Show notes
As B2B SaaS sales become more challenging, demand gen can be an important way for companies to attract, educate, encourage, and nurture prospects.
In this episode of Marketing Spark, Chris Roche talks about the benefits of demand gen and how companies can get started or ramp up their efforts.
We also talk about how B2B SaaS brands can leverage LinkedIn and experiment with TikTok.
From the conversation
How demand gen differs from outbound lead gen
Mark Evans describes demand gen as leads coming to a company after they find and engage with its content and campaigns. He describes outbound as sales reaching out to start conversations. Christopher Roche, CEO of Catalyst Consulting, a revenue and pipeline growth focused marketing agency, agrees and adds one point. Outbound is sales, and demand gen belongs to marketing.
Christopher says much of what B2B companies call lead gen is really a subsection of sales. Marketers concentrate on creating leads and opportunities that enter the MQL hamster wheel and get passed to the sales team. He sees demand generation as a way to build a strong inbound approach that makes the sales team's life easier.
Why a downturn favors investing in demand gen
Christopher expects the current slowdown to shape marketing teams over the next twelve to eighteen months. His agency specializes in demand generation and demand capture channels, and he has already seen some CPMs drop by 30%. Marketing is the first budget many companies cut, so there is less competition. Catalyst is increasing client budgets as a result.
His thinking comes from March 2020. The company he worked for then increased its marketing spend, went fully remote and invested in social channels. It became the company's most explosive year for growth, and revenue reached levels it had not expected to hit for two or three years.
He also points out that only 2 to 3% of a market is in buying mode at any given time, and that share may fall below 1%. Instead of competing for that small group, he suggests educating the rest. Brand and solution awareness will then be in place when buying cycles open again.
"But you have to understand that there is only a very small percent of your market who's ever going to be in buying mode."
Measuring demand gen and getting leadership buy-in
Mark asks whether companies learned from 2020. Christopher says a company and its head of marketing are different things, and larger organizations with oversized sales teams and heavy overhead are slow to change. A head of marketing may want to switch but still needs to explain it to the CEO or board and justify it with historical metrics. He says demand gen works well at lowering customer acquisition cost for B2B companies with ACVs of $10,000 or more.
His advice is to review the past twelve months of data and break down the true customer acquisition cost across events, conventions and Google Ads. That gives a baseline to measure against. The shift does not have to be total. A company can move small percentages of budget, for example away from over-invested Google Ads, to test demand generation.
Early metrics include consumption, hand raises and whether the ICP is engaging with content on LinkedIn. Christopher also suggests asking SDRs and account executives to find out how inbound leads heard about the company. Within three months, a company should see more organic and direct traffic and people citing its videos. Lower acquisition cost and shorter sales cycles follow.
"You have to view marketing with a long-term lens. You have to view success metrics over a twelve to eighteen-month window and period."
Getting started with audience size, frequency and content
Christopher's first step is sizing the audience for the next twelve months. He starts from the ICP and advises against inflating it. Once the demographics are set, he enters them into LinkedIn to see the audience size. He assumes roughly 40% of that audience is active enough to reach, so 100,000 people on LinkedIn means about 40,000 can be targeted consistently.
He recommends reaching that audience three to five times per month with different types of content, then checking the budget against it. A 5,000,000 person audience with a $20,000 monthly budget is too broad, and the ICP needs to be more specific. A much larger budget than the frequency requires means the audience can grow or other channels can be added.
On LinkedIn, Catalyst focuses on carousels, videos and case studies that can be consumed inside the news feed. Christopher says this costs less per impression and reaches more of the intended audience than sending people to a landing page. New content goes in every four to six weeks. Most clients already have the raw material to begin with.
"The good news is that most of the companies that I see have this content already. It's just not formatted or it's not in a way that's readily consumed."
LinkedIn, TikTok and self-reported attribution
Christopher says organic reach on LinkedIn has fallen over the past twelve months, and a video reaching 10,000 views is rare without a large following. Even so, about 90% of his business comes from LinkedIn, and he spends an hour a day on it. For the first three months no client mentioned LinkedIn, and he calls it a nine-month investment before tangible return. He also posts short videos on TikTok two or three times a day and repurposes them on LinkedIn. He suggests clients test TikTok for six months.
On attribution, he explains that dark social, such as a video texted to a friend, cannot be tracked. He mentions lurkers who never like a post but later send a direct message. His fix is self-reported attribution, which he uses with all of his clients. It is a free-text field asking how the person heard about the company, and the answers are manually credited to channels such as podcasts, LinkedIn or TikTok.
He expects the rest of 2022 to be extremely rocky, with layoffs and budget uncertainty. He also sees opportunity, because competition and the barrier to entry are lower for companies that test demand generation now.
"Don't have a drop-down. Don't have the ability to pick anything or multiple choice or anything like that because people are lazy and they just pick the first one."