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What Is Demand Generation and Why Does It Matter?

Historically, marketing teams have been challenged to trace the steps and actions customers take before making a purchase. This was an overly complex task because marketing functions and channels were often siloed, making it difficult to evaluate marketing efforts as a whole.

However, as marketing has gone digital, marketers are now implementing demand generation strategies to educate, engage, and delight prospects and customers — and measure the entire process.

But what is demand generation exactly? And why is it considered to be so effective? Here’s a deeper look at demand generation and why it matters for businesses and customers alike.

What is demand generation?

At first, it can be difficult to grasp the concept of demand generation, because it plays a role in nearly every aspect of marketing today. In short, however, demand generation is an all-encompassing methodology for capturing, converting, and retaining demand for your products and services.

Fundamentally, demand generation is a partnership between marketing and sales. It begins before your customers have even expressed an interest in your company and continues through the sales cycle and beyond.

In the early stages of attracting customers, your demand generation programs will encapsulate things like email, social media, and content marketing campaigns. Toward the latter stages of closing a deal, you’ll rely on things such as nurture campaigns, prospect-focused events, and customer marketing.

Through these top-funnel lead generation tactics, marketing focuses on attracting and engaging high-quality leads before passing them onto sales, who works to close new customers and retain existing ones.

Why does demand generation matter?

Having a solid demand generation strategy in place is important because it gives you a defined roadmap for your marketing efforts, which you can share across all teams internally. It helps you avoid one-off tactics and gives you the tools to measure your marketing impact.

According to Demand Gen Report, 71% of B2B marketers surveyed said that their demand generation budget would increase this year, proving that it’s an effective strategy for driving more business.

As a marketer, the advantages of having a demand gen strategy are clear. But how does it benefit your prospects and customers? After all, the sales cycle is largely driven by buyers, with 70% of the buyer’s journey completed before sales enters the conversation.

Here’s how it helps: When you’ve properly executed your demand generation tactics, your prospects are able to access key information about your products and services at their own pace.

Whether they’re doing preliminary research or preparing to make a purchase, they can get the information they need, when they need it. Having this type of control keeps your prospective customers in a more positive mindset throughout the buying process and builds trust with your brand.

From awareness to retention, demand generation is the underlying foundation that informs all tactics used in attracting and maintaining demand for your business. Building connected and cohesive demand generation campaigns will help you attract and close more of your ideal customers.