Digital Demand Transformation: The Path to Strategic Demand Marketing

What is Digital Demand Transformation?

Transforming the demand side of businesses is comparable to decades of transformation that has occurred on the supply side of businesses. Starting in the 1970s, companies began to use computers to optimize manufacturing. Eventually that led to the rise of ERP frameworks and the discipline and science of holistic supply chain management – a technology systems state and a design approach that gives companies critical visibility and the ability to optimize the supply/expense side of their businesses. (Walmart, for example, is a legendary example of being able to optimize every penny out of its supply chain.)

Similarly, Digital Demand Transformation is an emerging discipline that helps bring both science and change management to the challenge of optimizing demand in a business environment. It’s part design thinking (pursuing an ‘outside-in’ architecture for marketing and sales) and it’s part closed-loop systems and connectivity (maintaining 360-degree awareness of buyers’ needs and the ability to orchestrate online and offline engagement to propel the buying process). A Digital Demand Transformation cuts through the thousands of marketing and sales technology solutions available today by providing a lens through which to evaluate and integrate these platforms and plugins into the context of a truly integrated, strategic demand stack.

Digital Demand Transformation means aligning people, process, content, technology and data around the buyer. It’s an approach to help companies maximize the targeting, placement and ROI of demand marketing investments.

OVERCOMING THE TACTICAL DEMAND GENERATION STATUS QUO

Given the inefficiency and lack of predictability that’s often present in marketing and sales activities, business leaders increasingly want to optimize the demand side of the equation. But there are significant, entrenched obstacles to overcome – the most notable being the status quo of tactical demand generation – so most attempts to solve these problems over the past twenty years have consisted of turning to technology as the solution. Companies have simply automated a broken tactical demand generation state instead of improving the underlying process of demand marketing. What’s been missing is a re-think of demand marketing and the accompanying science of holistic demand chain management.

Improving demand marketing requires a fundamental change in our approach — the shift from tactical to Strategic Demand Marketing. (Note: ANNUITAS covers this topic of Strategic Demand Marketing in greater depth in a ‘companion piece’ to this one, “Making the Critical Shift from Tactical Demand Generation to Strategic Demand Marketing”.)

The core of tactical demand generation is a ‘one-and-done’ mindset. It’s focused on inside-out campaigns that push a single product in a single moment of time. It’s a time-limited promotional mindset. This approach unfortunately fails to build a deeper relationship with the buyer over the longer term and, thus, fails to find a repeatable and sustainable model for generating demand and maximizing customer lifetime value.

This is why tactical demand generation is not only inefficient, but also causes organizations to spend more on marketing than they generate in sales lift back to the business. It’s the ‘dirty little secret’ of demand marketing.

The solution is embracing Strategic Demand Marketing — which begins with putting the buyer at the center of our program(s). Doing so enables companies to better engage with buyers in the right place at the right time and, through this positive engagement, to drive greater sales returns from demand marketing investments. It is the key to maximizing lift and to driving higher ROI.

Achieving a Strategic Demand Marketing state is the key objective of Digital Demand Transformation.

FIVE KEY ELEMENTS OF DIGITAL DEMAND TRANSFORMATION

There are five core elements of Digital Demand Transformation that enable companies to fundamentally change how they Engage, Nurture and Convert buyers into customers.

Element 1: Building the Buying Process Foundation

The foundation of Strategic Demand Marketing is the buyer journey. Your strategy must be built upon a deep understanding of the segments you’re targeting, the buyer behavior of the prospects in these segments and their information needs by buying stage.

What pain points are leading these prospects to find solutions? How are they learning about the solutions available? In which engagement channels do they consume content? And how do these insights map to the process of Engaging, Nurturing and Converting?

Buying Process Foundation

With a solid foundation of insights built around the buyer journey, a Demand Process model can be developed to integrate all elements of people, process, content, technology and data around the buying process.

ANNUITAS Demand Process

 

Demand Process starts with mapping Buyer Dialogue Logic – i.e., the end-to-end, holistic conversation between buyer and seller. Buyer Dialogue Logic is operationalized by building Conversation Tracks and Content Marketing Models to address different information needs at different buyer journey stages for different segments. These Conversation Tracks and Content Marketing Models ensure that your strategy continues to be buyer-centric across all engagement channels, both inbound and outbound

A Lead Management Framework is then developed to align and manage lead qualification processes. The lead qualification process should focus less on demographics and firmographics and instead be able to identify sustained buyer engagement and understanding where the buyer is in the buying process. (See more about the Lead Management Framework in the next section.)

A Demand Process model is supported by organizational alignment. Sales and marketing must be able to clearly define their responsibilities in the context of moving prospects through the buying journey – particularly, rationalizing ‘stewardship’ of the buyer.

Finally, the marketing and sales technology stack must underpin and support the Demand Process. Technology architecture should be process rationalized with the concept of driving buyers through a data value chain. This means system integration must build a 360-degree view of the buyer while at the same time provide a basis for orchestrating subsequent buyer interactions. For many organizations, this represents a huge shift from their current state of technology architecture, but it’s critical to achieving strategic demand.

Element 2: Integrating Content Marketing and Lead Management

One of the greatest disconnects in demand marketing is ‘one-way’ communication. Demand marketing programs should build a relationship between the buyer and the seller. Yet too often content is pushed ‘at’ buyers without a feedback loop or next step and lead qualification is conducted without a sense of engagement or ‘intent’ by the buyer.

Addressing this disconnect presents an opportunity to fully integrate interactions with the buyer — pushing these interactions to a two-way, relationship-building state. This is accomplished by integrating Content Marketing and Lead Management.

Content Marketing and Lead Management

 

The starting point is to consider that content consumption and lead qualification are in fact a two-way interaction. The combined content-behavioral and form-response insights garnered from the two should be the basis for determining next step in the interaction with a buyer.

Content Marketing is how a company communicates with buyers – the core of buyer engagement – and interaction with demand marketing content should achieve two objectives. First, it should help to propel the buyer’s education path. Second, identifying patterns of content engagement should inform where a buyer stands in his/her buyer journey – and therefore the ‘next steps’ education path – a critical insight both for lead qualification and for segmentation.

Lead Management is how a company qualifies buyers. Interaction with content should be a cornerstone of buyer qualification. Moreover, a technique called Progressive Profiling should be fully integrated into this ‘dialogue’ – meaning that each time a buyer interacts with a content offer, he or she should also share information via progressive form fill. This builds a more and more complete view of the buyer and his or her state of qualification. The flow should proceed through from initial questions that are designed more to ensure we can Nurture a prospect, and then later questions more designed to get at issues such as budget, authority, needs and timing (BANT).

Content Marketing and Lead Management 2

In this way, Content Marketing and Lead Management should work together to drive not only lead qualification, but also to determine ‘what’s next’ in Nurturing a buyer. The progressive responses and insights into most recent content offer consumed, should have clear indication for what content offer, event invite, etc. is next.

Element 3: Achieving a Perpetual Demand Generation State

Putting buyer journey at the center of Demand Marketing – together with a connective Demand Process and the integration of Content Marketing and Lead Management – is a starting place for transforming from a tactical to Strategic Demand Marketing state. The next step is the ability to orchestrate interactions with the buyer – driving forward the dialogue in an always-on, automated state. Perpetual Demand Generation program structure is the key to this orchestration.

PDG Engine

At the core of Perpetual Demand Generation (PDG) is the concept of Conversation Tracks. A Conversation Track is the best way to tie together and orchestrate multiple marketing and sales touch points across both inbound and outbound channels. It’s the end-to-end story you’re trying to drive with a buyer in a specific segment. This is the core, connective thread that enables teams to make sense of interactions and to drive next-step dialogue, as well as to better qualify that buyer. It also becomes an organizing unit for segmentation – aligning alike pain points and informational needs by buying phase.

From a systems perspective, Perpetual Demand Generation looks very different because it is not about a proactive set of unaltered steps; rather, it is about setting up an environment that is dynamic and interactive — that sees buyer ‘pull’ and then contextually reacts, driving different conversations with different buyers at different stages. In this posture buyers can move forward AND backwards in their process — and the system must be able to keep up. All of this looks very different than the tactical concept of marketing automation that exists within many organizations today.

Element 4: Optimizing Against Outcomes

Business leaders today are very focused on marketing attribution – and for good reason. According to a recent study by ANNUITAS, 72% of business leaders think that CMOs are measuring against the wrong goals. Marketing leaders are racing to try and prove that tactical demand campaigns are contributing to the bottom line. Unfortunately, this type of marketing attribution isn’t about optimizing demand for revenue; it’s about ‘getting credit.’

The goal of Digital Demand Transformation is to achieve a strategic demand state where all interactions are orchestrated around the buyer and are fully tracked. When systems and processes work together, it enables marketing, sales and business leaders to see how all interactions are performing and ultimately how they are jointly driving outcomes. With such a 360-degree view, teams can analyze and optimize against critical paths.

Optimize Against Outcomes

Critical-path analysis means moving away from first-source attribution, last source attribution and campaign objects. In all cases, forcing analysis of buyer journey against a single action, or an arbitrarily packaged action (as in the case of a campaign object) provides a skewed perspective on what is driving results. Instead, it’s critical to track and analyze against every interaction with a buyer – across every content and channel interaction.

One pre-requisite is a data infrastructure that closes the loop on upstream demand marketing actions and downstream sales actions. In this way every touchpoint can be analyzed against outcomes — including driving to a Qualified Lead state, driving to Opportunity pipeline and driving to a Closed Won moment.

Digital Demand Transformation not only requires moving away from single-action attribution concepts, it also means embracing the concept of ‘telemetry’ — i.e., seeing and tracking against movement of a buyer through all content, engagement channels and through lead qualification stages. It is a multi-axis POV, and by tracking all of this telemetry data, we are then able to analyze and pivot it in many directions — optimizing at every level.

Ultimately, demand marketing should be able to optimize not just a single interaction but rather a portfolio of content and engagement channel spending. As the data shows, it’s never just one action that leads to sales; it’s a combination of multiple, critical paths that a buyer takes.

Element 5: Demand Rationalizing the Technology Stack

Oftentimes investments in marketing and sales technologies trigger an appetite for Digital Demand Transformation, and unfortunately, the technology gets treated as the solution when really, it’s only a means to an end. The answer to tactical demand generation challenges is not buying more technology; it’s ensuring that our technology systems support an end-to-end Demand Process. That means “demand rationalizing” our marketing and sales technology stack.

Buyers don’t engage with just one system. Data flows through multiple systems throughout the buyer journey, both online and offline, so why are these systems existing in isolated silos? Every interaction a buyer has should build a more and more complete view of the buyer, but when data is spread across multiple systems that don’t communicate – and don’t have a sense of an integrated Demand Process – that’s impossible. Instead, each system is tracking each interaction individually – meaning that every time a person interacts with a new channel, a new lead or contact is created. When interactions aren’t tied to the correct ‘person’ data, duplication and data cleanliness becomes a nightmare.

One outcome of Digital Demand Transformation should be establishing a buyer data value chain that supports strategic demand marketing. With a buyer data value chain place, all marketing and sales systems work together to combine interaction and qualification insights into a single record that becomes more complete over time.

To achieve this state systems must be integrated and rationalized to work together. That means that a CMS is not simply a way to serve a website, but rather it’s the buyer UX, so all inbound and outbound interactions should flow back through this interface. Similarly, a CRM system shouldn’t be viewed as an action system, but instead as the sales UX so that sales and customer service representatives can orchestrate and log their interactions with buyers. And marketing automation is not a tool for automating emails, but rather correlating buyer actions, qualifying and triggering next steps based on buyer behavior.

DRIVING DIGITAL DEMAND TRANSFORMATION

So, where does an organization begin with Digital Demand Transformation?

Put the buyer in the center

Take a step back before embarking on a Digital Demand Transformation. Look at your company from the buyer’s point of view. What problem is driving the prospect to your website? What solution is the buyer interested in at first? Find the answers to these types of questions and capture the buyer journey. That’s the critical first step – and the critical organizing principle – in building all elements of people, process, content, technology and data around the buyer. Begin with research, analysis, benchmarking and insight reporting, and use this to shape Demand Process and PDG Conversation Tracks. Putting the buyer at the center is the most fundamental step in Digital Demand Transformation.

Build a blueprint through Demand Process and PDG

Your buyer insights should form the foundation for a blueprint to guide your Digital Demand Transformation. The foundational elements of this blueprint should include a model for Demand Process and a Lead Management Framework. Conversation Tracks and Engagement Channels should layer in and then form the basis for Perpetual Demand Generation. These are the components that enable you to build this blueprint.

Take a phased approach

Digital Demand Transformation is no small undertaking. It requires serious amounts of effort and support to accomplish the long-term vision and so it’s crucial to take a phased approach. Move through phases that advance your organization’s demand marketing maturity levels while still improving performance and achieving objectives along the way. It’s important to note that, while phasing is crucial and these phases should build on one another, phases should can’t be so chopped-up that they take you back to a series of tactical programs. If they are not all building towards an outcome, they are not phases in a journey.

Phased Approach to Digital Demand Transformation

 

Tackle change management

Overcoming the status quo with your people is perhaps the hardest part of a Digital Demand Transformation. Marketers have been operating tactically for decades and changing that mindset is not easy. Strategy alone is not enough. It’s critical to align marketing with sales, finance and business management. And to get everyone working off of a new, aligned playbook. Together, all teams can begin to adopt a fundamentally new methodology and drive Strategic Demand Marketing. Agreeing to a new approach is a good first step, but the key is then being to operationalize alignment around this approach.

Find a transformation partner

Most organizations struggle to drive internal transformation on their own. Those that try to implement a Digital Demand Transformation without a partner end up limiting the vision, delaying the timeframe, not achieving results and (ultimately) failing. The way to succeed with a true Digital Demand Transformation is to bring in a partner. Such a partner can both plan and drive the implementation and optimization. Select your partner based on their experience with organizations similar to yours and make sure that they operate on a core methodology, which is necessary to keep everyone on the same page.

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