Adechina Odjo

How to switch from lead gen to demand gen?

B2B companies are increasingly focusing on demand generation to get more qualified leads rather than tons of low-quality leads usually obtained through lead generation.

As such, demand generation has become an industry buzzword that everyone talks about. Many marketers sing its praises, but very few of them show you how to do it in a way that will increase your revenue.

In this article, that is the myth we are going to debunk. But not only that, we’ll also draw on Cognism’s experience to guide you through the steps you need to take to make a smooth transition from lead generation to demand generation.

Let’s get down to brass tacks.

What is lead generation and how to generate leads?

To better understand the concept of lead generation, it makes sense to first define what a “lead” is.

A lead is a person that shows interest in your products or services in some way. In other words, a prospect or a future client.

That said, lead generation is the process of attracting prospects to your company and reinforcing their interest through nurturing, with the ultimate goal of converting them first into customers and then into ambassadors for your brand.

Applications, blog posts, webinars, ebooks, and free trials, are all ways to generate leads.

Case in point. The heart of the lead gen model for Cognism is creating ebooks. They spend time working on an e-book, then add it to a landing page, and run ads. Once that is done, they now collect the data and move it into their CRM, and pass it on to sales. The sales team will then call the leads, follow up, and book meetings.

That is a typical lead gen approach.

Another basic way of generating leads is to attend tradeshows with scan badges, get the collected data uploaded into your CRM; and again have your sales team follow up on them within 48 hours.

This graph is a perfect illustration of how most B2B companies generate leads.

Now that we shed some light on the concept of generating leads for your business, let’s move on to demand generation.

What is demand generation?

For many marketers out there, demand generation boils down to running ads on ungated content with occasional thought leadership posts, podcasts, and blog posts. While these activities should be added to your demand generation mix, they are by no means the complete demand strategy.

In fact, demand gen is more of an ongoing, long-term activity designed to raise awareness and generate real demand for your product or service. Here are some fundamental objectives of demand generation:

increase the volume of inbound opportunities. Here, it is very important that the companies reaching out to you perfectly match your ICP criteria.
Warm up target accounts to make it easier for salespeople to get in touch. On a normal note, sales teams should only engage with accounts that are already aware of your product.
Shorten the sales cycle and drastically increase your win rate.

Demand generation strategy and its key pillars

B2B demand generation is like a demand waterfall that has 3 pillars.

1. DEMAND ACTIVITIES

To develop a successful demand generation strategy, you first need to define how your customers are searching, learning, and buying.

Next is to identify demand activities that can create awareness and demand on a consistent basis. These include:

podcast interviews with target accounts;
content co-creation with your target accounts;
well-researched and extremely valuable guest posts on blogs, newsletters, and communities where your target accounts have an active presence;
niche-focused events to build awareness and trust.

2. DISTRIBUTION

Unless you are a well-known brand that consistently produces top-notch content that your audience longs for, you need to have a proactive distribution plan. Under no circumstances should you limit your content distribution plan to ads alone.

Here are 3 content distribution tactics you can start using today.

1. Build your own audience that you can connect with directly and easily. No middleman.

Email newsletters, Whatsapp/Telegram channels, slack communities, and social media, are some of the core assets that allow you to connect with your audience directly and not depend on other platforms.

2. Borrowed audience

Find non-competitive companies that also sell to your audience and run co-marketing campaigns. This can be done through:

Educational webinars
Mentions and link exchange
Featuring each other on podcasts, etc.

3. Involve your sales team in your content distribution plan

This tactic works like a charm because your sales team is already in contact with your target accounts. A posteriori, they know them (or at least, they should).

And by taking part in content distribution, your sales teams position themselves as trusted advisors, not as SDRs that no one generally wants to talk to.

3. DEMAND CAPTURING

For complex high ACV products with a long sales cycle, you capture demand at the stage where buyers show a significant engagement and interest in your product, but didn’t make any final decision.

Maybe they’re doing some more research, evaluating your competitors, checking your use cases, or trying to figure out if your product is the right fit for their needs at this particular time.

So, instead of pushing them to book a demo call, set up an engagement threshold and track their engagement across your website and other channels. This will help you identify the accounts that demonstrate high interest in your product.

Here’s a practical example of an engagement threshold:

an account spent 30 minutes on your website reading a case study;
then they checked your pricing page;
afterward, they signed up for a product webinar;
in total, they visited your website 5 times in the last 30 days.

With such an engagement threshold, you can proceed with warming them up and activating them using ABM tactics.

To accelerate demand capturing you need to have a buyer enablement program -content hubs that include buyer-focused content + ongoing nurturing.

Follow this process, and your sales team will never complain about the pipeline and marketing-sourced revenue again.

Now that the difference between lead generation and demand generation is crystal clear, how can you move from lead generation to demand generation?

How to go from lead gen to demand gen?

While demand generation produces commendable results, it is by no means a foolproof strategy that you should start using without thinking. There are boxes to check in order to be confident that it is right for you at this stage of your growth.

In this section, we’ll share some signals that will show you if it’s really time for you to move to a demand-generation approach.

How do you know it is the best time to make the transition from lead gen to demand gen?

You know it’s time to move on to demand gen when you’re starting to generate a lot of leads with your lead gen program but are having a hard time converting them into opportunities and revenue.

Picture this: how would you feel in front of your CFO if you generated thousands of leads but booked few or no meetings? Let alone sales opportunities. Probably because there was never any intent in the first place. Or outright, because you have to wait for six months during which you are nurturing and maturing the lead.

Let’s take a real-life example, the case of Cognism.

For Cognism, the trigger came when they looked at the results they were getting from their lead gen model.

“We were easily generating leads and the bottleneck always came to how those leads would translate into revenue,” said Fran Langham.

Fran went on to add: ‘’Splitting the funnel is what really opened our eyes to why this demand gen approach would be a better way to go. We basically split the funnel and we found that we needed 25 direct inbound demo requests to secure one deal. And for content leads, we call them content leads but it’s leads from events or from a white paper or ebook, we needed 500 of those to generate or close one deal.”

Then they thought and realized that the best way would be to generate more inbound demo requests. For that, they started collecting leads and taking on the shift, testing demand generation. They jumped on board the trend but then it was really when they dug into the numbers that they realized how important it was that they made the shift.

In a nutshell, if you are having a great number of leads but generating very little revenue, it’s a pretty good signal to experiment with demand gen. But how do you do that?

How to shift from lead generation to demand generation?

To move from lead generation to demand generation, there is one important detail that many companies overlook: change management.

Change management involves your executives, marketing, and sales teams aligning on 5 important points.

1. Accept and address existing challenges

These include the following:

People don’t know about your product and aren’t interested in purchasing it. At least not now.
Prospects do not understand the added value of your product or service. In other words, your Unique Value Proposition (UVP) is ambiguous to them.
Your sales teams don’t understand the buyer’s journey and/or the needs of the buyers.

The executive management, the sales, and the marketing teams should all accept these sad realities and objectively create programs to solve the issue on the ground.

2. Set realistic goals

Did your company raise money? Okay, that’s great. But do not let that lead you to set unrealistic goals.

Take note of this, having a bigger budget doesn’t mean generating more revenue. That’s even true when the challenges from the previous steps were not solved and your company lacks proven marketing frameworks.

3. Demand generation campaigns should not be evaluated on leads alone

With demand gen, you’ll have a variety of campaigns whose primary objective is to educate and raise awareness among your target buyers. Not necessarily to generate leads.

As a result, demand generation campaigns should have their own set of key metrics that are closely tied to your company’s revenue.

4. Demand generation operations rather than one-off campaigns

Demand generation is a long-term strategy, not a one-time activity to generate quick revenue. Therefore, you need to have a complete timeline and a comprehensive list of operations and activities to conduct.

5. Time, dedication, and patience are the keys to success

Far too many B2B companies give up too soon simply because they did not generate sales opportunities off the bat. They feel that demand generation is a burden and go back to the lead generation strategies they’ve been applying for years.

Sure, demand gen doesn’t bring in revenue quickly, but it does have a compounding effect in the long run:

reinforcing or building your company’s brand,
focusing on positioning, and
building awareness in your target market.

Now, let’s look at the specific case of Cognism and analyze how they moved from lead generation to demand generation.

How did Cognism switch from lead gen to demand gen?

The switch from lead generation to demand generation at Cognism didn’t happen overnight. The company ran a lead generation and demand generation model in conjunction with each other for 9 months before they made the full switch.

“It is absolutely possible to do both while testing the other. There is no need to suddenly stop doing lead gen.” Fran Langham.

In this section, we’ll show you how they made the switch. But first, let’s dissect the difficulties they encountered during the transition process.

The bottlenecks faced during the shift

Generating leads used to be the comfort blanket of Cognism. Their marketing team was used to delivering hundreds of leads and the sales team was used to seeing those leads coming through the CRM.

But when you switch to a demand gen approach, you don’t get loads of inbound leads overnight. At least not like you used to. It does take time.

So, the main problem they faced was getting the buy-in of the sales team at first. It was not easy to find the right approach to educate them about the change. The lack of patience was obvious and rightly so.

Why?

They were used to receiving a large number of leads which would certainly decrease drastically after the transition.

So, you need to be patient and make sure that you’re really communicating internally. Let them know you’re better off focusing on quality instead of quantity.

Another issue Cognism had to face was getting the senior leadership and the executives to agree on that new approach of shifting from lead gen to demand gen. In all likelihood, they’ll be skeptical of this new idea because they are not used to it.

Here’s how to convince them.

Getting buy-in from the C-suite: how to persuade them that demand gen is the way to go?

Start to open the eyes of your execs to the fact that there are different and quicker ways to close deals and get bigger contracts. Educate them on the shift and on the split funnel. Then ask for a small test budget.

In the case of Cognism, it was 2% of their monthly marketing budget. Then, they started to ungate some of their worst-performing ebooks on LinkedIn. They made them more valuable, more educational, and more interactive like landing pages. They added a navigation menu and obviously, they changed the ad copy and made it more value-driven.

Then they ran the test for 3-4 months. This led to an upwards trend in the inbound demo request. They kept it really simple, analyzing the Salesforce report that shows them the number of inbound demo requests they were getting each week. They monitored the impact and then started to slowly put more budget into the ungated approach. Then they communicated that back to senior leadership.

Don’t get hung up in attributing everything everywhere at all of the different touch points. “We just said: if by making this change, we can see an incremental increase in inbound demo requests, we’ll know we’re doing the right thing. We’re not creating friction in the buyer’s journey. People are able to access our content and get these really value-driven pieces without having to put in their email address.” said Fran.

The more success you get, the more buy-in you will get from senior leadership and gradually invest more and more money into your new approach. It is just like a show-and-tell exercise.

The demand gen team setup: main roles and responsibilities?

There are many different ways you can structure a team. At Cognism, they have:

the head of the DG pod,
2 demand gen managers,
2 demand gen executives, and
2 SEO and content executives that sit on the demand gen team.

One side of the pod focuses on the marketing persona while the other side focuses on the sales persona.

The demand gen manager, the demand gen executive, and the SEO executive should work hand in hand to set the program up for success.

Getting the demand gen strategy off the ground at Cognism

For any demand generation strategy, the main objective is to meet the needs of your target audience where they are and where they like to spend time. Therefore, one of the main pillars of your demand generation strategy should be around subject matter experts. Engage subject matter experts to add value to your audience.

For example, you can host regular live events with them to drive significant engagement. Having a subject matter expert on hand can create valuable content, sales scripts, and tips.

You can also write a blog post every week or two. But do not stop there. Go big on content distribution (on relevant platforms).

If you’re hosting a webinar or a podcast, create snippets, optimize them for channels like LinkedIn, and distribute them as video snippets in your news feed. Do you have newsletters that come out every two weeks? Get subject matter experts involved as well.

This is a snapshot of everything Cognism has done to have a well-oiled machine that brought maximum value to its audience. This is how they got their demand gen strategy off the ground.

But mind you, don’t try to be everywhere at once. Especially if you have a smaller team.

Many people make this mistake by trying to use all channels at first. You need to focus on one particular channel and make sure you are consistently delivering valuable content there. Find out where you’re already performing well and try to do better by serving your audience in the best way possible.

Take a human approach. Think about how you can serve your audience in an educational way first and then in a product-focused way.

Wrap Up

Overall, demand generation is a safe bet for your business if you’re generating loads of leads but aren’t converting as many as you should. And the good news is you can gradually switch from lead gen to demand gen without having to abruptly cancel all your current lead generation campaigns.