0:00:01: Hey, everybody, it’s Jenni from GrowthMode Marketing. You’re listening to Demand Gen Fix, the podcast where our team of GrowthModers and our guests discuss the ins and outs of demand generation and why we believe it’s the key to long term sustainable growth, especially in the HR tech industry.
0:00:20: Hi, it’s Deanna.
0:00:22: Hey, it’s Greg.
0:00:23: So, today we’re going to talk about how you need to create demand in the market to create high growth. I mean, let’s be real. It’s an extremely crowded market in the HR tech space and new companies are sprouting up every day.
0:00:36: Yeah, it can sure be a grind to get traction and grow when the competition is so fierce out there.
0:00:41: Totally, even when you don’t have direct competitors, you’re still competing against other versions of solutions in the market that address the most common pain points for the HR tech buyer.
0:00:52: And that is a big challenge when only a small portion of your total addressable market is in market to actually buy at any time, right? 95% of your market isn’t even ready to buy yet.
0:01:01: It’s like trying to find the needles in a haystack.
0:01:04: So, today we’re talking about the importance of creating demand for your technology to create long term growth.
0:01:10: So, demand generation is about building an engine to create demand and capture it. There’s a difference between demand generation and lead generation. When you think about lead generation, it’s about how do we uncover the leads that are in market today, right? And there’s a portion of that in demand generation; we call it demand capture, but first you got to create demand, and that is how do you create that brand awareness and affinity?
0:01:37: Buyers aren’t going to buy from you if they don’t even know that you exist. Create some fans and people who follow you and want your product; they have to understand what you’re about and what you’re selling.
0:01:48: That seems pretty obvious, right? Hey, if they don’t know you exist, they’re not going to buy from you. Yet. I can’t tell you how often we see when we’re going out in the market and we’re looking at HR technology companies, how many companies out there are not investing and putting a focus in building up that piece of their marketing programs. They’re so focused on how do we bring leads in the door today.
0:02:16: That’s what we call capture demand, which is okay, now they’re considering your brand and they’re making a selection. Yes, we all need leads. We all need them yesterday, right? And that’s the real problem, and just thinking about a conversation that I had this week with the CEO in the tech space. He’s in the CEO network of tech companies, and they’re constantly having conversations about how to move their businesses forward and grow. And I asked him, from your perspective, what are CEOs at SaaS companies;
0:02:50: what do they believe they need when it comes to marketing? And his response was, more leads, more sales. Especially in this economy, we’re seeing that. The challenge with that is, okay, if all your marketing programs are focused on capturing demand to find the leads, that needle in the haystack, to sell to now you’re missing the vast majority of your market, and that’s where it goes back to, but hey, do they know you exist? Have you built that brand awareness, credibility, and trust in the market that ultimately creates that affinity for your brand and the demand? And if the answer is no, that’s part of your long term problem in trying to achieve growth and not being able to get there.
0:03:38 : I think, too, if you’re chasing leads, right? Let’s say there’s this big, wide universe of people that you think could be your leads, but maybe 5% of them are even ready to buy. So, that means 95% of what you did was just a total waste to reach those 5%. If they already knew who you were, then they would be reaching out to you instead of you’re trying to force feed them that: here’s who I am, and here’s what we’re selling, and here’s why we’re great.
0:04:06: And they’re like, well, I don’t even know who you are yet. There’s this old McGraw Hill print ad from the 40s or something like that, and it’s a business person sitting at a desk. It’s all these questions like, well, who are you, and why should I buy from you? Like all the questions like that that a salesperson would have gotten back then, well, people are still asking the same questions. They’re just asking them a different way. They’re asking them on the Internet before they even talk to you; they’re asking all those questions.
0:04:32: So, you have to be in advance of that and be out there telling them, here’s what we are, here’s what we do, here’s why we’re thought leaders, and let them start to follow you, and get to know you. And then when they’re ready to buy, then they walk into the salesman and they’re ready to go. So, it’s like taking that old ad and flipping it on, not quite on its head, but almost on its head.
0:04:51: Well, and it’s really interesting that an ad from the 1940s is still very relevant in its key points. If I don’t know who you are and you come in and you’re like, hey, we think you should buy our $500,000 a year HR technology solution, I bet you have this problem, let’s make a deal. You’re going to get laughed out of that office, right? People don’t just pick up and buy something that they’re not in market to buy. And the reality to your point, Greg, a small portion of your market is evaluating and considering purchasing a product or a solution in your category at any given time. Data and research shows that it’s typically 5% of your total addressable market is actually in market to buy. The other 95% are not.
0:05:37: When the economy is tight like it has been this year, a lot of companies have pulled back on investing in HR technology, unfortunately, which means that 5%, your needle in the haystack, probably just shrunk down to 1% actually in market to buy right now. And so if you’re not looking at marketing from the perspective of how do we create demand for our technology so that people are thinking about us and want to purchase us when they are ready, you’re missing an opportunity because the vast majority of them are not in market today.
0:06:15: And that doesn’t solve your immediate I need leads, I need them now problem, but long term, if you don’t focus on those 95% or greater that aren’t in market today and building that brand awareness, credibility, and trust to build that demand in the market, you’re going to continue to have the same problem of: we need leads, we need them now. We’re behind on our growth targets because of the way buyers buy today.
0:06:43: They’re not just suddenly one day making a decision and picking up the phone and calling a sales rep. I wish it worked that way. It would make our jobs as marketers so much easier, right? But the reality is they’re taking their time to research and to understand, and you want to be the solution that when they don’t have budget, they know who you are, they like you, they trust you, and they’re already thinking, someday I’m going to work with that company.
0:07:11: Those are the best type of prospects. So, how do you create them, right?
0:07:16: If they’re coming to you and they already know some background about you, what you’re trying to sell, and what your unique point of view is, it makes the sales process go that much quicker and easier because they’re already partially convinced that’s what they want to do. Maybe they’ll have three or four or five options in the set, but you got to be in that consideration set or else you’re never going to get the sale.
0:07:36: Absolutely. I mean, when they’re making up to 80% of that purchase decision before they raise their hand to talk to a sales rep, they’ve got their shortlist 99% of the time. And if you’re on the shortlist, you have a one in two, one in three, one in five chance of winning that deal. If you’re not on that short list, the odds of winning that opportunity are pretty small. Personally, I’d rather have the odds in my favor versus stacked against me. Given this reality, the balance of demand creation programs and demand capture programs, when you’re building out your marketing strategy, you really need to look at it as 80% of marketing focus should be programs to create demand. 20% of the marketing programs should be focused on capturing demand, and I don’t think for a lot of organizations that is the mix that they have.
0:08:29: It’s very much skewed towards the demand capture. Problem is, if there’s not actually demand in the market for your product, and I mean specifically your brand, it’s going to be really hard to hit those growth targets that you have and to meet your revenue goals because even if there’s good demand in the market for the product category you’re in, once again, if they don’t know you exist, they’re not going to buy from you.
0:08:58: We were talking with one of our prospects recently and they were like, yeah, we don’t need demand gen right now. Our pipeline for sales is totally full. And then the economy went kind of sideways, and all of a sudden they’re like, yeah, we probably should have done that demand gen thing because all those leads we thought we had are all dried up now, and now we have nothing in the pipeline. So, if they had been doing demand gen when we first started talking about it, then they would have already been up that curve, so they would have had more stuff in their pipeline. Instead, their pipeline dried up because the economy went a little sideways.
0:09:31: So now they’re scrambling, and then what are you going to do? Then they’re going to run around and try to chase leads that aren’t in market. So, it turns into this cycle you have to stop.
0:09:42: Yes, it’s such a vicious cycle, right? We see it all the time when we’re talking to companies out in the market. And you’re right, sometimes we have conversations with people and they understand demand generation and that this is a long term strategy to grow. And sometimes they don’t understand that, and they think we’re crazy when we’re like, it’s going to take time to build this up. And they say, yeah, my sales pipeline is full. I don’t need to focus right there, and we’re like, okay, you’re missing the point.
0:10:12: Congratulations, your sales pipeline is full, but you got to prepare for the unexpected. The unexpected, which really wasn’t unexpected, is the economy is kind of in the crapper right now, and buying has been pulled back in many organizations, which is impacting a lot of HR technology companies and companies beyond this market. There’s no demand there for their product or service and they’re freaking out, and they’re trying to figure out and guess what’s happening for a lot of them, they’re immediately going to that demand capture. All right, we need to bring leads. We need to grow our sales pipeline. We need to get some revenue in the door right now.
0:10:49: Well, great, those companies that are in market right now, unless you had that demand gen engine; you have really good brand awareness; you’ve continued to do marketing and staying in front of these companies over the past six months, twelve months, 18 months. If you haven’t done that, then jumping right into demand capture and trying to uncover those leads is going to be a futile effort. Sadly, that’s the truth, and that’s where a lot of organizations find themselves because when the revenue is down, that’s when the panic sets in.
0:11:24: That’s when companies get off kilter in not focusing 80% of their marketing programs to create demand. They’re focusing more like 95% to 100% in demand capture, or if you want to spin it in another way, lead generation.
0:11:40: For prospects that aren’t currently in the buying cycle, right? What you really need to focus on is the demand generation programs, but you have to show up in relevant places, figure out how to get them to engage with your brand and be a thought leader with your content.
0:11:54: Yeah, and I know you said demand generation. What you just described was, obviously, the demand creation piece of that demand generation program. You want them to buy into your organization’s unique point of view and ultimately build brand awareness, credibility, and trust with them. So, when they are finally in market to buy, they already know that they want your technology. Those are the best kind of leads. I’ve experienced that in our own business here at GrowthMode Marketing where someone says, I don’t have the budget today, but we will work with you someday because we really like your perspective in the market, and how you’re approaching things. That’s what you want to accomplish in building up that brand awareness, credibility, and trust for the prospects that you’re going after.
0:12:39: They say, you understand my problems, you understand where I’m coming from, you get me, but that’s what you want your prospects to think about you. So, when it is time to buy them, they’re like, okay, I know who I’m already going to go to, or at least I know who’s going to be one of the five people on my list.
0:12:54: Exactly, when prospects are not currently in market to make a purchase, I think it’s important as you’re developing out these marketing programs to understand they’re not actively looking for a solution they don’t want to be sold to; they’re not interested in sharing their contact information, so if you’re putting forms on your content, your best content, you may want to take a step back and rethink that, and determine is that the right approach to build demand in the market, or are you doing it for another reason, and you want to make sure you’re giving away that content freely and that it’s really good quality content.
0:13:32: Yeah, no, I was going to say you think about just how you do it yourself, right? Imagine that you’re the prospect, right? We’re all prospects. We are doing some research. You’re thinking about something, you search it up just like everybody searches. We always have Google at our fingertips with our phones, so everything we do, we search. What’s the weather going to be tomorrow? So, you get the information that you’re interested in as you start reading it, and then it’s like, oh, here’s a form to get the information.
0:13:53: How many people fill out a form? I’m just doing research. We all do that personally. Like why do we expect prospects to do anything different?
0:14:01: Exactly, when they hit up on a form, there may be a few that will fill it out. Look at your bounce rates on your landing page to see do you have significantly more bouncing versus filling out the form. If you do, then that’s a problem, right? Because you’re preventing the people you want to read and consume your content from doing that. Even though you’re looking at your content as this is going to help build that credibility, and trust, and that brand awareness, which is important to get them to be interested in working with us in the future.
0:14:33: When a prospect or an individual runs into that, if they’re not in a spot where they’re like, this is worth my time to fill out a form, guess what? Yes, they bounce, they go back to Google, they find a vendor that is giving away the same similar type of information for free, or they just say, I don’t want to know that information bad enough, and that is a huge miss from a marketing standpoint in building that trust with those prospects. They’re going out there looking to consume content that provides best practices, tips, advice, thought provoking ideas, things that can help them in their job.
0:15:08: They’re not in market to buy.
0:15:10: Yeah, absolutely. Like how to guides, and research videos that explain what’s going on in the industry, or with that type of product. They’re looking for information, right? They’re not necessarily looking to buy at that moment, so you want to be able to fulfill that need so that they get to know you and get to understand you.
0:15:28: On the flip side, for prospects that are actually currently in market, okay, yes, now it’s time to focus on demand capture programs, so that 20% in balancing out your marketing programs can be, okay, how do we capture these people who have engaged with us? They’re clearly interested. There’s buying intent there. You want to make their consideration set. You want them to see how your products and services are differentiated.
0:15:55: They’re open to seeing that because they’re in market. Prior to that, I see a lot of organizations, for example, will offer some kind of incentive to do a demo. I just received one the other day to look at an HR payroll software where they were willing to give me, let’s say it was $100, $150, just to attend a demo. I didn’t do it because I don’t want to spend someone else’s marketing dollars., but you know what crossed through my mind?
0:16:27: For half an hour, all I have to do is see their demo and I get $150. When you’re doing those kind of things, it’s not necessarily looking at buying intent, it’s just trying to get eyeballs on your product, right? Yeah, there’s value in getting eyeballs on your product, but that’s a very expensive way to approach marketing, and I think it creates this false sense of we’ve got real opportunities and leads here because they were willing to see a demo. If they’re not in market to buy, they don’t necessarily want to see your products and services at that point, but it’s not going to turn into a sale.
0:17:01: So, for prospects that are currently in market, you want them to see the proof of the value of what you have to offer. It’s the proof for the value of your services that could be case studies, or things like that; testimonials; those types of things to show that it’s really true, although you’re saying it’s true.
0:17:19: Yeah, I mean, ultimately you want them to buy into how you solve their business challenge better than the other options, and if you’re doing your demand creation really well, hopefully they already have a sense of that, but by the time they are ready to make a purchase or ready to start evaluating their options on a more serious level, you want to go deeper with that. The next question that begs then is, okay, how do you know a prospect is currently in market to make purchases?
0:17:49: Well, okay, the number one, they’re actively looking for a solution, right? And they’re interested in learning more about the products and services in the category.
0:17:58: And usually at that point, that’s when they’re willing to fill out a form, right? Because they’ve already gone through all the understanding, and research, and now they want something down more to the nitty gritty. And that’s when they’ll fill out a form or they’ll actually reach out to you directly and not even go to a form.
0:18:14: Right, and so examples of the type of content they’re likely engaging with at the demand capture stage when there actually is buying intent there; we’re talking sales, collateral, product use cases, product reviews, ROI calculators, like you mentioned, Greg, the product demos. All of these things, they’re less likely to be interested in that when they’re not in market, but when they’re actually in market to buy, they need to know these things.
0:18:42: They need to be able to consume that information to know, is this the right HR technology for me or not?
0:18:50: Which do you think would be a better sales prospect, right? The person who asks for a product demo or the person you paid to take the product demo? Like who’s more likely to buy? When you were telling that story, reminded me of when my wife and I went to Cancun way back in the day, and we got caught in one of those vacation ownership, kind of conversations, where you’ll get this free gift if you come in and listen to our story.
0:19:13: So we did. But then we ended up, we didn’t buy because we didn’t have any money to buy at that point. We were newlyweds, but that’s the whole point of what we’re talking about, isn’t it, right? We weren’t ready to buy.
0:19:23: That’s what I was going to say. You got your free massages, so you were happy. They were out a massage appointment or two.
0:19:31: But it’s the same thing, right? It’s like if somebody’s not ready to buy, just getting them into the demo isn’t necessarily going to be a good thing.
0:19:38: Totally, and I think there are things you should think about when it comes to moving prospects from demand creation programs to demand capture programs because the ultimate goal with building out all of these marketing programs, and putting 80% of your efforts into the demand creation is that they will eventually get to the spot where they’re in market to buy, and you can do the demand capture, but I think the reality is, and we kind of already alluded to this earlier in the conversation, you won’t convince someone not currently in market to buy now. If you have a very expensive HR technology solution, even if compared to other solutions out there, it’s not very expensive.
0:20:18: The reality is I’m not in market. We can have all the conversations in the world, but I’m not going to suddenly be like, you’re right, I need it, let’s go. It’s different when you’re looking at Instagram and an ad for $100 pair of shoes pops up. It happens to me all the time. Sadly, I’m not in market for new shoes, but I see something on Instagram and 20 minutes later I’ve bought it. It doesn’t work that way a lot of times in B2B unless you have very low cost, quick transaction type of things.
0:20:52: Yeah, it’s definitely not a major software purchase that goes down that path. You have to keep continuing to plant the seeds, right?
0:20:58: Yeah, you’ve got to meet prospects where they’re at, and I always look at the whole buying cycle. When I say buying cycle, I’m talking about from, they just found out you exist to the day they purchase from you, right? Which can be a really long runway, or not, but first you plant the seeds, creating that brand awareness; that credibility. You’ve got to create that demand in the market for your HR technology solution.
0:21:25: Then you’re casting a net for the consideration phase. Like, how do we capture the people that do have some kind of buying intent? And then it comes to shooting spears. Like, okay, we know that these people have been considering this, how do we really hone in on convincing them that we are the right solution for them?
0:21:48: You started with the buying cycle starts with when they know you, but I think, and I’m sure you agree, but it really doesn’t start then. It starts way before then sometimes because the prospect doesn’t even necessarily even know what solution they need. They know they have a problem and they’re not really sure how to fix it. So that’s when they start searching and exploring. That’s when you first need to start showing up, right?
0:22:11: Like they don’t even know your name yet. I know that’s not what you meant when you said that, but it just made me go back and think about, it really starts way back before they even know what their problem is sometimes.
0:22:22: Yeah, I was just going to say that because I think that’s a really good point, Greg, is sometimes they don’t even know what the problem is, or they haven’t experienced it yet. The whole point around building that brand awareness in, regardless of where they’re at, whether they know they have a problem, or they haven’t realized it’s a problem yet, or they’re going to have it in the future, how do you get in front of them? How do you define that ideal customer profile to start creating some kind of brand awareness and connection with them?
0:22:53: Like I said, regardless of where they’re at in that process, they start to make that connection between: this is the issue, and here’s the solution that we have.
0:23:06: We talk a lot about demand generation, right? But it isn’t a silver bullet, right? I don’t think there’s anything in marketing that’s a silver bullet. Nothing’s going to give you immediate results and demand gen doesn’t either. It’s a long term play, and it takes time to build out up the engine and create the content, and then once it is running, right, you got to keep putting gas in the engine or else it’s not going to work.
0:23:26: You have to always keep doing it and keep doing it well. You’re not going to drive across the country if you don’t put gas in your engine, and if you don’t even have an engine.
0:23:35: Yeah, good analogy. If you do that demand generation engine, like you build it, and you continually fuel it, and rev it up, if it’s done well, it really can be a catalyst for growth, but to your point, Greg, I wish there was a silver bullet in marketing. I think organizations are always looking for that quick win, and what is the one thing, or the four things that we can do that is going to make all the difference?
0:24:01: And I get asked all the time what’s working in marketing right now? What is the one thing we should be doing? I would say the one thing you should be doing is building a demand generation engine. And guess what, that’s not one thing. That’s a whole process and multiple pieces in an omnichannel approach. So, the answer is not as simple as that, but what I often tell prospects when talking to them and they ask that question is, it depends on who your ideal customer profile is. It depends on what category you’re in. It depends how big your market is.
0:24:35: It depends how crowded that market is. So, there is no one size fits all. There is no silver bullet. When someone out there figures out what that is, they’re going to be a gazillionaire. Because all of us marketers have been trying to find that answer since the beginning of time, I think.
0:24:54: We’re all humans at the end of the day, right? So even B2B buyers, it depends on how their brain is working, and what their emotions are, and how they’re searching for things, and then what resonates with them. It’s a big web to try to navigate.
0:25:05: Absolutely, but when you can crack the nut of building a demand generation engine that starts delivering results for you, ultimately you’re going to see shorter sales cycles, higher close rates and lower customer acquisition costs because if you think about the prospects that you go out from a lead generation standpoint, and ask to have a meeting with you, and you try to move them through the funnel, take those compared to the prospect who came to your website, filled out a form, raised their hand and said, let’s have a conversation.
0:25:39: You’re going to see a much different experience, and the goal with demand generation is how do you get more of those hand raisers versus continually chasing after people that may or may not be in market. The key takeaway here is if all your marketing efforts are focused in bringing leads in the door, but you’re not seeing the results that you need to see from a revenue standpoint, it may be time to take a step back because you’re missing a significant opportunity to build future growth.
0:26:10: And when you ignore 95% of your total addressable market that is not currently in market to buy, you’re going to significantly minimize the chance that they’ll choose your technology when they are finally able to make a purchase because quite frankly, someone else in the market was in front of that prospect long before they were thinking about their options.
0:26:33: Thanks for joining us on the Demand Gen Fix, a podcast for HR tech marketers brought to you by GrowthMode Marketing. I sure hope you enjoyed it. Don’t forget to subscribe for more perspectives on demand generation and B2B marketing strategies. Plus, give us a like, tell your friends. We’ll see you next time.
