This article describes what demand generation is in a professional services firm, how demand generation happens, gives some brief examples, and makes the case for why it matters.
Over the last 5-6 years, the marketing community has done an impressive job of creating new language. From lead generation to inbound marketing, lead nurturing, lead scoring, TOFU, MOFU, BOFU…every time you turn around there’s a new concept being tossed at you. Sometimes the thinking is new. Other times it’s just new language being wrapped around concepts that are decidedly not new.
In preparing for our upcoming webinar, I’ve realized that demand generation has become one of those jargon-ridden terms. Most of the articles I’ve found have been somewhat complex attempts to distinguish two types of marketing programs — demand generation from lead generation. All of the sudden, creating demand is a marketing tactic? Somewhere at this moment my college economics professor is shuddering. According to the marketing community, the difference between creating demand and generating leads seems to be about the intent of the marketing program (awareness vs. leads), its objective (creating interest in the service or interest in the content) and where a form is placed (before or after the content). Some of this vaguely makes sense to me. But, not all of it jives with how we like to think about the topic. So, I thought it might be helpful to put it in context as a lead-in to the webinar…so you can decide if you want to spend an hour on the topic or not.
What We Mean by Demand Generation
To me, creating demand is about changing or defining the very marketplace conversation on a topic. It’s about building a business that has a healthy flow of high quality opportunities into the foreseeable future. It’s about creating revenue potential for tomorrow. It’s about marketing your firm in a way that enables it to regularly have more opportunity than it does capacity. This gives you greater control over your long-term revenue potential. And, more command over the fees you charge for your services. While a lot of firms are constantly chasing the puck, a few firms are actually defining where the puck is going to go and enticing the entire market to go there. These firms are the demand generators.
While lead generation is about this quarter and this year. Demand generation is about next year and the years after that. For this reason, demand generation is the most critical role of a firm’s marketing function. No other discipline in the firm has as much ability to create future value unfettered by today’s client problems and projects — at least, when given the organizational authority to do so.
A firm likely needs to invest in demand generation whenever it’s looking to:
- Stand up a new practice, service or offering that it hasn’t previously provided.
- Discover new offerings not previously imagined by other firms or clients.
- Create separation between a firm’s core service relative to a competitive peer’s.
- Combine disciplines, services and products together in ways not done so previously to solve complex client problems they weren’t previously able to solve.
- Raise fees (possibly even substantially).
How Demand Generation Happens
Generally speaking, building demand starts at the very essence of strategy. Where does the firm compete? What are its core offerings? And, what is its unique point-of-view on how those things should be done? What is it that most clients get wrong when trying to do what it is the firm is hired to do on their own?
It Often Starts With Research…
The backbone of demand creation is, of course, research. Not research to prove an existing hypothesis. But, more likely, research that’s driven by pure curiosity. Research that’s used to discover that unique point-of-view that governs a practice area or even an entire firm (depending on the size of your business).
How are the most successful companies incorporating IoT into their products? What investments are they making to do so? What do the highest performing sales people doing differently? How do the most successful companies identify and retain their most important talent? How do the leading companies manage through periods of substantial change? How are today’s most forward- thinking communities preparing for an entirely autonomous transit system?
That Leads to New Points of View…
Tightly bound research serves as the basis for new insight. A better way of solving an age old problem. A clearer way to understand and apply a new technology.
New Intellectual Property…
Research serves as the backbone of original intellectual property. White papers that shed new light on a previously fuzzy issue. Books that change the way clients and the market think about a topic. Invitations to speak at well respected events.
And, New Services and Higher Fees
And, it can form the basis of new service offerings or new ways of delivering a service that other firms (and even clients) simply haven’t thought of yet. Often, these new services enable the firm to unlock higher sources of value for clients not previously thought possible. In turn, this often enables higher fees and greater margin.
Examples of Firms Doing It Well
Over the years, consulting firms have made a habit of developing original primary research to uncover new insights on how to solve a problem. Some, recent examples that I’ll be writing more about over the next month:
- Matthew Dixon and Brent Adamson’s research into how the most successful sales people behaved differently during the recession became The Challenger Sale. The book has spawned at least 7 different HBR articles, has fundamentally changed B2B selling the world over, and surely contributed in the sale of CEB to Gartner for $2.6B in early 2017.
- Gino Wickman has leveraged his book Traction to create a blueprint for how small entrepreneurial companies are managed. Along the way he has written 2-3 more books and built a 20+ person training firm that sells resources to over 180+ professional implementers and hundreds of thousands of companies leveraging his methodologies.
Why Firms Should Be Serious About Demand Generation
One of the questions I was asked at our 2017 Profiting From Thought Leadership event was how to get senior leaders to allocate thought leadership resources to future issues in lieu of today’s problems. I think my answer was rather blunt — the very viability of your firm depends on it.
We’re operating in a business cycle with an unprecedented pace of change. Software, automation and AI has the potential to gobble up whole chunks of firms’ traditional service offerings — from accounting and audit work to engineering and finance, software is automating tasks that used to take white collar workers. Firms very existence will depend on them discovering new insights that can spawn new service offerings.
As technology automates tasks this will open the door to all kinds of new service offerings not previously thought possible. The introduction of the electronic spreadsheet 40 years ago didn’t render accountants obsolete. If anything, it actually increased the demand for smart financial professionals. Suddenly a whole world of opportunity opened up around exploring what if scenarios and investment options. What took weeks to analyze before could suddenly be explored in minutes. The task shifted from performing the math to evaluating the potential risk/reward of each potential scenario and choosing the most likely path to success — a whole new vein of services for financial professionals the world over. The same will be true of today’s sweeping technologies. As systems automate more and more tasks, new opportunities will present themselves to firms that are poised to act.
The question facing most firm marketers and leaders today will be how you want to participate in the future. Do you want to continue chasing the puck? Or, do you want to be an active participant in defining where the puck is going to go?