For many startup founders, understanding how to effectively generate demand is crucial. This blog post will walk you through the essentials of demand generation, with practical tips on how to apply these strategies to grow your startup.
Demand generation is a go-to-market strategy that creates a strong desire in your ideal customers to purchase your product or service. It's about more than just generating leads; it's about building a relationship with potential customers, making them aware of a problem, and showing them that your company is the best solution.
Demand generation is composed of two main parts: demand creation and demand capture.
Demand Capture: This focuses on the small percentage of the market (about 3-5%) who are ready to buy right now. It’s about efficiently capturing existing demand by targeting those who are actively searching for a solution.
Demand Creation: This targets the remaining 95% of the market who are not yet ready to buy. These are potential customers who may be unaware of their problem or don’t know that your product exists. The goal here is to build a relationship with these potential customers, educate them, and nurture them until they are ready to buy.
The challenge with focusing only on demand capture is that all your competitors are vying for the same small piece of the pie. As a startup scales, this strategy becomes less effective, making demand creation equally, if not more, important.
Lead generation often focuses on capturing contact details, typically through offers like eBooks or webinars. While this can be effective, it becomes problematic when the focus shifts to quantity over quality. Many businesses fall into the trap of collecting leads that are not ready to buy, resulting in low conversion rates and frustrated sales teams.
Demand generation, on the other hand, is about nurturing relationships and guiding potential customers through their buying journey. It’s not just about getting their contact information; it’s about building trust and establishing your brand as a trusted solution provider.
Content plays a central role in demand generation. To effectively generate demand, you need to deeply understand your target customers and their buying journey. Content is how you communicate with them, educate them, and guide them through the process.
To do this effectively, your content should be mapped to the five stages of awareness:
Each piece of content you create should be targeted at moving the customer from one stage of awareness to the next. For example, when a customer is unaware, a short, impactful piece of content that highlights a potential risk (like a story about a company similar to theirs experiencing a major issue) can move them to the problem-aware stage. As they progress through the stages, your content can become more detailed and specific, such as case studies or product comparisons.
One of the reasons customers might not buy from you, even if they are aware of your product, is a lack of trust. They may prefer to stick with an incumbent provider or a brand they’ve heard of before. Building trust is crucial, and it can be done in several ways:
At ShoutEx, we use a simple P-process to build our demand generation strategies. This P-process has 4 main stages that go through the following:
Prep Work: This involves deeply understanding your customers, running analyses to identify your best customers, and mapping out their buying journey. It’s about preparation—knowing who your customers are, what they need, and how you can best serve them.
Provide Value: Once you understand your customers, the next step is to create content that helps them. This content should guide them through their buying journey and build trust. It’s about being a resource for your potential customers, making their lives better even before they buy from you.
Promote: Now that you have helpful content, you need to get it in front of your target audience. This involves choosing the right distribution channels, whether it’s social media, email marketing, or events. It’s also about identifying which potential customers are most likely to be in-market and targeting them with personalized outreach.
Perfect: The final stage focuses on optimizing your efforts to perfection. It includes tactics like A/B testing, advanced tracking, and using data to refine your approach. It’s about continuous improvement, ensuring that your demand generation strategies are as effective as possible.
AI is increasingly being used in demand generation, especially for tasks like content repurposing and personalization. While AI can help speed up processes and make content creation more efficient, it’s important to ensure that the insights and initial content are created by real people. AI can act as a tool to enhance and distribute content, but it should not replace the human touch, especially in areas like customer research and relationship-building.
Demand generation is about more than just getting leads. It’s about building relationships, educating your audience, and guiding them through their buying journey. By following the demand-gen process and leveraging tools like AI effectively, you can create a sustainable demand generation strategy that will help your startup grow.