In our last post, we touched on some of the operational scaling challenges associated with nearly every growth-stage tech-enabled services (TES) businesses. Today we turn our attention to the last and arguably the most ubiquitous growth imperative, demand generation.
So what exactly do we mean by demand generation? Let’s start with what it’s not. If you’re the owner-operator of a SaaS or TES business that’s growing at over 20% and approaching profitability, your marketing and sales team has already demonstrated its ability time and again to get well-qualified leads over the line. Also, in many instances, that first $5 million or even $10 million in revenue was sourced from the team’s personal network, hyper-focused cream-skim marketing tactics and a lot of heroics. Smarts, focus and scrappy execution has gotten you to this point. Getting to the next level requires more than guile; it necessitates that you institutionalize what has made you successful while you develop new systems, processes and measurements to scale your demand generation efforts. Demand generation, however, is not a euphemism for marketing and sales execution.
If you are like CEOs of most companies that have achieved initial market success, you may find yourself asking the following questions:
How do we open the aperture at the top of funnel and identify high probability buyers?
Where will our next $10 or $20 million in revenue come from?
Have we used our initial market success to clearly define or refine our positioning strategy? What long term business are we really in?
Where are we investing today; product vs. marketing, brand/messaging vs. campaigns/events?
Do we understand how buyers become customers?
What do they need in order to make an informed buying decision?
What role do our customers and our team members play in promoting the brand’s value?
These are just a few of the questions that must be answered before you can confidently invest in bending the growth curve. In order to build upon that initial market traction, many companies fall into the trap of focusing their growth initiatives on lead gen programs; experimental digital marketing campaigns, conferences and promotional events only to be disappointed with the results along with wasted time, energy and capital. Often confused with lead gen, demand generation is, on the other hand, a fundamental company-building block where positioning strategy, product, a deep understanding of the customer experience, content marketing, behavior-based nurturing, funnel management and conversion management align to form the foundation for accelerated growth.
Much like the other Big 3 scaling imperatives, demand generation is an organizational discipline. “Repeatable and scalable” should be the universal mantra. Unlike the other two, team development and operational scaling, which left unchecked can be growth inhibitors, demand generation is a “force multiplier” growth catalyst. When done well, the impact on top line revenue, profits and value creation is significant and material. This cannot be overstated.
So what’s next? Well, there are no silver bullets here. As was mentioned earlier, demand generation is an organizational discipline and you must first assess the team’s readiness to develop and execute each of the components of a demand gen and content marketing strategy. Rest assured you are not alone. Most of this is very new to even the most experienced marketing professionals. Identify a thought leader – inside or outside the company – to help guide you through a step-wise process of both introspection and action. Start by deeply inspecting the customer segments in which you have been successful. Seek to understand the journey that the buyers of your services traverse. Getting to the right demand generation strategy requires a deep appreciation of your market, your customers and future buyers by everyone in the company – top to bottom.
As we’ve said before, the secret sauce for any of The Big 3 isn’t just figuring out what the hurdles are but also how to empower your team to take up the gauntlet to address these critical success factors in the most expedient, capital efficient and durable fashion. In doing so you’ll also help ensure that every invested and/or re-invested dollar in the business will generate the highest returns.
In future posts, we’ll expand our discussion of The Big 3, delving a bit deeper into each one. In the meantime, you can find more resources and growth perspectives for your business at The Growth Equity Blog and the Workhorse Capital Blog.