Demand generation and inbound marketing are often considered the same thing. Like many marketing concepts, this is a case of mistaken identity or rather confusing two very different things in the same process.
These are two very distinct concepts in terms of your marketing strategy. In this article, we look at the differences between the two and how to use each to your benefit per your specific business needs.
Inbound Demand Generation Explained
Inbound demand generation is an inbound marketing strategy that produces content to attract potential customers. It uses the inbound philosophy for creating and capturing demand to leverage revenue.
This can be done through blogs, podcasts, video marketing, and various other content generation and posting platforms (social media marketing). What sets it apart from inbound marketing is how the strategy is aware of the fact most of your potential buyers aren’t looking for the solution you’re offering. It aims at the majority of the market that is not actively seeking your solution.
You exercise this strategy through your website by providing an exceptional user experience so you can convert high-intent users to buyers. These include people who have explicitly declared an interest in your product or services. Metrics to measure this approach include marketing-generated pipeline, marketing-generated revenue, and MQLS (High-Intent)
Inbound Marketing – A Brief Introduction
Inbound marketing was largely introduced to the market through HubSpot and has come to be a very popular B2B marketing strategy. The unique thing about this marketing strategy is how it places value on customers’ privacy and focuses on finding solutions to their problems or answering their questions and concerns.
Inbound marketing is aimed at educating the customer on their product and services and counts on that to form lasting customer relationships for long-term customer journeys. Unlike demand generation, this strategy focuses heavily on customers who are already interested in your solution and targeting them with solutions to their problems.
Lead generation is also a part of inbound marketing, but it is quite different from the ungated demand creation of inbound demand generation on its own. Under this strategy, the customer is granted access to content through gated forms and customers are slowly nurtured through emails and other ways of accessing content.
Through this nurturing process, the customers move along in the sales funnel where they are scored until a certain point after which the lead is transferred to the sales team and the purchase is finally pitched and closed.
Problems with Inbound Marketing
However, there are certain problems with inbound marketing that are important to discuss for your further understanding of it. Let’s get into them!
1. Limited Reach
Inbound marketing does not create demand, the strategy only captures it. This means that your leads are limited to people who are actively looking for solutions through Google and review sites (like G2 and TrustRadius). They have reached the stage of evaluating the potential solutions by first recognizing the problem at hand and then looking for solutions for it.
This will obviously make up for a very small percentage of potential buyers who might not even be aware of the problem they’re facing. As the pool you’re targeting is limited, your marketing reach is also very limited, depriving you of very high customer acquisition or buyer conversion rates which can be detrimental to your sales process.
2. Unwillingness to Become Leads
The hardest part of inbound marketing is shortlisting potential leads and prematurely tracking their contact information to generate a lead score profile. This is then later, nurtured through content by email or such platforms.
Now, the issue that arises with this is the hesitance people feel in handing our their contact information like email or phone number in fear of getting spammed by someone trying to sell them stuff in their inbox. Buyers don’t willingly hand out contact details before they already have a conversation with you.
3. Complicated Buyer Journeys
Buyer journeys are more complicated than the funnel process of top of the funnel (TOFU) to the middle of the tunnel (MOFU) to the bottom of the tunnel (BOFU). The modern customer simply does not partake in such an aligned buying behaviour.
Buyer journeys are much more complex and unpredictable than this simple linear funnel. This hyper-focus on the funnel means you’re missing out on the bigger market that you can capture using other methods of raising awareness regarding your product/service.
As this process disrupts the natural flow of customers looking for and evaluating their options, it might lead to a pre-determined false image of your brand as ‘pushy’ which would ultimately drive customers away.
Why Focusing on Demand Generation is Important
In this section, we will focus on why demand generation is essential in today’s business climate very briefly.
1. Wider Reach
Needless to say, when you’re creating ungated content, it will have higher visibility. It might help educate people on the subject even before they realize there is a problem in their operations. It actually might help customers find out their problems and how to solve them.
As your content will be out there for everyone to see you will have maximized your reach and you’ll become a part of their evaluation process even before reaching out personally.
2. Understanding Complex Buyer Journeys
This strategy is less disruptive and does not pre-suppose an arbitrary funnel dictating the customer journey. This means that you will not be investing your resources and time tracking down leads and overflowing their inboxes with content they might not even want.
3. Buyers’ Anonymity is Preserved
As customers will be coming to you themselves through your great content, they can choose to not hand you their contact details. This preserves their anonymity and privacy whilst also making them a buyer so your goal is already met.
How are Lead Generation and Inbound Marketing Related
Inbound marketing actually just falls in the box of demand generation. Because the content that a firm is putting out is supposed to generate prospective leads that you later get to convert into buyers.
A company’s aim is after all to track successful leads and convert them into buyers. So, a well-executed inbound marketing strategy requires an in-depth understanding of both these processes, how they’re different, and how they can be used to hit the highest conversion rates and generate more revenue.
Final Word
While the choice between demand generation vs. inbound marketing isn’t easy, Industry experts and CRM (customer relationship management) consultants, like our seasoned professionals at Techloyce, can help you make the right choice in strategy selection and implementation.
In the end, the decision to choose which strategy works for you is based on your specific business goals and needs. It is hard to navigate new arenas and marketing strategies on your own, it is like taking shots in the dark, but consultants can ensure that your efforts, time, and resources aren’t wasted by guiding you in the right direction.
