A demand generation funnel is a template that prospective customers will follow as they go through the different stages of their journey. The purpose of each stage of this funnel is to provide potential buyers with the information and experiences they need to move forward and make a purchase.
A demand generation funnel is a template that prospective customers will follow as they go through the different stages of their journey. The purpose of each stage of this funnel is to provide potential buyers with the information and experiences they need to move forward and make a purchase.
It’s important to adopt the right demand generation strategy to target the right prospective customers, achieve conversion rates for your leads, and generate revenue.
It refers to the different activities you engage in to generate interest in the products and services you offer. It’s a holistic marketing strategy since you’re working with multiple channels for lead gen and focusing on the entire customer lifecycle.
There are different frameworks marketers can use to map the customer journey, such as the sales or map. With demand generation campaigns, you’re focusing on the activities that generate awareness for what you offer and create a need for this product or service.
The terms demand generation and lead generation are different. You might come across content that uses these two concepts interchangeably. However, there are some significant differences to consider when comparing demand generation vs lead generation:
Demand generation and lead generation are two methods that rely on data. However, you’ll need to focus on different metrics to develop demand generation marketing efforts or build a lead generation program.
You’ll need to track metrics tied to content performance. Impressions, clicks, click-through rates, and conversion rates are critical for your demand generation program.
different channels can also give you an idea of how effective your different strategies are.
You’ll also need qualitative data for your demand strategy since customer experience is a critical aspect of this approach. You can, for instance, use surveys to track your customer satisfaction index over time.
Key performance indicators like your cost-per-lead, customer acquisition cost per single paying customer, or your overall customer lifetime value are critical for both approaches.
While the philosophy is different, there are some strategies and metrics you can use for demand generation and lead generation.
A siloed approach can ultimately hurt your marketing efforts, which is why it’s best to combine demand generation and lead generation for a better marketing strategy.
There is no one-size-fits-all in marketing. You need to look at what makes your audience and your business unique to develop a demand generation campaign that makes sense for your sales process.
Like any data-driven marketing program, a demand generation funnel requires a solid foundation with quality data.
Market research is a great place to get started. Skipping this step can result in your marketing or sales team operating on assumptions that turn out to be incorrect or biased.
Conducting market research through interviews, and analytics will help you get to know your audience better. Your sales and customer service representatives should also have some useful insights to share about who your typical customer is. You can also use this information to improve your description of a qualified lead and focus on high-quality leads.
Here are some questions to focus on during the market research stage:
Once you know more about your audience, you can start developing persona A persona is an archetype that represents your audience or one of your audience segments.
Look for patterns and common data points in your market research to identify your main audience segments. The personas you create should reflect the main characteristics, goals, and pain points that the members of an audience segment are likely to share.
Personas are a useful tool because they help you relate to your audience. You can also create a typical buyer’s journey map for each persona since there might be similarities and differences in how prospects consume content and move along the demand generation funnel.
Now is also a good time to calculate your average cost-per-acquisition. You can divide your total marketing spend by the number of new customers you got over a certain period.
Your cost-per-acquisition will give you an idea of how effective your current marketing efforts are. It’s a benchmark you can use to set goals for your demand generation campaigns.
You can refine this important metric by calculating your CPA for the different channels you use. It’s a good way to identify the channels that seem to work best.
Another metric you should calculate is your average customer lifetime value. This number reflects the total value of a customer from the moment of their first purchase to the moment they stop being a customer.
Because retention tends to cost a lot less than acquisition, it’s important to track this metric and implement strategies that will make customers want to remain loyal to your brand.
You can also connect your findings regarding CLV to the insights you were able to obtain from doing market research to figure out which prospects are likely to have a higher CLV or which strategies you can implement during the early awareness stages to boost the overall CLV of a new customer.
Now that you know more about your audience, you can start building a framework that sums up their different activities and experiences throughout the nurturing process.
Structuring your demand funnel into different stages can seem like an oversimplification.
However, it’s a model that helps your sales and marketing team visualize the progression from an early awareness stage to the first purchase.
There are different models you can use for structuring your demand gen funnel:
The average marketing cycle length is an important consideration when mapping out the buyer journey.
While some products are impulse buys and have a short cycle length, other purchases require a much longer sales cycle length because of the complexity of the decision process.
Having your sales team track the length of your typical marketing cycle can give you a better idea of the number of stages prospects go through.
You can also look for strategies to shorten this cycle or use your findings to identify the prospects who are getting near the end of the cycle and haven’t made a purchase yet. You can use re-engagement strategies for these users.
There are a few ways of representing the buyer’s journey map. Here are some models for mapping out lead gen, demand gen, and how you generate interest:
If you decide to develop a demand generation process, a funnel is the best way to represent your sales processes.
You would have the awareness or discovery stage at the top of the funnel. This stage represents the initial contact with your brand. Your main goal is to create awareness for your brand and get prospects to recognize it at this stage.
As the funnel gets narrower, prospects move to an early research or engagement stage. They start consuming content or connecting with your brand on social media or via another lead magnet. Generating interest for your brand, products, or services is important so you can begin educating your audience.
The next stage of the funnel gets even narrower as you focus on educating your audience to generate demand. The prospects who are still in the funnel are now in the research stage.
You can weed out some of the prospects at this stage and focus on sales accepted leads. The focus is on delivering quality content and memorable experiences to deepen their connection to your brand while sharing the information they need to make a purchase decision.
At the bottom of the funnel, you’ll find the sales or decision stage. This last step represents a purchase.
However, the journey doesn’t end there. You need to deliver an outstanding experience during the sale, but you also need to keep engaging the customers acquired to achieve several goals, including repeat sales, higher customer lifetime value, and word-of-mouth marketing.
The funnel framework illustrates how a certain percentage of your audience moves on to the next stage of their journey thanks to your demand generation efforts.
This percentage is your conversion rate. It’s important to track your conversion rate from one stage to the next and implement strategies to improve your sales cycle, including focusing on leads that are more likely to become paying customers, delivering high-quality content, and engaging the right audience through memorable experiences.
Now that you have a detailed map for your demand generation funnel, you can work on identifying the different strategies you can use to get more paying customers through lead gen.
During the early stages of the sales cycle, your focus should be on brand awareness. You need a strong branding strategy so that prospects will remember and recognize your brand.
Your branding strategy can include web design, a unique color scheme, print marketing, and the creation of a voice that is unique and engaging.
Inbound marketing strategies will help you capture web traffic from users who are experiencing a specific pain point. There are many inbound marketing campaigns to explore for your demand gen strategy:
Mapping your demand generation funnel can help you uncover which strategies result in a higher conversion rate from one stage to the next.
There are different strategies you can focus on to boost conversions and get repeat sales:
You should aim for continuous improvement and always look for ways of building a better demand generation funnel.
Collecting data about each channel so you can calculate your close rate per channel will give you a better idea of which channels are the most effective. You can then decide to adjust your marketing budgets for these channels.
You should also calculate your average profit per channel to identify the best demand generators and focus on these channels for your demand gen efforts.
You should set some goals for your demand generation campaign and establish a timeline to track your progress.
If you fail to hit a milestone, think about making some changes to the strategies you use. Having some clear goals will help you determine what success looks like for your campaign.
Keep in mind that change isn’t going to happen overnight. You might need to implement some fundamental changes to your sales and marketing processes to build an effective demand generation funnel.
Be patient since you need to collect data once you have a funnel in place to identify where there is room for improvement.
Using a demand generation funnel as a template for the buyer journey will help you focus on the strategies that generate awareness for your demand while delivering value to your audience. It’s also an approach that will help your marketing and sales teams work closely together to achieve better results.
Here are a few additional things you should know about demand gen.
Why is a demand funnel important?
A demand gen funnel is an important tool because it helps you visualize the different stages your target audience goes through from the moment they become aware of your brand to the moment they make a purchase decision.
It also helps you identify the channels and strategies that help prospects move from one stage to the next during this process.
How to design a demand generation funnel?
You can use a template with three or more stages. Marketers often base their map or funnel on a model with the awareness, consideration, and decision stage but you can adopt a more complex model.
It’s important to conduct market research to get a better idea of what the typical buyer’s journey looks like for your target audience so you can adopt a model that makes sense for your industry and the right target audience.
