One of the biggest challenges for new businesses, particularly startups and other companies operating in crowded markets, is demand generation. Distinctly different from lead generation, Demand Generation in B2B marketing is a much more involved process, which makes it all the more challenging for new brands.
New strategies such as loss leaders have been implemented in many marketing agencies as a great strategy to start demand. Industries like music have unitized these demand generations tactics to transform traditional procedures to innovative marketing methods. In short, here’s what Rihanna and B2B Marketing have in common.Find out what Rihanna and #B2BMarketing have in common: Click To Tweet
What is Demand Generation?
The easiest way to comprehend the concept of Demand Generation is to imagine a funnel. The purpose of this funnel is to filter potential customer leads to generate a core customer base that will generate the most sales.
The demand generation process starts with a production of prospective customers through collection processes like email campaigns, inbound marketing and branding events. Once gathered, the customer pool is poured into the demand generation funnel to be nurtured and groomed.
The funnel’s role is to further qualify prospects through scoring systems at different stages. Generally, the filtration stage process loosely follows this descending order:
- All Contacts
- Qualified Leads
- Semi-Qualified Leads
- Most Qualified Leads
- Demo Prospects
- Follow-Up Opportunities
Customers leaving the bottom of the funnel (BOFU) are transformed into highly qualified leads that can be handed over to the sales team to generate revenue. One distinction that is important when distinguishing demand generation from other traditional processes like lead generation is that it requires a collaboration between sales and marketing teams. The collaboration is necessary to enable a longer nurturing process where customers can be offered material to solve their specific problems.
Demand generation in B2B marketing looks like knowing your audience. Marketo reports 31% of B2B marketers don’t have buyer personas in place:“They don’t know who they’re talking to, so they’re just talking.” Click To Tweet
You better believe Spotify knows who listens to what and when and what their lives look like and sells advertising that aligns to these buyer personas. If you haven’t built out buyer personas yet, get going.
Music’s version of Demand Generation
The demand generation process has been adopted by many startups and innovative companies to operate successfully in oversaturated markets. One specific market that has completely adopted demand marketing strategies is the music industry. Specifically, loss leaders have almost been universally labeled as one of the most important tasks for record labels to use effectively.
Demand generation and loss leader use from a B2B perspective can seem tricky because in many cases, there is no physical product to sell. However, you can focus on things like full-featured free trials and deep discount or product packaging as loss leaders. Like a true loss leader, you may initially see a dip in profits but the customer retention, especially in B2B will make up the loss.
A major dilemma in music marketing is over free content. Over the past 10 years, free stream music through companies like Spotify and Bandcamp have taken over the music market. The free music generation has ripped through the music industry causing marketers to shift their business strategies. One major movement is the implementation of loss leaders.
“A loss leader is a product or service at a price that is not profitable but is sold or offered in order to attract new customers or to sell additional products and services to those customers.”
The philosophy behind this change is that one cannot demand money until one has generated demand. Record labels have adopted loss leaders by convincing artists to post their music for free on Spotify, Youtube, VEVO, etc. The free content platforms create an initial loss in revenue from single and album sales.
How does this impact your business? Simple. The maxim that one cannot demand money until one has generated demand applies as much to B2B as any other product or service for sale. How did anyone know they needed LinkedIn, Wrike or Evernote? They didn’t. These services each have a free component or trial they offer until the company realizes it can’t live without the product in question. That’s how you generate demand. It can be difficult to justify this approach with executives but a first step to tracking success is connecting marketing data with your CRM. Step 2? Optimize that data and start spending accordingly.
- Track anonymous web visits — When adopting a multi-touch model it’s important to track anonymous visits before they become leads. This allows you to attribute revenue credit to the first touchpoint, the point of brand discovery. Discovering your brand is the important first step in the sales cycle, and thus deserves a portion of the credit for the sales.
- Track at the company level — Next you’ll want to track company accounts and not just individual users. This is because in B2B sales there may be multiple stakeholders in the sales process but only one account.
- Use the W-Shaped Model — Lastly, B2B marketers should adopt the W-Shaped attribution model where credit is given to the most important touch points in a B2B sales cycle.
In music, marketers use this opportunity to generate fans and loyal customers that will potentially buy concert tickets on the artist’s tour. One unique example of an artist implementing loss leaders is through the artist Rihanna. The highly anticipated Anti album was released on October 7th, 2015 on TIDAL, a global streaming service that promotes high sound quality. After creating more demand, Anti doubled down on loss leader tactics when it was released to the public again on Spotify.
Why does music’s implementation of demand generation matter? As marketers, it is important to look at the industry’s fluctuating trends to see if demand generation strategies can be effectively implemented. Strategies such as loss leaders can help marketers keep on top of their market and guide them in building their own demand generation.
Just follow the numbers, nearly 88% of the best performing companies have decided to align their marketing and sales teams. Once aligned, these companies go on to produce a 20% sales increase when the demand generation funnel process is used to nurture leads.
Want even more information on creating demand generation in your B2B organization? We love this article by Contently that examines how and where B2B Marketers are missing incredible opportunities.
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