It's generally well understood that the vast majority of our customers are not clamoring to buy whatever it is we're selling.
The "ready to buy" figure is just 5%, according to research by LinkedIn's B2B Institute and the Ehrenberg-Bass Institute. Chances are, the proportion of buyers is even lower right now: Some are saying it's closer to 1%.
But that figure isn't hard and fast: What you're selling makes a difference.
It's reasonable to expect, for example, that a company will stick with an enterprise-focused ERP system for five years before reviewing its supplier. But it's not unusual for clients to stick with an accountancy firm for 10+ years.
A considerably different market is SaaS. A company targeting small business customers might have a 5% monthly churn. But considering that SaaS customers are often not replacing something else in a like-for-like way, in-market buyers may account for an even greater percentage.
Whatever the exact number, the core finding is pretty much unassailable. Marketers, therefore, cannot rely solely on lead-generating activity that targets only in-market audiences, particularly when economies are flailing and leads are scarce. We must also convince the out-of-market majority of the need for our products and services.
Enter demand generation
Demand gen tends to divide opinion. Naysayers will say you simply cannot create demand for a service or product out of thin air. Advocates argue it should be the only thing Marketing focuses on.
As usual, the truth lies somewhere in the middle.
A great way to look at demand generation is that its purpose is to accelerate demand among good-fit customers who are not looking to buy right now.
It is, by no means, the only game in town: Lead capture is still important (though I'd argue this is mainly a job for sales teams) and brand-building is far more fundamental than many B2B marketers give it credit for. But demand generation deserves its place as one of marketing's foundational pillars.
And new data from over 1,000 senior B2B marketers demonstrates there's much room for improvement: In our B2B Effectiveness Engine data, only 57% of respondents said they are very effective at demand gen.
So how do you increase the odds of success?
How you can improve your demand generation performance
The B2B Effectiveness study reveals four ways you can improve the results of your demand generation efforts.
1. Seek true differentiation
Businesses with a truly differentiated position are 31% more likely to be leaders in demand generation. It's a significant force multiplier for effectiveness.
Yet not all differentiation is created equal. The benefits apply only to those who've both tested their positioning with customers or prospects and reviewed it against their competitors. Do just one, and the advantages largely disappear.
Fully 75% of those who have done both say their demand gen efforts are now "very effective."
And truly differentiated businesses are reaping the rewards across almost every other area: They are more likely to be top performers in lead generation and brand-building too, and they achieve greater effectiveness for pretty much every tactic they deploy.
2. Get closer to customers
How well do you really know your customer? The data shows that it pays to focus your research on the broad issues customers face rather than getting befuddled by personas (in B2B, especially, people don't tend to buy because of who they are; they buy because of what they need to get done).
Once we understand our customers' needs and wants, we can talk to them about what really matters and not just what we wished mattered.
More than seven in 10 (71%) of B2B marketers who focus research on broad customer issues rate their demand gen efforts as "very effective."
3. Pick your objectives carefully
Be careful what you set as objectives, as they tend to skew what you end up doing.
For example, those that set "achieving greater market demand" as their primary objective are over 25% more likely to describe their demand generation efforts as "very effective" compared with those that choose to focus on "getting more leads into our pipeline."
Those who focus on boosting market demand are also more likely to select high-performing tactics than those focused on leads—often significantly so.
4. Test your tactical recipe
Finally, the tactics themselves: what do you actually do? B2B marketers use, on average, a mix of around six demand generation tactics.
But what the data reveals is that what's popular and what's effective are often two different things.
For example, the top demand generation tactic across the entire database ranks just 31st (out of 39) in effectiveness. On the flip side, the topmost effective tactic is just 13th on the list of the most popular.
Although specific tactics differ by sector—technology vs. professional services vs. manufacturing—the pattern of lack of correspondence between popularity and effectiveness repeats.
We also find that the optimum mix of tactics varies by deal size. For example, the most effective tactic for deals under $150 thousand ranks 18th for deals more than $1 million.
* * *
Although all those findings make intuitive sense, it's worth noting that there really is no such thing as a one-size-fits all strategy.
Beware agenda-pushing marketing influencers who declare "that's-dead-so-do-this-instead, oh and while you're there buy my course." The reality is far more nuanced and always involves some element of experimentation, of trial and error.
But by focusing on what works in the real world, B2B marketers can make significant strides toward a more effective, more sustainable approach to their marketing. They're also more likely to get a seat at the top table where key decisions are made.
Those who are in the top performers' group of demand generation marketers are 34% more likely to be deeply involved in pricing decisions, for example. But to get there, we must step away from the LinkedIn echo chamber and embrace data to inform our decisions.
More Resources on Effective Demand Generation
The Essential Guide to B2B Demand Generation Marketing
Content + Data: The Pillars of a Successful Demand Gen Strategy
A Powerful Demand Generation Tactic: Lead Magnets and Customer Segmentation, Together
Three Tips for Navigating the New 'Demand Waterfall' Marketing Funnel
