Our recent webinar on the difference between account based marketing, demand generation and B2B lead generation. Watch the video or read the transcript below!
SPEAKERS
Jason Sanders
In today’s environment, marketers are faced with all kinds of challenges. They’re looking for ways to drive value and positively impact business outcomes. With so many tactics and campaigns to choose from, there is never a shortage of discourse on which are the most effective or debate about some of the fundamental differences.
So with that, let’s jump in and introduce the team. My name is Jason Sanders, and I’ll be your moderator today. With me is a great team from the ABM agency. We have Jason McDaniel, Director of Strategy, Jonathan Ward, Director of RevOps, and Rob Elbaz, Director of Advertising Operations.
Let’s start by asking the question:
What is the difference between Demand Gen and Lead Gen?
Jason McDaniel
Demand Gen is all about generating awareness at the top-of-the-funnel, which later influences bottom-of-funnel activity. This approach often generates leads (or lower-level touches) from a target account perspective. As a strategy, it’s about that top-of-funnel awareness and the process of moving that demand strategically down the funnel using nurturing tactics.
Whereas, Lead Gen focuses primarily on those low-funnel activities. The strategy hinges on generating high volumes of low-intent leads for the cheapest cost. Many times those leads can be relatively out of market, as represented by people downloading content as opposed to filling out a contact form. These leads are not easily workable because they have not explicitly expressed any interest or demand. Often, this approach generates leads that fall outside of your ICP.
Jonathan Ward
What makes this such a relevant question is that Demand Gen and Lead Gen are frequently talked about both as strategies and as tactics. That can get confusing.
Demand gen is more of a strategy designed to generate demand by educating your potential customers by providing value. When they’re ready to buy or ready to engage with you, you’ll be top of mind and they will come organically.
Lead gen is a tactic to capture that demand.
As is the case with marketing terms, Lead Gen and Demand Gen have been ‘rebranded’ and are often referred to as creating demand vs. capturing demand.
The key is that you can’t effectively do one without the other. You can create demand all day but if you don’t have a mechanism to capture it, you will not be successful.
Rob Elbaz
It’s very challenging to be successful without doing some form of Lead Gen. There’s a much higher focus now on Demand Generation and actually building up your market. Making sure there’s a demand for your product, making sure that you’re a thought leader in the space and that you’re seen as the gold standard for solving the product or the need that you’re generating demand for.
While this is very trendy, you still need something to capture those leads on the other side. You need something that’s going to turn somebody who is aware of the problem and is interested in your solution into someone workable, someone that you could speak to somebody that you could close a deal with.
What do you think is driving the shift from Lead Gen to Demand Gen in most organizations?
Jonathan Ward
If you have spent any time on LinkedIn, you will see people evangelizing this shift all over the place. You’ll see variations of people proclaiming that Lead Gen is dead or the MQL is dead. There is a lot of talk about things like the dark funnel and how we should move away from measuring those top-of-funnel tactics.
There is some validity in those statements, but at the end of the day, they lack nuance, which has led many organizations to adopt tactics and strategies that focus on the wrong thing because they are optimizing for the wrong outcomes.
When we look at Lead Gen, optimizing for lead volumes is not necessarily an effective strategy, and people are beginning to see that. Optimizing for business objectives that really drive true ROI and revenue, is where the trend is moving.
Demand Gen does a better job of facilitating those revenue-focused goals, but there are trade-offs. It takes longer to generate demand organically before somebody is ready to inbound. You have to ultimately build up credibility to be considered in a buying decision.
Jason McDaniel
The idea of generating leads is never going to be completely dead as a concept because leads can drive revenue and pipeline. But when we as marketers think about Lead Generation, many organizations are doing it poorly. There’s a big difference between executing Lead Gen well and executing Lead Gen poorly.
Focusing on strategies and tactics that are designed to generate leads for the sake of generating leads versus those that focus on quality/offer a strong value prop, and are tied to organizational KPIs will never lead to success.
So why does this continue to happen? Marketers get desperate. They turn to channels and tactics that will knowingly drive poor leads. Driving activity for activity’s sake because that’s how their performance is measured.
From a bottom-line perspective, these efforts will fail to generate revenue, which is why people on social media are talking so adamantly about focusing on Demand Gen, driving demand down the funnel by focusing on quality, and getting people to actually engage and have conversations with sales.
Where does ABM fit into all this?
Rob Elbaz
ABM can be layered into both Demand and Lead Generation strategies. When talking about ‘push’ advertising on display networks or running SEM it’s always a question of who you’re targeting. You want to be targeting people from the types of companies and persona’s that you want to get in front of, and ABM helps you do that.
When you’re ‘pulling’, you’re talking about Demand Gen. This requires you to think about exactly who you are talking to. What type of bait do you need to line your hook with to make sure you’re attracting them to your website? In this case, when we’re talking about ABM you are going after specific accounts, building out your ideal customer profiles (ICPs) to make sure you understand who to reach for.
Using ABM means there is less lead gen to be done because you already know which companies you’re going after. Today there are so many tools that can help you fill in the blanks and ensure you are targeting just the right people within those companies, where they are in the funnel, and how far along they’ve gone in their customer journey.
Jason McDaniel
Demand Gen works very synergistically with ABM when you’re approaching it from a top-of-funnel mentality. When the goal is to generate awareness amongst accounts there’s a handshake process that takes place where we can see the accounts that are engaging with those programs.
Using intent data, visitor intelligence, nurture sequences, and automation flows, you can piggyback off many of those signals to help develop more streamlined target lists. It all comes down to the audience that you’re targeting, and ABM does a really great job of shining a light on the accounts that are the best fit to target.
How does ABM fit into your demand gen strategy?
Jonathan Ward
One of the main questions you should ask before adding ABM to your Demand Gen strategy is: do you have a strong Demand Gen framework already in place? If you have that, it’s a great opportunity to begin adding ABM to your strategy. But, it’s important to have the fundamentals in place to execute ABM effectively. ABM can be a pretty heavy lift, so making sure things like standard lead routing is properly set up, having the team and infrastructure in place, and having a clear definition of who your ICP is will really help ensure that you’re setting yourself up for success.
You must consider the time it takes to create personalized content for 1:1 account outreach. Do you have a team that can support that? Do you have the infrastructure and technology needed to target those accounts on a 1:1 basis?
Some organizations may not have the team in place, the capacity or the experience for tech stack, etc. Can those organizations still run an ABM campaign? Or is that something that they need to build towards?
Rob Elbaz
Absolutely. When you’re thinking about how costly it can be to run ABM (in terms of time, resources, and money) a great way to lower those costs is by working within an agency so that you could piggyback off of some of the cost savings that they have built into it. But you need to understand what the payoff is depending on who you are trying to target.
The chart (pictured below) shows how a company with less revenue may have shorter buying cycles and a single decision-maker who’s getting involved. In this situation, contract sizes aren’t very large. You don’t necessarily need to be making that ABM push if this is your target audience. This may be a better play for Demand Gen or Lead Gen when getting that volume and going after a lot of small businesses makes more sense, and you don’t need to necessarily invest as much into any single account.
When targeting mid-sized companies with multiple members on the buying committee, you need to focus on giving people content that helps drive discussions internally, and when they do, they’re bringing up your material. They’re saying, ‘Have you seen this fantastic webinar that discussed the difference between Demand Gen, Lead Gen, and ABM?’ This approach is more suited for Demand Gen with layers of 1:Few ABM on top.
Looking at large enterprise companies, you start seeing large contracts and buying committees that can be multiple members laid out over multiple geographies. This is where ABM gets attractive because the difference between winning and losing a deal can be hundreds of thousands, if not millions of dollars.
The difference between getting the most out of a deal and making sure you’re finding the exact right product fit or service mix to bring to that client is critical. You want to make sure that, you’ve checked every box, you’ve dotted your I’s, and you’ve crossed your T’s so that you’re bringing them a hyper-personalized, unique experience that will seal the deal and win that contract.
When dealing with very structured procurement processes, larger buying committees, and more complex sales cycles, how do you decide what type of ABM campaign to run?
Jason McDaniel
Yes, you need to determine what your priorities are. Some questions to ask include:
- Does your target audience know you in the market?
- What type of accounts are you trying to target from a firmographic perspective?
- From a revenue ban perspective?
- What’s the maturity level of your current program?
- Are you starting it from the ground up?
- Is it something that’s been running for some substantial amount of time?
- What are your capabilities in creating personalized content?
- Do you have a team that can fully satisfy those 1:Few or 1:1 type campaigns?
Answering these questions will help determine what campaign is best for you.
Rob Elbaz
Starting with 1:Many campaigns (or Demand Gen), the goal is to grow demand by talking to the right people across a larger universe of accounts. With a strong foundation there, you can start to narrow down the biggest opportunities that you could group together.
This is where targeted ABM (1:Few campaigns) come into play. Targeting a handful of accounts with something that links them together. This could be a common message or theme that you’re going to let these accounts know you’re speaking to their specific pain points.
Eventually, you may want to target accounts one-to-one. If it’s worth it to go after an account with a very targeted push, you can begin to tailor collateral specifically to them. At this stage, you not only want to reach them but reach them with the right message, right product, and right packaging that’s going to let them know you mean business.
Remember, you have to make sure everything is in place to show that you’re talking specifically to this account, you are providing value and there is a good fit. You’ve done the work to determine for them that you’re a great solution, you meet their needs, and can help them be more profitable. It’s just about convincing them of that.
Jason Sanders
It sounds like orchestration is critical for 1:Few and 1:1 ABM. Can you expand on how this impacts the sales side and what consideration you give to sales enablement or the sales handoff?
Jonathan Ward
1:Few and 1:1 campaigns lend themselves to a high level of sales involvement. Often you are targeting large accounts where retention and expansion are important. Making sure you have that alignment with sales is critical when relationships are already established within the organization. Communicating your approach on the marketing side, along with what’s been effective will help the sales team understand what sort of messaging to use, what sort of content is out there that’s resonating with those accounts, and kicking off those conversations that will lead to a higher level of success.
Rob Elbaz
Make sure you’re doing the right things in terms of marketing automation and monitoring so that sales and marketing aren’t stepping on each other’s toes. Once sales have established contact and the deal or account has matured, marketing needs to keep pace and message appropriately. Making sure sales and marketing are working in lockstep is a huge part of the success of ABM.
What does success look like for each type of campaign?
Rob Elbaz
With Lead Generation, success is determined by lead volumes but it has become more important to make sure those leads are actually high quality. If you’re not generating quality Marketing-Qualified Leads (MQLs), they won’t turn into sales-qualified leads (SQLs), opportunities, or closed deals. These lower-funnel metrics are becoming critical to be considered successful today.
Costs are another important factor when tracking the success of campaigns. Understanding cost along with the rate leads turns into opportunities to help prove ROI.
Demand Generation success metrics are trickier to measure because it can take months or even years for someone to turn from an interested viewer into a customer. Engagement metrics, like website traffic or blog views, are a good place to start for top-of-funnel success. How that content performs within your target audience is also a good gauge for success. Many of the tools and technology out there can help you gain visibility into those metrics.
With ABM, success is fairly cut and dry because you have your target accounts you need to look at:
- How many of those accounts you’re reaching?
- How they progress through the funnel?
- How many turn into close won deals?
- For existing clients, how many of those accounts are maturing?
What’s nice about the ABM is that if you’re setting your target account list properly, measuring success becomes a question of measuring the health of each of these accounts within that target list.
Jonathan Ward
With Demand Gen, and even more so with ABM, the metrics and KPIs are more skewed toward business objectives and revenue. As discussed earlier, one of the main reasons organizations are moving away from Lead Gen is because those efforts have long been optimized for those top-of-funnel activities.
What are some of the reasons that organizations aren’t successful and deploying an ABM campaign?
Rob Elbaz
ABM has become something that every B2B marketer is being told that they should be getting involved in but they don’t necessarily understand what they want to get out of it. Advanced planning is necessary to build out a target account list, identify ideal customer profiles, create personas and target the proper buying committee.
Messages need to be crafted for each persona and tailored to specific channels to best deploy those messages. So if you’re not planning every step of the way, if you’re not checking all those boxes, if you’re missing steps, then, unfortunately, you’re setting yourself up for failure.
Jason McDaniel
Organizations often don’t set themselves up for success. They’re not measuring the right touchpoints. They’re approaching it using traditional Lead Gen KPIs, or they have knee-jerk reactions when they don’t immediately see leads come in through.
Organizations need to reframe what success will look like for ABM programs, especially with leadership. Setting the proper expectations at the beginning will avoid confusion with lead volume is not high after three months of execution. A lot of folks tend to lean on those traditional KPIs, which can derail the true value of ABM.
If you want to get in touch with the ABM Agency, they’re at abmagency.com. You can follow them on LinkedIn, as well.