"Demand Generation" is a Misnomer

Why do marketers call it "demand generation"?

They're not creating demand.  Instead, they should be calling it "lead generation".

Check your microeconomics text to be reminded of the difference between a "change in demand" Vs. a "change in the quantity demanded".

Either of two situations determines demand and the quantity demanded.

1. The environment [social, economic, governmental regulations, technology, and competition] is what drives and enables demand for commodity products for buyers who are employing traditional deductive problem solving techniques e.g. here's the pain caused by my problem and here's the root cause of the pain.  After evaluating potential solutions, they find the best price/performance fit. Marketers influence the quantity demanded based on their pricing and campaign tactics.
2. For those companies who are lucky enough to have a new paradigm e.g. Apple iPad, potential customers can be persuaded to find the funding to purchase them based on inductive reasoning e.g. here's a new idea or product; what can I do with it to improve my current position?  Pricing is probably elastic and producers can associate their capacity with the quantity demanded based on how they price the product.

Demand Generation Crates New Categories

Ideas Become Reality Through Demand Generation Programs

Entrepreneurs introduce their products to innovators and early adopters who find the financial, human and complementary resources to "make it happen".

If their idea catches on, they generate early stage demand for a new category of products.  Then, when it looks like the coast is clear, companies who employ a "category marketing" strategy add their own versions to the category.  This helps the category to grow faster than if innovators try to do it all themselves.

Consider what happened in the early 80's. The Apple II jump started the PC market to reach critical mass and then IBM jumped in with its PC and created a mega-category through its captive corporate market. Tektronix kept its proprietary hi-res graphics "storage tube" technology to itself. Both Apple and Tektronix eventually lost their high introductory stage market share leading position of relatively small categories to "standards" applied by everyone else in the growth stage of their respective mega-categories.

Tablet computing is another example.  After false starts by many tech companies, Apple found the key to success.  As its iPad moved from introduction to growth stage, it open the door to versions from other companies.  It remains to be seen as to whether Apple retains leadership in this new category.

As a category evolves, total demand shifts to the right as "early majority" pragmatists justify their investments on ROI and TCO benefits.

Once a category is created, however, companies hire sales teams to ensure that they are filling up their capacity with orders.  This is when "demand generation becomes a misnomer".

Thanks for reading.

Great Byproducts from Achieving Ambitious Goals

In 1961 when President Kennedy set what most perceived to be an overly ambitious goal of safely landing an American on the moon in less than 10 years, his goal was to pass the USSR in the space race.  No one imagined the thousands of by-products that would impact computer technology, environmental and resource management, health and medicine, industrial productivity, manufacturing technology, public safety, transportation, along with home, recreation and consumer products.

If it weren't for the space program we wouldn't have the iPad, iPod, CDs, DVDs, microcomputers or Wii virtual reality games. We wouldn't have non-invasive medical imaging devices.  Automobile designers wouldn't have been able to benefit from aerodynamic design software.  Air quality monitoring systems that have helped us to significantly improve our environment wouldn't exist.  PV solar systems wouldn't exist.

I also learned that NASA technology has been leveraged to produce enriched baby foods and water purification systems for underdeveloped countries. Scratch resistant lenses and ribbed swimsuits were also invented using space technology - even the DustBuster.

Maybe we're beginning to reach the point of diminishing returns from the space program investment, but I doubt it.  My point is that the investment of time, creativity and money in achieving monster goals will produce significant byproducts if we act with wide peripheral vision.

JFK's 10 year horizon looked impossible to reach, but look what his legacy has delivered almost 60 years later.

Cloud Computing: Nothing really new here

Here's an example of how acquisitions can kill a company's innovation culture.

Back in 1974 Telenet Inc. offered the first cloud based data network.  Customers connected their computers to the cloud.  Their users would dial into the cloud and connect to their host's network address.  This saved customers from having to design, install, maintain, upgrade and manage their own private networks.  It also enabled employees to work remotely and and globally and for customers and vendors to "connect", which created efficiencies and a competitive advantage.

In the early days Telenet's customers were primarily the early adopters who saw the benefits and were willing to "make it happen" for their companies.  As they proved the benefits of cloud computing, the mass market pragmatists jumped on board.  This set the stage for AOL and other Internet communities that hit the scene in the 1980s.

Then, in the late '80s, Telenet continued its innovative product line strategy by offering cloud based email and EDI services to customers who had gained confidence in using its cloud based dial-up network services.

Unfortunately, when it was acquired by Sprint, Telenet's product innovation came to a halt as Sprint milked Telenet as a cash cow and force fitted Telenet into its telecom carrier services culture.

If this acquisition hadn't happened, cloud computing services would have been available many years ago and what we're reading about today wouldn't be such big news.

Most Acquisitions Are Optimized For the Short Term

There's Only so Much that you Can Squeeze out of a Sponge

For clients who have grown by acquisition I've noticed a common short term thread.  While adding revenues [maybe only for a while] from the newly acquired customer base, they also do well at reducing redundant overhead costs.  But this initial low hanging fruit won't produce a sustainable boon to the balance sheet, cash flow or income statement.

Many "acquiring companies" minimize long-term results by following financial or operational paths. They do not assimilate these acquisitions into a unified marketing environment by allowing original sales, marketing and customer service processes to continue as if the newly acquired business was still an independent entity.

Is short term thinking the path of least resistance or does the acquiring company lack a strong marketing culture along with proven sales, marketing, support and business development processes?

Pay Attention to First Impressions

I thought I was interested in helping a prospective new client who could benefit from my "change agent" services in their business development environment.

I should have paid more attention to three negative initial impressions.

For the telephone introduction session, they called 30 minutes later than the scheduled time.  They apologetically told me that an unexpected situation caused them to be late.  I had to reschedule the call because I had another commitment.  A few days later they sent me an email asking to re-reschedule the planning call because of a new unexpected situation.  My antenna went up.  Was this the way they treated their employees as well?

A week later when I walked into their well-adorned lobby, I was greeted by an unfriendly receptionist.  I felt like an invader.

As I was escorted to the conference room, I passed quiet employees who were alone in their cubes and didn't look like they were enjoying their day.

When the managers who could benefit from my services entered the conference room, I sensed a very negative air about them even before the first words were spoken.  The conversation was very superficial and we never got to the heart of the matter after one hour of skirting the issues.

I decided to not follow through with the engagement.

The moral of the story is to pay attention to the environment before you decide to pursue an opportunity.  Maybe it's just one person who is relaying a questionable signal.  But if you find consistency in at least three separate interaction points, something's up.

Subscribers React to Newsletter Themes

It's interesting to see how newsletter themes affect opens and opt out rates for long tenured subscribers.

I continually reinvent my business by adding new services, but for the same target market. Many subscribers who had opened and "clicked through" for earlier themes don't understand how the new concepts apply to them and either don't open the newsletter or opt out.

This analogy evokes the old adage, "we mock what we don't understand".  I hope that's not what they're doing.  Instead, I think it's this world of mass communications that triggers one's first option to quickly delete or opt out if they haven't heard of a new concept.  This places even greater emphasis on the need to find the pace setters and opinion leaders who can influence all the rest.