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January 21, 2020

What are the Fundamentals of Demand Generation?


It’s a truism that bears repeating: your customers are the lifeblood of your business. Understanding how to generate demand among customers and prospective customers is the difference between a company that’s profitable and one that’s struggling to stay above water.

Every business, from fledgling startups to massive enterprises, needs to know the fundamentals of demand generation to attract and retain customers. In this all-in-one guide, we’ll discuss what you need to know about demand generation. Starting with the definition of demand generation, then discuss the 6 most important demand generation strategies and techniques.

What is Demand Generation?

Demand generation is any business activity that primarily serves to create interest, and demand for, your company’s brand, products, and services.

Examples of demand generation include:

  • Writing blog posts, white papers, and e-books.
  • Posting on social media.
  • Advertising your services through PPC ads, display ads, or video ads.
  • Improving your website’s SEO (search engine optimization).
  • Marketing products through your email newsletter.
  • Running contests and giveaways.
  • Holding webinars, events, and interviews.

The term “demand generation” is often used synonymously with the terms “inbound marketing” and “lead generation,” but the distinction between these three concepts is important. Inbound marketing and lead generation are just two of many possible demand generation tactics, as we’ll discuss in the next section.

6 Fundamentals of Demand Generation

1. Defining metrics and KPIs

Demand generation is without a doubt a worthwhile activity, but “demand” is a nebulous concept at best. How can you say, for example, that one campaign has truly generated more demand than another, without having to rely on your gut feeling?

That’s why it’s crucial to define the best demand generation KPIs (key performance indicators) before you start your next campaign.

The best KPIs for demand generation campaigns are:

  • Cost per acquisition (CPA): This metric measures the average cost that you are paying to acquire one new customer for your business. If you run a $1,000 marketing campaign and you bring in 20 new customers, for example, the CPA of that campaign is $50. CPA is a crucial metric to measure the effectiveness and profitability of your demand generation campaigns.
  • Lifetime value (LTV): This metric predicts the value that customers will have for your business, in terms of the estimated net profit they will bring in throughout their entire relationship with your company. If the lifetime value of your customers is less than the CPA, it’s a good sign that your demand generation campaigns are too expensive or ineffective.
  • Conversion rate: The demand generation funnel is a multi-step model of how your business plans to turn prospects into leads, leads into customers, and customers into loyal clients. The conversion rate metric measures the percent of prospective customers who progress to the next stage at each step of your funnel.

2. Brand awareness

Brand awareness is the extent to which customers can remember, recognize, and identify with your business. Companies like Apple and Starbucks, for example, have excellent brand awareness, embedding themselves into customers’ daily lives and routines.

The ultimate goal of brand awareness is to associate your brand name with certain products, services, and values in the minds of your desired audience.

Brand awareness techniques include:

  • Telling the story behind your company and its founders.
  • Writing case studies about how you helped previous clients.
  • Creating a recognizable look and feel for your products.
  • Making it easy for customers to spread word of mouth about your business.
  • Establishing a strong presence on social media.
  • Donating time and money to charitable causes.
  • Providing excellent customer support experience.

3. Inbound marketing

Inbound marketing is a marketing strategy that seeks to attract customers and prospects to your business by generating relevant and interesting content.

The most common inbound marketing techniques include:

  • Blog posts
  • White papers
  • E-books
  • Social media posts
  • Podcasts
  • Videos
  • Webinars
  • Search engine optimization (SEO)

The inbound marketing content that’s most appealing to your customers will depend on which stage of the buyer’s journey they’re at.

For example, customers who are encountering your business for the first time may appreciate content about solving a general problem or answering a question they have. Customers who are at a more advanced stage, may prefer content that explicitly compares your products and services with your competitors.

Inbound marketing is often contrasted with outbound marketing, which involves traditional advertising campaigns such as TV commercials, newspaper ads, and billboards. Customers and businesses alike have grown to prefer inbound marketing to outbound marketing, for reasons such as:

  • Inbound marketing organically attracts interested customers to your business, while outbound marketing is often untargeted or unwanted.
  • Inbound marketing typically has a higher return on investment (ROI).
  • Inbound marketing content is usually more evergreen than outbound marketing campaigns, which have a limited lifespan. An article you post on your website, for example, may still be attracting interest months or years later.

4. Sales enablement

Sales enablement is any business activity to improve your sales team’s bottom line, helping them become more productive and effective. This means providing your salespeople with the tools, technologies, and resources they need to excel at their jobs by making better pitches and closing deals faster.

The most important sales enablement strategies include:

  • Helping sales professionals connect prospects and customers with the most relevant and engaging content.
  • Establishing a smooth, well-defined hiring, on boarding, and training process for new members of the sales team.
  • Measuring and analyzing customer beliefs and behaviors to find the content with the highest conversion rates.
  • Reviewing your sales pipelines for problems, bottlenecks, and inefficiencies.
  • Automating parts of the sales process with CRM (customer relationship management) software.

5. Lead scoring and nurturing

While lead scoring could be considered part of sales enablement, it’s important enough to deserve its own mention. Lead scoring is a methodology that ranks prospective customers to identify the leads that are most promising for your business.

Lead scoring is a highly complex process, and each sales team has their own formula. Still, some of the common factors involved in lead scoring include:

  • Demographic information (if an individual) or company information (if a business).
  • The level of interest that the prospect has shown in your business (e.g. through website visits, social media engagement, and email clickthrough rates).
  • How recently the lead has expressed interest.
  • Certain actions that the lead has taken (e.g. filling out a contact form or downloading a white paper).

Once the most noteworthy prospects are identified through lead scoring, your salespeople should develop relationships with these leads through a process known as lead nurturing. This may involve holding conversations and providing the right information, “nurturing” leads until they convert into customers.

6. Client marketing and retention

Like married couples who renew their vows every 10 years, the process of demand generation doesn’t end simply because you’ve converted prospects into customers.

According to one study, the cost of acquiring a new customer may be as much as 5 times the cost of retaining an existing customer. What’s more, increasing your customer retention rates by just 5 percent can raise profits by 25 to 95 percent

In other words, generating renewed interest from your existing clients will dramatically improve customer retention rates and increase your company’s profitability.

Demand generation techniques for customer retention include:

  • Informing customers of exclusive sales, and special offers.
  • Creating a membership club or subscription service.
  • Holding webinars or in-person events.
  • Offering discounts for customers who are on the fence about renewing.


Demand generation should be one of your most crucial, sink-or-swim functions. Companies that can generate sustained interest in their products and services are the ones that stand the best chance of success in today’s hyper-competitive business landscape.

Looking to improve your own demand generation activities? We can help. 

About Eniture Technology

Eniture Technology specializes in helping e-Commerce merchants grow by providing useful information, digital marketing services, off-the-shelf apps that solve common problems, and custom programming services. Please contact us if you need help growing your online business or implementing the concepts presented in this blog post.

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