In today’s competitive marketplace, one of the biggest challenges that brands face is to generate demand for their products and services. Software startups or new SaaS companies are no different.
That’s why many brands consider investing in demand generation.
Before COVID-19, 60% of marketers expected growth in their demand gen budget in the next 12 months. And you’ll be surprised to know that despite the crisis, 78% of marketers said their demand generation budgets will grow or stay the same.
In fact, demand gen budgets are now stronger than the overall marketing budgets for many brands.
But the question is:
Why are brands and marketers considering to increase their demand gen budgets?
Should you invest in demand generation as well? And why?
I’m going to answer these questions and more in this article but before that, let’s discuss what demand generation is.
What Is Demand Generation?
Demand generation broadly refers to using a host of marketing strategies to make your product stand out in front of prospects. It involves analyzing and leveraging data to nurture and convert potential customers into buyers.
Unlike lead generation, demand gen is not a short-term marketing tactic to boost sales. It focuses on building long-term relationships with prospects and existing customers to keep them coming back to your brand for more purchases.
Demand generation is an umbrella term that covers all your marketing and sales initiatives all through the buyer’s journey – from the initial consumer interest generation to upselling products/services.
Here’s a graphic by Drift that clearly defines how demand gen contributes to ongoing lead nurturing and sales in the long term:
Image via Drift
3 Reasons Why Your Software Startup Should Create a Demand Generation Funnel
As a software startup or a SaaS business, you need to reach out to B2B decision-makers and convince them to use your software. B2B demand generation can be more challenging than attracting and engaging the consumers of a beauty brand.
In such a scenario, the best way to grow your software business is to invest in demand generation.
But how can demand generation help you?
Creating a robust demand generation funnel can help you:
1. Build Awareness About Your Software Among Your Target Audience
Investing in demand generation allows you to build awareness about your product and services.
As a software startup, you can let your target buyers know:
- What is your software all about?
- What are the main features of your software solution?
- How can it help them improve efficiency?
- How can it make their life easier?
- How have other brands benefited from using your software?
- Why should they invest in your software solution?
You can increase brand recognition, build trust, and position your software as the go-to product within your target market using a demand gen strategy.
2. Capture Existing In-Market Demand to Drive More Conversions
You can engage people who are already looking for products similar to yours.
You can use social ads and PPC campaigns to get your software solution in front of the right people. Your demand gen marketing initiatives should touch as many channels and mediums as possible to capture existing in-market demand.
This can help you increase conversions, shorten the sales cycle, and generate greater revenue for your software startup.
3. Align Your Company Efforts with Consumer Demands to Boost ROI
Demand gen is a fully-integrated approach that aligns your company efforts with what your prospects and existing customers actually need and want.
You can analyze data to understand what your potential buyers are doing at each stage of their journey. Using these insights, you can increase the efficacy of your marketing and sales activities based on how consumers react to them.
Using demand generation helps you spend money in the most effective way possible. This, in turn, helps you boost the ROI of your marketing campaigns.
Now that you know why demand generation is important, let’s take a closer look at how to use it effectively.
How Should You Build a Demand Generation Funnel?
Want to create a demand generation funnel that significantly boosts your startup growth?
Here’s how to start:
Understand Your Audience
The most essential part of any successful campaign is to offer solutions that your ideal buyers are looking for, in the way they like, when they need them, and via the channels they prefer.
To make this happen, you need to define:
- Who are your ideal customers?
- What are their pain points?
- How do they make purchase decisions?
- Where are they in the sales cycles?
- Which questions do they have at each stage of the sales cycle?
Having well-defined buyer personas can help you build a solid demand gen funnel for your software startup.
Create High-Quality Content and Syndicate It
You should develop content that educates your target buyers, addresses their questions, and helps solve their pain points. The focus should be on providing value instead of generating sales.
Using content marketing effectively can help you generate interest in your software. At the same time, it can help position your brand as a go-to resource or solution in your niche.
You should leverage multiple types of content for demand generation, including:
- Long-form educational posts on your niche topics
- Buyers’ guide for your software
- Insightful infographics
- How-to guides for beginners and experts
- Gated content
- Case studies
- Industry reports
However, developing great content isn’t enough. You should also syndicate it on other authoritative sites to increase its reach and, thereby, lead to more conversions.
Offer a Free Tool or a Free Trial of Your Software
As a software startup, you should offer free trials or a free tool to let consumers test how efficient your software is.
Even big brands such as CoSchedule and HubSpot offer free software solutions for demand generation.
CoSchedule’s Headline Analyzer is one of the most popular free tools today. It helps the brand attract a lot of traffic and recognition, which then translates into actual conversions.
Image via CoSchedule’s Headline Analyzer
Offering a free tool or a free service such as free calculators or reports can help you create demand for your core product.
Many software businesses offer a 14-day or a 30-day free trial, which helps them increase conversions. That’s because it’s easier to trust a product that you’ve tried using yourself for a few days.
You can’t improve what you can’t measure.
If you want to improve the ROI of your demand gen funnel, you should track results and evaluate what works and what needs to be optimized.
When measuring your demand generation efforts, you should focus on the quality of leads and the impact your marketing initiatives have on revenue generation.
Here are a few demand generation metrics that you should measure:
- Increase in traffic
- Number of new and returning visitors
- Content engagement growth
- Quality of engagement
- Number of sign-ups, downloads, or demo requests
- Sales and revenue
Are You Ready to Grow Your Software Startup with Demand Generation?
Demand generation is known to increase sales and customer retention for many brands. It can help you do the same for your software startup.
All you need to do is to leverage multiple marketing tactics to build awareness about your software, capture and nurture leads, and deliver efficient solutions.
Do you have questions about creating a demand generation funnel for your software startup? Let me know in the comments below.