After 30 years in Marketing at F500 and start-ups, I believe Demand Creation is a critical Marketing function that exists to provide the fuel to build a qualified pipeline for sales to meet or exceed their quota.
Based on hundreds of conversations with CEO’s, VPS, management teams and boards, I can confirm that the definition provided above would be interpreted many different ways and it would create wildly different expectations.
Get the Terminology Right
First, let’s double click on fuel. I chose this word so a question would be raised immediately for clarification of the term. The term most frequently used to correlate Marketing to pipeline is “leads”. The issue I have with the term “leads” is that it has been bastardized by so many people for so long that the term has become meaningless.
For example, most people that use the term “lead” would categorize all of the following the same:
– Someone who filled out a contact us form on the website
– A business card collected at a tradeshow
– A webinar attendee
– Someone who registered for a seminar but did not attend
– A white paper download
– Or, a free trial download
Demand Creation Initiatives Generate Responses
I prefer to replace the term “lead” with response. For example, all of the demand creation vehicles mentioned above produced a response. A stimulant was introduced and it generated a response. Now, responses must be filtered and those that fit the criteria that have been jointly established by sales and marketing (size of company, industry, geographic location, title, role or responsibility, etc.) advance to be termed Marketing Qualified Lead.
A Marketing Qualified Lead (MQL) is then passed form Demand Creation to the Demand Management team. If the MQL passes meets the criteria of the filter that has been mutually agreed upon by Sales & Marketing (sometimes this is BANT or it could be other motivational criteria), then it becomes a Sales Qualified Lead (SQL). At this point, the SQL usually appears in the SFA system as an opportunity (i.e., in a Sales Reps forecast) with a weight of about 20%.
Some companies chose to further qualify the opportunity by using terms like Sales Accepted Lead or Totally Qualified. If Demand Management and Demand Creation are not in the same organization (Marketing) these terms may be required to legitimize the hand-off.
Not All Pipelines Are Created Equal
Pipeline requires an agreement between Sales & Marketing that specifies what pipeline is supposed to be created from the Demand Creation plan. Specifically, is the pipeline being built for new license revenue, up-sells, service engagements, education and/or maintenance revenue? If the goal is gain market share and capture new customers? If it is, then the Demand Creation resources should be allocated accordingly and not focused on maintenance renewals. Agreement of what to generate and alignment of resources is a critical step.
Next, what is the multiple of quota that you are driving to build in the pipeline? Is it a 1X, 2X or 3X pipeline? Also, what is the expected close date for the pipeline? Is it a 3X pipeline that is suppose to close by the end of the fiscal year or is suppose to close by the end of the quarter?
Finally, what portion of the pipeline is supposed to be driven by Marketing? Is it 10%, 50% or 100% of the pipeline? What portion of the pipeline is the Sales team committing to provide? Do the totals add up to 100%? Typically, the smaller the company the larger the contribution by Marketing.
Demand Creation Exists…
Demand Creation exists to provide the fuel to build a qualified pipeline for sales to meet or exceed their quota. However, there are a number of key questions that need to be explicitly agreed upon to set Sales and Marketing up for success– building ample pipeline for the organization to make its number. Above, we have covered some of the most glaring oversights company’s make but there are many more.
For more information about Demand Creation, please visit http://www.fourquadrant.com.