowded markets so that they can crush their revenue goals.

(01:00):

And what is demand generation as opposed to lead generation.

(01:05):

I'm glad you asked because I think a lot of marketers still look at demand generation and lead generation as being interchangeable terms that are the same thing, and they really are not. They're very different strategies. Starting with lead generation. Your marketing programs are only focused on the 5% of companies that are currently in market, which means you're playing the short game, you're not really doing marketing activities that are focused on companies that may not be ready to buy today. And you're asking a prospect for a meeting and you're trying to pull them into your sales process. On the flip side, when you look at demand generation, this is really about building marketing programs that focus on driving value, not just for the 5% that are currently in market, but also for the 95% who are not currently looking to buy. In those cases, your marketing programs are focused on building brand awareness and trust to create demand and ultimately capture it. When you look at demand generation, the real difference from lead generation is that prospects ask you to a meeting instead of where with lead gen you are asking them to a meeting and ultimately the prospects invite you into their buying process instead of you trying to pull them into your sales process.

(02:25):

I absolutely love this, and I have been preaching this for so long because I agree, when we just stay in the lead gen world, you're in the hamster wheel and the minute you stop with your lead gen activity, you are going to feel it in a big, big, big way. So you're beholden to that. I mean, as long as it's profitable, I guess people are saying, what does it matter? What is the long-term problem from your perspective with that strategy?

(02:58):

I think where it's a problem is it's a short-term strategy because you're always working in the, now anybody that's worked on the corporate side, in a B2B organization in the tech space, for example, you know that the minute the numbers are down sales, the executive leadership team, everyone goes into a panic and it becomes very reactive marketing and they'll turn to the marketing team and they'll say, we need leads, we need them now. Help. And so what you're essentially doing is you're constantly chasing your tail trying to get ahead of that revenue number, and that's because you're very focused on the short game and only 5% of the people that are in the market or the companies, I should say. Side note on that, I just read an article that said during tough economic times that 5% actually shrinks down closer to 1%. 

(03:48):

This year it may be much harder because there's not as many companies in market to buy as organizations are pulling back their spend and reevaluating where budgets go. If you focus on the short game, it's a losing proposition. If you want a catalyst for growth, if you're serious about long-term results for your organization and you want to get out of that vicious cycle of chasing your tail, you've got to look at the long-term game. And that's where demand generation comes into play because you're not ignoring that 95%. Or in a year like this year, potentially 99% of companies in your total addressable market that are not in market to buy today. You're building that brand awareness with them now. You're building that trust with them, and quite frankly, you're supporting the way that prospects want to buy because statistics show they don't want to talk to a sales rep. They want to be able to find the information. They want to buy on their timeline, and you can't wait until they're ready to buy because they've probably been following along with another company for a good year or more by the time, they make their decision.

(04:58):

Paint a picture for us about someone who might be saying, okay, I can do this, but it feels like I'm not going to have any short-term gains if I invest in the long term here. But take us a year or two into the future, Deanna, and what is life like if we've really done the work to establish ourselves as a true industry leader? We've served the industry, we've served the communities, we've served potential future audiences. What is life like at that point?

(05:32):

The reality is that demand generation is not an overnight thing where all of sudden results come in. It takes time to build out that engine. It takes time to build out the trust with prospects and to get them to follow along and start to be interested in consuming the content you're putting out there. So, you've got to have patience as you're building it, but if you can have the patience and do it well and continually feed that engine, what you're going to see over time, six months to a year into it, is inbound leads are starting to come in at a more predictable pace. And quite frankly, those inbound leads are significantly better than the majority of leads you're going to uncover when you're doing lead generation. The reason being, they're coming to you asking you for a meeting instead of you asking them for a meeting.

(06:25):

So better leads, shorter sales cycles, higher close rates, overall lower customer acquisition costs. Now I get the concern of, but we need leads now. I think as you're making the transition from a lead generation program to a demand generation program, you can't just throw the lead gen out the window as you're building up the demand gen. I think you've got to look at it realistically and balance out those. And what you'll find is as you start to get results from your demand generation program, you can start to pull back on the lead generation and put more focus on the demand generation because now you've got inbound leads coming in the door.

(07:07):

Which is a great place to be. So Deanna, I would love to now have you talk about it. I think we've established our point. We draw on the line in sand. Demand gen is like if you're a realtor that when asked, you have a few hundred people ask, who's a local realtor that you really like and trust, and if you had over a hundred people that would recommend you and your name would be the first name that they'd bring up. It's game set match. You are set for life as long as you maintain those trusted relationships with those partners, with those centers of influence.

(07:54):

And guess what, today everybody is the center of influence. We all have access to platform and social media.  Your clients and your friends and people who believe in you and your work and your reputation will go out and it will net. Google will reward you for this. If you are seriously being a good steward in the community, you will win. But Deanna, you're the expert. That's just my 2 bits on it. What sorts of things can we be doing to truly ramp up demand gen? 

(08:29):

At GrowthMode Marketing the way that we approach demand generation when a new client comes in the door is we're going to look at three pillars. One is building out the strategy, two is building out the content, which really is a foundation of your demand generation program, and three is the distribution. So how do you get all that content out there in the right places in front of the right people? And to break that down a bit more, if we start with strategy, what we're looking at is we're going to help you create an ideal customer profile. This is going to be best fit company profile. So who are you trying to attract to your company? We want more of companies like this to be clients of ours. Then we're going to help you develop a unique point of view framework, which is really the story that you're going out in the market to really challenge thinking and consistently convey a message to people that helps you break through the clutter, even if your product doesn't have significant differentiation.

(09:30):

Because you've got to find a way to stand out if you have a lot of competition. And then the third part of that strategy is really building out a content marketing and demand generation plan. What kind of content are we going to create? How are we going to get it out in the market? That next pillar, the content marketing that's really looking at what types of content are we going to create? What are the key themes or topics we're going to focus on, and how are we going to build content for each stage of the funnel? The awareness stage, the consideration stage, the decision stage of a funnel to make sure that people can go on a self-guided buying journey. And then that distribution pillar, that's about how do we get that content out there? All of the content is designed to weave in your unique point of view so that you're telling that story over and over and over consistently. And it's all designed and focused specifically for your ideal customer profile. Because the intent is, I'm putting this content out in the world to attract the best fit companies for my organization. And so that distribution strategy becomes where are those ideal customer profile companies hanging out? Where are they getting their information? And ultimately, how do I turn my digital footprint into my best sales rep? 

(10:55):

Deanna, how might this content look? Is it just written blog content or is it custom for each person? How do we decide where to focus our effort on the content side of things?

(11:07):

We like to look at what we call three rings of content and the content, the forms it takes. You’ve got to really turn it into all different kinds of formats because people consume content differently. Some people love listening to podcasts. I've had other people tell me, I do not want to listen to something for 20 minutes, I'd rather watch a video, I'd rather read a white paper. I'd rather consume social media posts, you know, different strokes for different folks. But when we look at what you're doing with that content and how you get it out there, first you've got to look at your website. Are your prospects that visit able to go deep and find a lot of information because this is your digital storefront. So it's got to be really good. That second ring is managed channels.

(11:55):

So we're looking at the things where you can control what you put out there and the schedule that you put it out there in. And you may not own that channel, but you own a piece of that channel. So we're talking social media posts, podcast distribution, webinars, all that kind of content. And then that third ring, which I think a lot of companies overlook, that's how do you tap into third party audiences that are relevant to you? You're working on building up your own community, but you're also tapping into other audiences within the industry that are very relevant that your ideal customer profile is hanging out in. And when you combine all three of those together, you start to really build upon that digital footprint so that you are easy to find, people are hearing your name, you're building that brand awareness, and they're finding content all over the place that has your name on it. So they start to build trust too.

(12:53):

Yeah. I am really digging your content. Thank you. I've heard of demand gen before and we've just been referring to it as, just leading with generosity, just being a good steward in your community. And again, that might feel inefficient at first, but then you get to a point where you surpass the lead gen-ers out there and they're still stuck in the hamster wheel. And meanwhile, the best customers and the best clients out there are coming to you because they clearly see you as the market leader. While the rest are, I don't want to say amateur because you have to do some lead gen I think at the beginning. But again, it just feels different.

(13:42):

It's just a different energy. This is a moment where we can be a little introspective of who we are in the market and who we want to be. Do we want to be the forever lead gen company, or do we want to be the company where everybody respects and loves us and sends business to us? This is really important too, Deanna, we think about consumer behavior today and everyone's a consumer, right? And so we think about the behavior of consumer staying. This gets into my 15 years as a studying consumer behavior as a consumer expert and consumer advocate. Consumers have never been savvier. They are going to do their due diligence. They can add two and two together and they can very quickly figure out who's constantly having to hit the DMs and the spam and cold calling and who doesn't need to do that sort of stuff. They can rise above it all.

(14:36):

There's actually statistics that Gartner has put out that I love because it really paints a picture for how important demand generation is and really just the whole building your digital footprint out as we're moving forward. They've said that the reality is that B2B buyers have completed 80% of their purchase decision process before they're ever willing to pick up the phone and talk to a sales rep. 72% of B2B buyers would prefer to have zero interactions with a sales rep during the purchase process. It takes an average of 66 touches before a buyer engages with a sales rep. So, people are not buying the way they used to.  They're finding all the information online, and if they can't find it on your company website and with your unique point of view, they're going to find it with another company that's ahead of the curve.

(15:31):

What is it like working with GrowthMode?

(15:34):

We love working with organizations that have growth initiatives. So, a lot of times they're going to be private equity backed, they've got a lot of pressure coming in on their shoulders to achieve high growth. And they're coming to us and saying, okay, how do we build that foundation for that long-term growth engine? And our team will come in, hold our clients' hands and really help them through the process. We also are going to push back because we see this all the time what I call random acts of marketing. And what that is, they say, let's do demand generation, and then when we have our weekly meetings, they're like, oh, can we do a press release on this new hire, and can we do a social media post because we're going to this trade show? Oh, you know what, it'd be really nice to have this case study.

(16:22):

They're asking all these ad hoc requests. And if we were to start doing all of that for them, we totally lose sight of the mission and the focus. We developed this ideal customer profile for you. We helped you frame up your unique point of view. We're trying to tell your story and this random marketing is working against you. So, we're not afraid to push back on our clients and say, nope, that doesn't make the priority list. Remember, we've got to focus because when you're in high growth mode, everybody in that organization is running 500 miles per hour and an idea pops up, they throw it up, you know, the next shiny object, but it's not really where they're focused. And so, we're the ones that have to keep an eye on the ball for them when it comes to marketing programs and really push back if they're going off course.

(17:14):

Someone that's listening to this podcast right now is experiencing Demand Gen in real time. When somebody then takes the next step and they go to growthmodemarketing.com, what would you recommend that they do? 

(17:29):

If someone's interested in learning more about Demand Generation, how to build your engine out and the value it can bring to you, I'd recommend that you actually check out our podcast called The Demand Gen Fix, which you can find on our website, on Apple Podcasts, Spotify, YouTube, or basically anywhere that you're going to find podcasts to listen to. Also, you can follow me, Deanna Shimota on LinkedIn. I post a lot of thoughts and insights on a regular basis about demand generation. And then of course our website. We try to put a lot of information out there as well.

(18:02):

I am subscribing right now. Again this has been a great, great, great conversation. The Demand Gen Fix the podcast, the website is growthmodemarketing.com. Deanna Shimota, you're the CEO. Thank you so much for this conversation. It's been a joy. 

(18:20):

Thank you. Yes, same.

(18:23):

Thanks for joining us on The Demand Gen Fix, a podcast for HR tech marketers brought to you by GrowthMode Marketing. We sure hope you enjoyed it. Don't forget to subscribe from more perspectives on demand generation and B2B marketing strategies. Plus give us a like, tell your friends, we'll see you next time.