Making the Critical Shift from Tactical Demand Generation to Strategic Demand Marketing

Demand marketing today is at a crossroads. Historically, marketing teams have been tied to soft outcomes, such as awareness and branding, that are difficult to measure. But now, business leaders expect marketing to prove its value in a more concrete way: by predictably contributing to sales and revenue lift.

It’s a huge opportunity. Marketing teams have a chance to become a beacon of growth and ROI by directing their knowledge and skills towards driving meaningful business outcomes.

Unfortunately, in its current state, demand marketing can’t achieve these goals. Marketers are still holding on to the idea of tactical, activity-based campaigns in an attempt to see rapid results. They’re struggling to measure impact from first-touch to closed-won, and those that can measure impact find that they’re woefully inefficient. According to SiriusDecisions, the typical lead-to-revenue conversion rate ranges from 0.375%-0.6%, depending on the type of market.

When marketing organizations transform their approach – shifting from tactical demand generation to strategic demand marketing – the improvement in bottom-line results is significant. For example, ANNUITAS clients with fully mature demand marketing programs typically see an improvement in lead-to-revenue results that is 4-10x industry benchmarks.

So how do we get from this current state to best-in-class, repeatable and scalable demand? We have to make a fundamental shift in our thinking and transform – from tactical demand generation to strategic demand marketing.

CHALLENGES OF TACTICAL DEMAND GENERATION

Tactical demand generation presents three key challenges that are impossible to overcome without making a shift in our approach.

Challenge 1. Targeting prospects in the right place at the right time

According to a study published by Accenture Interactive, “CMOs … report that of all the individuals they reach with their marketing messages, fewer than 18% are actually in the market for the product or service on offer.”

Restated, 82% of demand marketing is ‘wrong place, wrong time.’

Currently, most demand marketing initiatives are built around broad-stroke, ‘one-and-done,’ outbound messages. Generally referred to as campaigns, these efforts target prospects based on loose, unreliable factors, such as title and company, and they randomly push messages to the buyer. There’s no consideration of where a prospect might be in the buying process (is she ready to buy or just starting her research?) and little to no evidence the target audience actively participates in the chosen engagement channel. In essence, success depends on guessing correctly.

This campaign-style approach doesn’t incorporate real-time buyer journey insights – nor target and trigger against this visibility. Without this element – which is part process, part content design and part systems approach – messages are unlikely to reach individuals in the right place at the right time. It’s just guessing!

The pain of this approach is realized at the end of a campaign when sales receives a list of “prospects”, only to find out that they aren’t in an active buying process at all; rather, they’re just people who showed interest in a single content asset.

When marketers don’t leverage real-time buyer journey insights to understand when and how to engage with a target audience – and fail to leverage process improvements together with marketing technology systems to automate delivery and personalization against these triggers – they waste significant amounts of time and resources. Out of hundreds of prospects in a campaign, only a few may be in an active buying process, so it’s likely that the effort cost more than it was worth in terms of ROI.

Challenge 2. Measuring impact instead of activity

When operating in a tactical state, it’s common to report on activity-based metrics like clicks and page views. But these vanity metrics don’t measure business impact and are nearly impossible to relate to revenue.

Ninety-five percent of sales leaders with a brand-focused CMO think that marketing is focused on the wrong metrics.

Brand Marketers Have Lost Trust

Marketing that focuses on activities instead of outcomes fails to understand or analyze the buyer’s critical path. Instead of identifying and repeating the patterns of content and engagement channels that lead to more wins, tactical demand generation focuses on increasing activity and decreasing costs – neither of which helps improve sales.

In its riskiest form this presents itself as campaign tracking. An artificial combination of activities are typically tied to a campaign, but only the singular campaign is tracked. When that happens, marketing teams operate under a false sense of security. They may think the singular campaign is successful, but they can’t unpack and identify the underlying pieces of the campaign that really drove the results.

In this blind state, there’s no way for business leaders to understand what’s working and what’s not.  Without a total view of all buyer interactions and their correlation(s) to successful outcomes, they cannot isolate specific combinations of marketing and sales elements that had the greatest impact – i.e., they cannot define critical path(s). And without critical path insight, there is no way to repeat success.

Challenge 3. Engaging in a conversation, not just selling a product

A recent Forrester report found that digital buyer experience “exceeds expectations” only 7% of the time. That means that 93% of digital demand marketing efforts are meeting, or coming in below, expectations.

How can that be possible? Because a tactical demand generation approach is built on ‘inside-out’ messaging that benefits the company. It tells buyers about products and services offered, but it never engages them by addressing the real pain points the buyer is experiencing. It fails to meet key information needs at critical buying stages and causes information gaps.

This type of buying experience has serious ramifications. By not leading with buyer needs at each stage of the buying process, tactical demand generation marketers are missing the opportunity to connect with a prospect in any stage other than the final transaction.

The objective of demand marketing should be to build a relationship between buyer and brand through continuous and meaningful dialogue – both online and offline – increasing the likelihood of being ‘engaged’ when a buyer is in the market for a solution.  And when marketers fail to engage this type of continuous dialogue, they not only fail to achieve immediate sales, but they also limit the lifetime value of each potential customer.

MAKING THE SHIFT FROM TACTICAL DEMAND TO STRATEGIC DEMAND

So how do we make the shift from this current state to strategic demand?

The core of tactical demand generation is optimizing a single sale. It can’t find a repeatable, sustainable model to generate demand and so tactical marketing continues to be a cost-center, often with negative ROI. It’s periodic, short-term, outbound oriented, and vendor pushed. When tactical campaigns end, demand ends.

Shifting to strategic demand opens a world of opportunity. Strategic demand is always on, repeatable, buyer-led, and inbound oriented. It engages the buyer continuously and offers a sale only when appropriate, thus increasing the quality of qualified leads to sales and pre-conditioning the buyer dialogue. Strategic demand puts the buyer at the center of everything and increases customer lifetime value in the process.

From Tactical to Strategic Demand Marketing

ANNUITAS has helped dozens of organizations make this shift, and the results speak for themselves. ANNUITAS client PRNewswire, for example, achieved a 22% increase in Qualified Leads as one benefit of their shifting to a strategic demand state.

ELEMENTS OF STRATEGIC DEMAND MARKETING

Step 1.  Building the buying process foundation

The foundation of strategic demand marketing is buyer journey. Your strategy must be built around a deep understanding of the segments you’re targeting, the buyer behavior of the prospects in these segments and the information needs by buyer 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? These are the types of questions that a strategic demand marketer must be able to answer before planning go-to-market activities that engage, nurture and convert buyers.

Buying Process Foundation

Step 2. Implementing Demand Process

With a solid foundation built around buyer journey, strategic demand marketers build a Demand Process model to integrate all elements of people, process, content, technology and data around the buying process.

This starts with understanding and creating a buyer dialogue that presents a complete view of the buyer throughout his or her journey. These dialogues are then operationalized by building Conversation Tracks and Content Marketing Models to address different information needs at different buyer journey stages. These Content Tracks and Content Marketing Models ensure that your strategy continues to be buyer-centric across all engagement channels, both inbound and outbound.

Strategic demand marketers then support the dialogue by adding in a Lead Management Framework to align and manage lead qualification processes. The lead qualification process should focus less on demographics and firmographics and instead prioritize building sustained buyer engagement and understanding where the buyer is in the buying process.

Next, a strategic 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. Finally, the marketing and sales technology stack must underpin and support the Demand Process. The entire organization and tech stack should be process rationalized with organizational stewardship and the concept of driving buyers through a data value chain. It’s a huge shift from the current state of marketing and sales relationships – and of technology architecture – but it’s critical to achieving strategic demand.

ANNUITAS Demand Process

Step 3. Perpetual Demand Generation Program Model

The combination of a foundational buyer journey and a Demand Process model empowers marketing teams to start making the shift from tactical to strategic, but the final piece is orchestrating all programs and systems in a Perpetual Demand Generation (PDG) program.

The core defining element of a Perpetual Demand Generation (PDG) approach is the concept of Conversation Tracks.  Meaning, the best way to tie together and orchestrate multiple marketing and sales touch points across both inbound and outbound channels is to have a sense of the end-to-end ‘story’ we are trying to drive with a buyer.  This is the core, connective thread that enables us to make sense of our interactions and both to drive next-step dialogue, as well as to better qualify that buyer.

A Perpetual Demand Generation program is the sum of all other parts, leveraging aligned systems and Conversation Tracks to create a reactive environment. It sees buyer interactions and contextually reacts in a way that tactical marketing can’t. A strategic demand marketer that implements a PDG program can drive perfectly timed, relevant conversations with prospects across multiple engagement channels, increasing the quality of leads and positively impacting the bottom line.

PDG Engine

GETTING TO STRATEGIC DEMAND

Getting to strategic demand requires a true Digital Demand Transformation. This means a total reset in how we approach the buyer and a total reset in the subsequent processes and programs used to sustain the approach.

The shift doesn’t happen overnight. It requires a holistic approach that overhauls all aspects of people, process, content, technology and data. One of the greatest mistakes companies make is thinking you can piecemeal or ‘tacticalize’ this transformation. The reality is quite the opposite. It requires a complete commitment and an interdisciplinary effort.

From a financial perspective, moving quickly with a larger guiding vision and investment that encompasses several workstreams ensures that broader outcomes are met. In also ensures rapid returns on the investment. In this case, it truly pays to go big.

And from an organizational change perspective, radical and intentional change is always more effective at interrupting the status quo.

The shift from tactical to strategic demand marketing is critical for improving the effectiveness and ROI of demand programs. ANNUITAS clients with fully mature demand marketing programs – i.e., those who have built out an ANNUITAS Demand Process® and have ANNUITAS Perpetual Demand Generation® programs in place – typically improve their lead-to-revenue results 4x to 10x over industry benchmarks. This is the opportunity of making the shift to strategic demand.

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