The myth of B2B demand generation
Dear Marketers, for your own sanity, lets retire the term “demand generation” from our vocabulary. At least, let’s remove it from B2B conversations.
Here’s why. If you’ve worked in B2B space for any amount of time, you know that its really, really hard to unseat an existing vendor without cause. Regardless of what your selling, convincing institutional decision makers that it’s a great time to make a random change to a new service or product supplier is not a great conversation starter. In fact, its such a poor conversation starter that salespeople attempting this generally start by offering a price cut just to get a conversation moving, which makes sales managers want to tear their own hair out.
Here’s the deal. Data easily bears out that institutions don’t regularly wander through the proverbial marketplace, looking for a deal. Institutions do not act or buy like a consumer. Despite this, organizations continue to task marketing with uncovering the magic words or picture that will make an institutional prospect sit up in their desk chair and think, “Ah ha! That’s the service or product I’ve been missing!” That’s the basic concept of demand generation.
Except that isn’t how institutional buying works. Very few institutions are running around with excess budget, absently wondering what new technology or product they can buy to make their company better. Institutional buyers go to market when they have a specific need. Something, either internally or externally, has changed the status quo within their organization, and they now have a need to make a change. It could have been something in their supply chain, their leadership, their customer base, growth in the company, or any number of other trigger events that can drive need. But the key is – they are already thinking about a change. You don’t have to try and “generate demand” – the demand is already there. What you need is to find a motivated buyer.
Finding an institution that is in a buying motion and marketing to it is a much different task than trying to convince a buyer they should enter a buying motion. That is where data and intelligence gathering comes into play. In this day and age, there is more data available than ever to help Marketing and Sales teams find prospects that are either likely to be, or already in, a buying motion. Once you identify those institutions, the Marketing team can go to work convincing buyers that their company’s products or services are the best solution to the need that already exists.
It’s a slight difference – demand generation versus demand identification - but it makes all the difference in how Marketing teams are measured and evaluated. Demand generation is a terrible scorecard for Marketing – it’s a stacked deck. Marketers can rarely bring an institution to market – the best they can hope for is to blast a message far and wide and perhaps come across and organization already in a buying motion. Then marketers hope that lead will get over to Sales, and hope that Sales will pay attention, and that if, but some magical chance, they can trace that attribution all the way through, show that Marketing did indeed contribute to revenue growth.
It’s a losing and frustrating proposition for the entire organization. So, let’s do away with the idea of demand generation in B2B. Let’s get serious about applying intelligence to the ubiquitous prospect data that is available and focus both marketing and sales teams on buyers already preparing to spend money, rather than trying to convince them its time to make a change. Then, dear Marketers, you can spend your time wielding your considerable skills helping to convince buyers that your company is the right choice, which has a much higher return on effort. Doesn’t that sound like a better day in Marketing? All it takes is applying some intelligence to your prospect data – and changing our terminology a bit.