what is demand generation

What Is Demand Generation and How Can It Grow Your Agency?

Key points

  1. Demand generation is a marketing strategy that focuses on building relationships with potential customers and guiding them through the entire buyer’s journey.
  2. Effective demand generation requires a deep understanding of your target audience, their pain points, and their behaviors across different channels and touchpoints.
  3. The goal of demand generation is to build long-term relationships with potential customers and drive revenue growth.

Starting a business with the hope that customers will flock in is an ineffective strategy in today’s competitive market. No matter how great your product is, people won’t come if they don’t know it exists.

To combat this issue, most companies rely heavily on lead gen marketing. But there’s an alternative strategy, which is to create brand awareness and drive interest in your product or services.

This is exactly what demand generation entails.

In this article, you’ll learn:

  • The definition of demand generation

  • How it differs from lead gen marketing

  • Metrics to measure the success of demand generation campaigns

  • Team roles in demand generation

  • Demand generation solutions you can use to scale your agency

What is demand generation?

Demand generation is a marketing strategy that focuses on driving brand awareness and interest in your business and its product or services.

The term demand generation (also called demand gen) isn’t the latest buzzword in town. It has been in existence for years. However, it recently started gaining prominence as businesses now understand the importance of providing value to their audience before asking them to buy.

In short, demand generation starts with:

  • Researching your ideal customers and creating a buyer persona

  • Developing free, valuable content like images, videos, infographics, podcasts, and thought leadership blog posts that address their problems and position your product as the best solution.

  • Promoting your content using various channels like social media, website, or email to create awareness and generate demand.

Is demand generation the same as lead generation?

According to a recent demand gen survey, 69% of marketers indicated their demand gen budgets were planned to increase between 1% and 20% in 2022. Some of them seem to be confused about the terminology, though. They often interchange demand generation and lead generation. While the strategies may overlap at certain points in your marketing strategy, they are not the same.

Lead generation focuses on capturing the details of prospects who have shown interest in your business; then nurturing them until they become customers.

On the other hand, demand generation is a broader marketing strategy that touches on the different stages of a buyer’s journey. So it’s safe to say lead generation is a smaller part of a demand generation strategy.

But some agency owners make the mistake of focusing only on lead generation. This strategy isn’t sustainable in the long run because not everyone is ready to buy. This opinion is shared by the pioneer of demand gen:

Most companies in this space do lead gen, not demand gen. The marketing is built around transactional conversions of contact information so you can do outbound sales. The new way is to lean into the fact that word of mouth drives most buying decisions inside mid-market enterprise B2B SaaS. We don’t try to convert people who aren’t ready to buy. Instead, we educate them through content as a way to create attention, product consideration, and some of those word-of-mouth actions inside of channels that we can’t necessarily measure or see.

Chris Walker from Refined Labs
Chris Walker , Refined Labs

Demand generation vs. demand creation

Demand generation and demand creation share the same goal of driving demand and interest. But where do they differ?

Demand generation

The goal of demand generation is to increase your sales pipeline with quality leads that will help you scale your agency. When you provide the right information to the right audience at the right time, you generate demand for your solution.

To me, demand generation is it’s essentially playing the long game with it where you’re not asking for some type of purchase or action right off the bat, but it’s understanding who are the people that would benefit from your product or service, how do you get in front of them, how do you generate future demand?

Sam Kuehnle from Refine Labs
Sam Kuehnle , Refine Labs

Demand creation

Demand creation is a marketing strategy that focuses on building awareness and demand for a new product.

Imagine you identify a recurring pain point in your industry that none of your competitors are offering as a solution. Wouldn’t it be a great idea to create a product around it? You bet it would.

But getting clients to buy your new product will be difficult because there’s little or no demand for it. In fact, your potential clients may not be aware of the problem that your product solves.

So what do you do? Create demand for it by sharing valuable content to help people realize the problem and position your product as the solution.

Take Airbnb for example. Long before they launched, hotels and guest houses were in existence. But the founders identified a problem that most people weren’t aware of and created a product to address it. Today, the company is worth $60 billion.

What’s more, demand creation is not limited to building awareness and interest in new products alone.

Businesses that want to:

  • Promote an existing product to a new audience can also make use of demand creation tactics.

  • Introduce an improved product to their existing clients must also create artificial demand because people are not easily receptive to change.

Demand generation metrics: what should I measure?

Likes, shares, and retweets are nice, but measuring your demand generation tactics go beyond vanity metrics. To get a true sense of how your demand generation campaign is performing, you have to track the right metrics.

demand generation metrics

This way, you can:

  • Analyze your marketing campaigns

  • Identify areas to improve

  • Use the data to optimize and improve your demand generation campaigns

That said, here are seven important demand gen metrics to measure:

1. Marketing qualified leads (MQLs)

Marketing qualified leads (MQLs) are the people who are aware your business exists, and have shown an interest in your agency’s products or services. Tracking this metric gives you an idea of how well your potential customers recognize your brand.

2. Sales qualified leads (SQLs)

Once your sales team has identified potential clients who are more likely to purchase your product, they become sales qualified leads (SQLs).

SQLs are considered more qualified through their behavior and interactions with your sales team. As such, tracking the metric helps you understand the nature of leads that are coming in through your sales funnel. An effective demand-generation process will lead to more SQLs.

3. Cost per acquisition

What’s better than getting clients? Getting clients for a lower cost. Something most agency owners desire. But how will you know the amount you’re spending on acquiring a client if you don’t track it? That’s where Cost per acquisition (CPA) comes in.

CPA is the amount it costs to acquire a single client for your business. Tracking this metric helps you determine whether you are spending a lot of money to get clients. To calculate your CPA, simply divide the total amount you spent on a marketing channel or your entire marketing activities by the number of clients you acquired.

For example, if you spend $2,000 running Facebook ads, and you get 20 customers, your CPA will be $100. In other words, you spent $100 to acquire a single customer.

4. Cost per lead

Cost per lead (CPL) is the amount it costs your agency to get a new lead.

To calculate your CPL, simply divide the total cost of a marketing campaign by the number of leads generated. For instance, if it costs $1,000 to run a lead gen campaign and you got 20 leads, then your cost per lead will be $50.

The importance of tracking your CPL is to determine the efficiency of your demand generation process across all marketing channels.

5. Customer lifetime value

The goal of every business owner is not only to acquire clients but to also retain them long-term. Remember, it costs less to retain clients than to acquire new ones.

That’s the importance of tracking your customer lifetime value (CLV). It helps you understand the total value a customer brings over the course of their entire relationship with your agency.

CLV also helps you to better understand the impact your demand gen campaigns have on your bottom line, understand the potential value of different customer segments and identify opportunities to increase customer retention and revenue.

To calculate your CLV, simply estimate the average amount of money that a customer will spend on your business throughout your relationship with you and multiply it number by the length of time that they will remain a customer.

6. Demand gen cycle length

Depending on the nature of your business, some sales may take longer than others. However, it’s essential to track the demand gen cycle length because it will help you understand how long it takes to close a sale. If it takes longer than normal, you can identify areas to shorten the sales cycle.

Also, this metric will help you identify the channels you are closing clients in a shorter time frame. This way, you can focus your demand gen efforts on these channels.

Team roles in demand generation

As organizations are increasingly adopting demand generation as part of their marketing strategy, it’s no surprise to see team roles being carved out to ensure marketing campaigns are successful.

team roles in demand generation

However, even experienced sales and marketing teams will have a hard time generating demand for a product without sufficient knowledge and experience. That’s why you need a dedicated demand gen team to manage all campaigns at different stages of the sales funnel.

Depending on the size, structure, and budget of your agency, your team can be made up of individuals who specialize in different areas.


Let’s take a look at some important demand generation team roles:

1. VP of demand generation

This VP of demand gen is responsible for developing and implementing effective demand generation strategies, as well as overseeing the day-to-day activities of the team.

The success and growth of any demand generation process is solely on the manager. In smaller organizations, this person is the Manager or Director of demand generation.

2. Marketing automation specialist

According to the aforementioned 2022 demand gen survey, 39% of marketers identified marketing automation as a key initiative in accelerating their demand gen strategies.

39% of marketers identified marketing automation as a key initiative in accelerating their demand gen strategies

A marketing automation specialist is a key player in any demand generation team. The person uses marketing automation software to manage and execute several demand gen campaigns like lead scoring, email marketing, lead nurturing, chatbot marketing, etc.

3. Content marketing specialist

Behind any successful demand generation program lies a powerful content strategy. And the reason isn’t far-fetched. Content is what you’ll use to attract, educate, engage and provide value to potential customers. The right content will position your business as an authority and build credibility in the eyes of your audience.

It’s not a surprise that, according to an IAB research from 2014, 93% of B2B marketers use content marketing to increase engagement and demand for their services. Also, 58% of marketers say content marketing will see an increased budget prioritization in 2022 which is bound to increase in 2023 and beyond.

58% of marketers say content marketing will see an increased budget prioritization in 2022

A content marketing specialist’s role is to create compelling content that resonates with your target audience and generates interest in your product. Content such as blog posts, social media captions, white papers, email newsletters, landing pages, etc. At the same time, they should be tracking the content marketing ROI to ensure that the results are inline with the time, effort, and money spent.

Read next

4. Social media manager

If you want to create awareness and interest in your product, there’s no better place to do it than social media because that’s where most people spend their time. The average person has 7.6 active social media accounts and spends 2 hours and 24 minutes a day on them.

The social media manager manages your agency’s social media accounts and leveraging them to create awareness, engage with prospects and drive conversions.

5. SEO specialist

When your potential clients are searching for a solution to their pain points, more often than not, the first place they go is Google. As such, one way to generate demand for your product is by optimizing your website to increase its visibility on search engines. That’s the job of an SEO specialist.

Grow your industry knowledge

Join thousands of agency owners and get our best agency growth content in your inbox, one email per month 👇️

An SEO specialist handles on-page and off-page website optimization, researching relevant brand keywords, optimizing website content and blog posts, and improving the technical parts of your website.

6. Analytics specialist

When all is said and done, you must track your demand gen campaigns to help make data-driven decisions. This is the job of an analytics specialist.

An analytics specialist is responsible for:

  • Using analytics tools for agencies to track and measure the performance of demand generation campaigns

  • Analyzing the data generated from demand generation activities

  • Providing insights and data-driven recommendations to the demand generation manager

The analytics specialist’s role is crucial because insights from the report will help identify trends, study consumer behavior and suggest areas of improvement.

Track everything about your agency with our powerful analytics feature

These are some common roles on a demand generation team. By leveraging the expertise of each specialist, your team can effectively create awareness and interest in your product, translating into quality leads and sales for your business.

Here are four common software demand generation professionals use to track campaigns, automate, measure metrics, and scale their agencies.

1. Act-on for marketing automation

Act-on for demand generation

Act-on is a dream software for demand generation marketers. It’s a marketing automation platform that makes it easy to attract, engage and convert prospects to clients all in one app.

It offers various features such as email marketing, lead scoring and nurturing, build lead generation landing pages, social media management, analytics and more. Act-on is great for creating, implementing, and optimizing your marketing campaigns.

2. Hubspot marketing hub for marketing strategy

Hubspot marketing for demand generation

Hubspot marketing hub is a platform that provides a range of tools for marketing and sales teams to manage their marketing tactics and improve their performance.

Some of its features include website and content management, social media marketing and email and campaign management, lead management, reporting and analytics.

3. Service Provider Pro for client management

SPP logo
Scale your agency operations with the SPP.co client portal.
Find out more

Once your demand generation strategy is in full swing, you’ll need a platform to manage clients. This is what SPP was built for.

One of SPP's features that’s great for demand gen is the drag-and-drop form builder. You can use it to create custom contact forms for inquiries or to get prospects as leads into your client portal.

4. Xoxoday Plum for rewarding loyalty

Xoxoday Plum for demand generation

Rewarding loyal customers is a great way to keep generating demand for your product. It also helps with word-of-mouth marketing as customers are more likely to refer others to your business if they are satisfied with your services.

As such, you can use software like xoxoday plum to send incentives to your loyal clients. Xoxoday plum offers a range of tools for employee engagement, rewards and recognition. It helps businesses improve employee morale and productivity. This way, you can generate leads through referral programs and employee advocacy.

What is demand gen FAQ

What is meant by demand generation?

Demand generation is a broad marketing strategy with the goal to bring attention to an offering, usually via free content (blog posts, videos, infographics).

What are demand generation campaigns?

A demand generation strategy can include specific campaigns that have different goals. For instance, focusing on being interviewed in podcasts to reach a specific audience.

Demand generation vs. demand creation?

While the goal of demand generation is to find quality leads for your sales pipeline, demand creation focuses on building awareness about your product or service.

What is demand generation in simple words?

Demand generation is a marketing strategy that takes your service or product into account in order to create awareness for them. The end goal is to create leads that you can turn into customers.

Why is demand generation important?

One of many benefits of demand generation is that it brings attention to your service/product and establishes you as the go-to solution for a problem. It should be an essential part of your marketing funnel.

How to measure demand generation?

This data-driven marketing channel needs to be measured with the help of key performance indicators (KPIs) in order to know if it’s successful.

Scale your agency with the power of demand generation 

As you’ve seen throughout this article, demand generation is an essential strategy for any agency looking to build an effective sales process, increase its customer base and drive sales.

By identifying your ideal clients, creating compelling content, implementing targeted marketing campaigns and leveraging several channels, you can effectively generate demand for your products or services and get high-quality leads.

Also, it is important to continuously track, analyze and optimize your demand generation efforts. This way, you can be sure you are reaching your target audience and acquiring clients in a way that is not affecting your bottom line.

Avatar of Chris Willow
Founder of SPP
Chris started Service Provider Pro back in 2014 as a way to help automate a video production agency he was running at the time. Being early to productized services, he was frustrated with having to piecemeal different tools and services and ended up building an all-in-one client portal platform for himself and a few friends. That eventually took off and now Chris helps agency owners scale through software and systems.

Running an agency?

See how a Client Portal can help you sell more services…
Learn more