Supplying the Law of Demand
Demand generation is one of the few things on which most businesspeople enthusiastically agree. We need it and we crave it. Without it, life is pretty miserable, as the last couple of years have vividly demonstrated.
But while the concept of demand generation may be an unalloyed good thing, consensus remains elusive on what demand gen actually is, so the list of tools supposedly suited to the task is extensive. Terms such as leads, actionable leads, and opportunities have meanings that mutate from company to company—and for good reason. Products, needs, and spending authority all differ from deal to deal. Before you can even think about leads and all the rest, you have to answer some fundamental questions about your products and markets.
For instance, in a company with a mature product line, a lead might include (or even be limited to) existing customers in need of upgrades. This is very different from a company with a new category of offering and a green field to sell into. The second company sells to anyone that it can, and does so as quickly as possible, leaving relationship-building, implementation, and service to other parts of the growing enterprise.
So, of course, a lead means very different things to each of these companies. The first company has a history with its customers and a certain level of trust that provides a barrier to entry for potential competitors. The second company has little history; its leads may be nothing more than a name and a phone number.
When we forget to account for these and many other differences, we can get into trouble. Existing customers might welcome the occasional email, newsletter, or social-media greeting from a trusted supplier. The same amount of attention might seem pushy and off-putting to prospects with less history.
The current economic environment has favored installed-base marketing and sales for one simple reason: In a recession, it’s extra-hard to find new spending authority. Some customers might budget for upgrades, but no one’s budgeting for a new-category product. That’s where social media can play a critical role.
We often think of social media as something that can blast out a message, such as a sales offer, to anyone who will listen. That may work at times, but it leaves a lot to be desired and risks damaging the social channel, because customers can vote you off the island.
Even so, there’s a lot of room for inbound social media. Companies that ask customers about their needs and aspirations via communities can gather significant intelligence on customer motivations and craft their messages for maximum impact. Listening to customers is never a bad idea. It’s not as sexy as closing a deal or generating clicks, but it ensures that when you use your outbound tools, you’ll be delivering messages that people want to hear.
The economic downturn caused a lot of demand to evaporate. Smart marketers, however, know how to make the most of limited resources, including customer attention. By staying close to customers and listening more than talking, many corporations are generating demand and revenue where, logically, none ought to exist.
The lessons learned during the recession are important because difficult circumstances might be a sign of things to come—the new normal that some people are predicting. Eventually, even the lucky companies all get to a point where they have large installed bases in markets growing not at the double-digit pace of old but at the single-digit pace of the overall economy. At that point, regardless of whether the economy is up or down, those companies need to focus more on servicing the customer base than on converting new prospects.
Denis Pombriant, founder and managing principal of CRM market research firm and consultancy Beagle Research Group, has been writing about CRM since January 2000, and was the first analyst to specialize in on-demand computing. His 2004 white paper, “The New Garage,” laid out the blueprint for cloud computing. He can be reached via email (email@example.com) or on Twitter (@denispombriant).