Understanding Demand Creation and Demand Capture

You can spend your way to brand awareness, but not demand creation. A simplified breakdown of the two 👇 TL;DR - you can spend your way to brand awareness, but not demand creation Brand Awareness - Messaging: high-level with a focus on answering what you do and/or a memorable tagline - POV/differentiation: NO strong POV/differentiation statement - Audience: total addressable market (broad + large) - Timeline: "always on" - Measuring success: brand recognition + brand recall Demand Creation - Messaging: high-level with a focus on answering what you solve for - POV/differentiation: VERY strong POV/differentiation statement - Audience: ICP (smaller + specific) - Timeline: constrained by success measurements (next point) - Measuring success: pipeline + revenue Real-world example: Monday.com Remember the past few years when it seemed like every time you went to watch a video on YouTube, you first saw an ad for Monday.com? I do 🙋♂️ I can tell you exactly what they do (project management software) ...but I can't tell you how they're different from all of the other competitors in their space (Asana, Trello, Basecamp, etc.) Their ads were very successful in that they got my attention + communicated what they do, but they never convinced me WHY they are the only option I should go with, what they provide that's different from their competitors in making their customers more successful, or added any value to me that positions them as THE experts in this space If I got a survey from YouTube or a third-party firm asking if I had heard of Monday.com, the answer would be a resounding yes BUT if they asked if I considered buying their software in the next 12 months, the answer would be no Why? Because they didn't *create* any demand - They didn't give me a sense of urgency around what I'm missing out on by not using them - I didn't receive any compelling feeling that they are THE project management platform I should use - They didn't educate or provide me with any value with insights that they uniquely know as experts in the space Long story short, they didn't break out of the commodity bucket - they're simply another option Creating demand means: - Communicating a unique POV about your category + why you're the only option - Sharing data + insights around how customers have seen success, along with actionable takeaways others can do to improve even if they don't use your product (aka show they understand the problem, their market, and are invested in their customers' success) - Constraining your measurement timeline to understand if the marketing efforts you make today are driving noticeable increases to your pipeline + revenue numbers after a few quarters (and if it isn't, it's not creating demand + you need to go back to the drawing board) - - - - - - - - - - Justin Norris and I geeked out on demand creation, getting exec buy-in, and more on a recent episode of his podcast RevOps FM + was one of my favorites to date. 100% worth a listen.

Your messaging to create demand IS DIFFERENT than your messaging to capture demand. Here is how to think about the difference. ↳ And how to craft messaging for each. (using Fletch’s value prop model) 1️⃣ 𝗠𝗲𝘀𝘀𝗮𝗴𝗲𝘀 𝗳𝗼𝗿 𝗖𝗿𝗲𝗮𝘁𝗶𝗻𝗴 𝗗𝗲𝗺𝗮𝗻𝗱 (ie. demand generation) 99% of your market is not actively shopping for your product. So explaining your product’s value to this audience in your top-of-funnel marketing won’t be effective. Instead, you should be messaging around the activities this “non-shopping” audience is doing (ie. use cases) AND spotlighting problems they are experiencing. Using the framework, here are what the messaging elements look like for Calendly: 🟤 Use Case → Scheduling meetings This is the activity supported by Calendly’s product. If the audience isn’t doing this activity, then they are completely outside of your market — and you should ignore them. ⚫ Competitive Alternative → Sending back and forth emails This is how non-Calendly users are currently carrying out the use case. 🔴 Problem of the Alternative → This is annoying and time-consuming This is the pain point of doing things in this alternative way. To apply these messaging elements, you’ll translate the core ideas into copy that lives in your marketing assets. (social posts, blogs, ads, webinars, podcasts, etc.) Here is what the hook of an ad or post might look like: “Here’s how much time you’re wasting coordinating meetings over email…” ——— 2️⃣ 𝗠𝗲𝘀𝘀𝗮𝗴𝗲𝘀 𝗳𝗼𝗿 𝗖𝗮𝗽𝘁𝘂𝗿𝗶𝗻𝗴 𝗗𝗲𝗺𝗮𝗻𝗱 Assuming you’ve created awareness of the problem your product solves, you can then message around the value of your product. But remember, you’re just trying to get them to take a closer look — not convince them to buy the product. To do this, you should be clear about the unique capabilities of your product and the expected benefit they would get. Here are what the messaging elements look like for Calendly: 🟠 Capability - Send a single link to schedule meetings This is the new unlock for prospective buyers. It tells them what they would be doing differently compared to the alternative. 🟢 Feature - Booking link  This is what powers the main capability and is usually applied as supporting context to help a user understand how the product works. 🔵 Benefit - eliminate the back-and-forth emails This is the positive outcome of using the capability + feature. It’s usually the elimination or reduction of the product. In most cases, you’ll translate these elements into different marketing assets (Home pages, landing pages, sales deck, partner enablement materials) — These are your demand capture assets. ——— Remember, your market has different levels of awareness about your product and the problem you solve. You can’t message the same way to create and capture demand. 📨 Demand 𝗖𝗥𝗘𝗔𝗧𝗜𝗢𝗡 messages spotlight the problem. 🪤 Demand 𝗖𝗔𝗣𝗧𝗨𝗥𝗘 messages spotlight your solution. #productmarketing #demandgeneration

𝐋𝐢𝐞𝐬 𝐌𝐲 𝐁2𝐁 𝐌𝐚𝐫𝐤𝐞𝐭𝐢𝐧𝐠 𝐄𝐱𝐩𝐞𝐫𝐢𝐞𝐧𝐜𝐞 𝐓𝐨𝐥𝐝 𝐌𝐞 #2 𝐋𝐢𝐞: Marketing Creates Demand 𝐓𝐫𝐮𝐭𝐡: Marketing captures and redirects existing demand, often among buyers who have known your brand and evaluated you in other roles and companies before. A marketing campaign is never going to cause a company to have a need. It may help them realize that need and understand how and why to address it. If it does the latter, the buying cycle will likely require the turnover of a fiscal year for purchase. But, most purchases are in existing categories, so marketing is really influencing share of market, not size of market. 𝐑𝐞𝐩𝐨𝐫𝐭: The Lead-Based Approach Has Failed Us -- Explains why it has failed us using data, recommends what to do next. https://lnkd.in/gjiGmdpc 𝐑𝐞𝐩𝐨𝐫𝐭: Buyers Are Not Blank Slates -- Shows how we know that buyers are experienced, know your brand and need a different kind of information from you than what you are providing. https://lnkd.in/g-Dkcxmu #b2b #b2bmarketing #MQLIndustrialComplex

I remember the exact moment I realized that most of what I'd learned at HBS, McKinsey, & in all the startup books + blogs was kinda irrelevant: I had been struggling to find product-market fit for 2 years. Did all the things you're "supposed" to do to launch a startup - customer interviews, demand validation, doing the unscalable, prototypes, pilot agreements, you name it. Did all the right things, built the "right" product, but the market just didn't seem to pull. Sound familiar? I then heard this quote that changed how I thought about startups and business generally: “Anybody who does product design has to switch between looking at the world from two different perspectives. The first perspective is what we call Supply… all about what we make, what we build, what we put out there… And the other side is called the Demand side. The Demand side is all about what you can’t control. This is about what’s going on for the customer in their life. We don’t get to decide what’s happening to the customer, what they’re trying to do, what they value… those are all things that are out there in the real world. As modern, informed product designers, we try to be very user-centric. We like to think that we’re sitting in the demand box, trying to figure out what to build on the supply side. But it turns out that in reality, a lot of the things we think are demand really aren’t.” (Listen to the full 18-minute podcast by Ryan Singer and Chris Spiek for an example that adds color to the concept, link below.) This was the point that I realized that everything I’d done and learned was on the supply side - the things I controlled: Our product, our customer research as it relates to our product, our marketing & sales. And when I thought I’d understood what customers wanted, I was REALLY looking through the supply lens - what their problems were as they related to my product idea, not what they were actually trying to do. I’m now obsessed with demand, and am blown away by how little it is understood and discussed. → Understanding demand is the ONLY way to “build something people want” & find PMF → The main problem startups have is that they obsess over supply, but THINK they are focused on demand → When you focus on demand, you can get to a product the market pulls (oddly, the path to building a great product ISN’T by focusing on product) → Successful founders often have an intuitive sense for demand, but can’t explicitly describe it → Demand is the foundation of “jobs to be done” - a wildly powerful concept that most people think they understand, but actually don't → Many problems in modern businesses are due to designing the organization around Supply (what we do), not Demand (what the customer wants to accomplish) Ultimately, what I’m building with PMF Camp is really about helping founders find demand - which makes everything else downstream easier and intuitive. Demand rules all. The most important (& totally ignored) business concept. More to come…

𝗛𝗼𝘄 𝘁𝗼 𝗠𝗲𝗮𝘀𝘂𝗿𝗲 𝗶𝗳 𝗬𝗼𝘂'𝗿𝗲 "𝗖𝗿𝗲𝗮𝘁𝗶𝗻𝗴 𝗗𝗲𝗺𝗮𝗻𝗱" A popular delusion is that marketers can "create demand" and convince people who do not otherwise have an urgent high-value need and aren't currently in-market to come in-market now and buy. That you can directly move someone from not in-market to in-market with sufficiently persuasive marketing rather than merely capturing that demand as buyers bring themselves in-market at their own pace. If this is possible, there's a VERY SIMPLE way to measure this effect of "demand creation"! -- Let's start with a basic idea – not everyone is in-market all the time; a concept is embodied in "The 95:5 Rule," which says that only about 5% of your potential buyers are on the market at any given time. The actual value ranges from ~2% to ~7%, depending on your specific product category. The 95:5 Rule implies that people come in and out of market at a natural fixed rate of flow. That there are stable underlying processes that are pushing people in-market and only a given fraction are naturally in-market at any given time. This implies that the coming in-market is primarily driven by internal factors arising within organizations or buyers, not external factors like marketing. -- For example, what's the rate at which you buy toothpaste? It's determined by how many times a week you brush your teeth. Can a random TV ad (external factor) suddenly make you start buying toothpaste ten times as often? NO! Maybe if you suddenly decided to start brushing your teeth 20 times a day (an internal driver), but no marketing ad is likely to induce that sort of long-term behavioral change. Buying a CRM or Accounting software is no different. You only need a new one every so often, typically driven by purely internal changes inside the business. -- But if you're convinced that you're actually "creating demand," here's exactly how to prove it. The 95:5 Rule defines the "natural rate of buying" which can be measured as the "average inter-purchase period." This can also be calculated from your product category's average industry-wide churn rate. So here's the question – are you: 1.  Actually "creating demand" and getting people to buy now who are not currently in-market?     2. Or simply capturing demand as people naturally come in-market of their own accord at their own pace? -- If you're actually pushing people in-market at a much faster pace than they would naturally come in-market on their own, the inter-purchase period for YOUR buyers should be dramatically less than the industry benchmarks. For example, if you sell a CRM, the average inter-purchase period for the category is ~5 years. If you can show that ALL of your customers bought an average of just 𝘀𝗶𝘅 𝗺𝗼𝗻𝘁𝗵𝘀 after installing their last CRM, then you could make a good case that you're "creating demand" by bringing customers in-market significantly faster than they would have done so on their own due to internal needs.

"Startups can't afford to create demand" You probably already know that: → Only 5% of your market are active buyers. → The rest, a whopping 95%, are passive. What you probably don't know is that: → 80-90% of B2B buyers already have a consideration list of 3-5 potential vendors before starting the research process. → 90% of them end up buying from one of the vendors on their initial list. The problem? Your startup is most likely not on those lists. Then, you face a tough, bloody battle at the funnel's end: → High CAC → Discounts → Burned-out reps → Spammed buyers → Competing on features It's a losing game & deadly for startups in saturated markets. Most companies focus on capturing EXISTING demand: (chasing the 5% active buyers.) - Rely on capturing existing demand - Use cold outreach, SEM and intent data. But, the true upside lies in marketing to the passive 95%. ENGAGE and NURTURE potential buyers earlier in the sales cycle. Before they become active buyers. To create: 1. Awareness 2. Differentiation 3. Thought leadership 4. Product consideration 5. Independent buying journeys Because If you wait until they're in "buy mode", you've probably already lost. So yeah... people say startups can't afford to create demand. I say they can't afford not to.