The traditional B2B (business-to-business) buying and selling process has changed radically over the last two years. As business decision-makers, B2B professionals, and buying teams, we require less interaction with company sales representatives and instead now rely more heavily on digital channels and peer networks to identify and research solutions and prospective providers.
To tackle this buying-selling shift, B2B teams are rethinking how they generate demand and customers. The marketing function is playing a larger, more proactive role. One of this movement’s upshots is maturing of the “demand generation” or “demand marketing” function as a central part of revenue and customer creation.
The demand gen function has been within organizations for a decade plus and has now moved from a tactical to an essential business function. In fact, demand gen teams are actively moving from generating sales leads to playing a prominent role in identifying, engaging, and supporting B2B buyers through every stage of their buying journey.
Activate, a leading B2B demand generation provider, just published its sixth annual “State of Demand Gen” research and report. The research was based on 172 respondents of B2B demand-focused marketers working across enterprise, mid-market, and growth businesses. Below are the key takeaways for go-to-market leaders.
Smaller, growth organizations plan to invest more aggressively in demand.
Overall, when it comes to demand generation budgets, there’s an optimistic view, with only 1 in 10 of the survey respondents expecting their budgets to decrease. The narrative shifts, however, when looking at the responses from smaller companies versus large companies: Companies with 5,000 or more employees expect their budgets to stay flat, whereas smaller companies believe their budgets will grow or grow significantly. As organizations navigate uncertainty in the macro-economic environment, savvy demand gen marketers reported that their teams are investing budget in precision-demand strategies and tactics focused on specific accounts and buying groups.
Marketers are focused on pipeline and revenue key performance indicators (KPIs).
Demand generation marketers are feeling successful in meeting or exceeding their KPIs. In fact, more than two-thirds of those surveyed had met or exceeded their KPIs. But what’s being measured — and who’s measuring them well — varies widely. Sales-pipeline-generated topped the metrics; followed by marketing-generated revenue; and then return on investment (ROI) by channel. Looking deeper at the data, however, shows a correlation between measuring marketing-generated revenue and meeting or exceeding KPIs.
The survey also exposes that demand marketers are dedicating more focus on creating demand deeper into the buying journey and across the funnel stages. To support this shift, survey respondents identified “Sales Qualified Lead (SQL)-to-Win” as an important metric. In fact, this metric increased by more than 10 points year over year.
Marketing teams that deploy lead qualification are more likely to hit their KPIs.
Lead qualification teams and processes are a major factor in demand teams’ ability to hit their target goals. The survey also found that a majority of organizations have a business development representative (BDR) team that qualifies and readies leads before marketing-generated leads are sent to sales. Larger companies are more likely to have BDRs than smaller companies, but both groups see real value in utilizing BDRs. The research uncovered that a large majority of BDRs work in the sales organization and closely with their marketing counterparts to qualify leads and identify the most effective demand strategies.
Figuring out the right mix of brand awareness and demand generation continues to be a challenge.
Organizations struggle with balancing demand generation with brand awareness. While marketers recognize the value of brand awareness in driving better long-term results, pressure to fill the pipeline continues to take precedence.
The survey also uncovered conflicting ideas about marketing’s impact on late-stage buyers. More than half surveyed believe that capturing existing, deep-funnel demand is their most important task. At the same time, demand gen pros report there is excessive targeting of in-market and deep-funnel buyers. This conflict underlines that marketing teams are still trying to figure out how to drive demand across all buying stages.
B2B teams are struggling to shift from simply capturing demand to actively creating demand.
Marketers are slowly moving away from just capturing lead volumes to hitting quotas — on websites, through forms, at events, and on social platforms. The research found more organizations are committed to moving beyond simply generating large volumes of top-of-funnel leads (capturing demand) and focusing more of their resources on creating, nurturing, and converting demand, in almost equal measure. Marketing’s full-funnel engagement and nurturing of buyers and accounts through the purchase process approach is clearly gaining traction to better align with today’s more dynamic, buyer-driven purchase process.
Developing an advanced tech “stack” is imperative in today’s digital-first world.
To surface and extract data and to prove the value of their efforts more efficiently, demand marketers cited the importance of having the right mix of integrated tools and technology. From an operational perspective, demand marketers report they are working more closely with both their marketing and business operations colleagues and the financial teams. Demand marketers lean on marketing colleagues, for example, to deploy tools to uncover data insights; deliver tailored buying experiences; and work more efficiently in an increasingly complex and dynamic environment. With macroeconomic uncertainty looming, demand leaders also identify their finance colleagues as invaluable allies in navigating marketing spend and identifying the right KPIs to meet company revenue targets.
Demand generation function is thriving, even with economic uncertainty ahead.
As highlighted in Activate’s sixth annual “State of Demand Gen” research, the demand generation function and discipline continue to improve and evolve. A bumpy road lies ahead, as the “growth-at-all-costs” days are in the rearview mirror and macroeconomic conditions threaten to constrict marketing efforts. Business and demand gen leaders, despite uncertainty, agree the more reasonable growth targets are a positive thing for demand gen function as these teams play a bigger role in revenue and customer generation.
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