Key Challenges in SaaS Demand Generation

Over the years, Demand Generation has evolved to become a vital element of SaaS businesses. Right from identifying the marketing channels to realizing recurring revenue, the impact of Demand Gen is shaping up the modern sales and marketing practices. With the abundance of raw data, SaaS companies have become laser focussed on whom to target, how to target, and at what time you need to initiate the sales activity.

In this post, I’ll be sharing some thoughts from my experiences on how an end-to-end Demand Gen engine is built, some fundamentals, and common challenges that Demand Gen teams face. Before getting in-depth, let’s look at the high level responsibilities of a B2B SaaS Demand Gen team.

Lead generation
-Build & optimize quality lead generation channels
-Pipeline acceleration
-Content distribution and optimization

Operations and analytics
-Sales and marketing ops
-Reporting and Dashboarding

Cross-functional collaboration
-Demand <> Sales: Building lead gen programs
-Demand <> Product Marketing: Mapping the right content to the right audience

Now, let’s get onto the fundamentals.

The sales and marketing funnel

A sales and marketing funnel can be split into 3 on a high-level.

Top of the Funnel (ToFu) – Creating awareness about the problem
Middle of the Funnel (MoFu) – Educating the prospects about the solution
Bottom of the Funnel (BoFu) – Convincing why your product offering is the best for the prospect’s use-case

In order to understand Demand Gen activities, we need to expand the funnel and take a look at the movement of leads at each stage. Here’s an expanded view of a typical funnel.

SaaS Demand Gen Funnel

Let’s take a look at each of the phases, how the Demand Gen operates, and what are some of the common challenges.

The awareness creator – ToFu

The top of the funnel is filled with leads that the Demand Gen team acquire from multiple marketing channels. ToFu is all about creating awareness about the problem. This is done through various types of content and distribution channels. Over time, as the web traffic increases, a %age of the web traffic starts converting into leads.

What are the types of leads you generate in the ToFu?
1. An ideal website visitor would have read your content, browsed through your website, and directly signed up for your product in the trial or free plan. Now, this is straightforward behavior and these leads have the potential to get moved to a sales sequence which would in turn result in successive stage movements.

2. The website visitor would have read your content, subscribed to your newsletter/blog, or downloaded a gated piece using their name and email addresses. These leads are not yet sales-ready and they get parked in the ToFu for further Nurture.

Key Challenges
Lead attribution from unknown sources i.e. the sources that are not identified by Google Analytics.

Returning visitor information across the website. This is not from a SEM perspective, but for identifying the pattern between recurring visitors, and their most frequently visited pages.

– Understanding the exact navigational journey of web visitors. What’s the content 1, 2, 3,…. Etc are they visiting. Which journey is generating maximum leads.

The educator – MoFu

The leads from ToFu move through a sales sequence and then the qualified leads move to the MoFu. The rest of the leads move to nurturing or get unqualified. Similarly, the qualified leads from outbound activities get added to the MoFu.

Qualified leads start turning warm/hot post the sales activities and from this point on the Demand Gen and sales team requires more context. For this, teams leverage multiple sales enablement/engagement, and lead intelligence tools to know about their prospect’s usage patterns and behavior on the website and within the product.

MoFu is a crucial stage as this is where most leads tend to spend the longest time within the funnel. The pre-sales team gets on multiple calls with the prospects to gather the requirements and solution the product for different use cases.

As the company moves upmarket, the processes and discussions start getting complicated. Owing to all these reasons, MoFu is the stage where the Demand Gen team focuses more on accelerating the pipeline.

Triggers that help the Demand Gen/sales team take definitive action in MoFu
-Web visits
-MoFu content engagement
-Product usage
-Support ticket activity
-Social activity

Key Challenges
Data consolidation: Unlike ToFu which depends on website visits and website content engagement, the MoFu stage depends more on the lead’s engagement across all possible areas that are related to your product/service. Although the Demand Gen team might use a lot of tools to solve specific use-cases, it’s a big challenge to consolidate everything into a single place and map a prospect’s journey. The Demand Gen has hit a treasure trove if they are able to achieve this at scale with automation.

The flow of information between Demand Gen and sales: It’s easier said than done. With the sales unit fully focussed on closing deals and the Demand Gen unit trying to fill the top of the funnel and accelerate the leads, the MoFu feedback loop between the demand and sales is kind of a gray area that many organizations are trying to figure out. While they achieve a level of automation with CRM systems, reaching a tighter loop with a free flow of information is still a challenge.

Real-time analytics: While there are analytics frameworks set up for the most obvious areas, in-depth activity analytics on the MoFu is arduous. Knowing the no. of touchpoints, the usage patterns, the web visits, in real-time would be a high benefit in qualifying and moving the leads through the pipeline.

– Mapping the right content to the right audience: Instead of targeting a MoFu lead with all the MoFu content, for higher efficiency, it’s best to get more context on their journey, behaviour, and pitch the right content at the right time. Higher the customization, the more the interest from the lead. This will be of great use in ABM/Outbound campaigns.

The buying decision – BoFu

This is the end stage where the sale happens. The velocity at which leads move from ToFu to BoFu depends on the business and the market that you are selling to. It’s evident that optimizing the ToFu and MoFu would result in higher deal closures within a shorter time interval.

Handling this stage is straightforward as the sales team would be exactly knowing the lead’s requirement, budget, and the level of sales-readiness. Depending on this information, the leads will be targeted with BoFu content until the sale is closed.

But, there are probabilities for a lead in BoFu or any other stages to get cold. That’s where the Nurturing activities come in.

Nurturing

The Nurturing stage handles huge volumes as leads across the funnel can go cold at any point in time. All the leads move to the nurturing stage where segmented activities are run to warm up the leads.

Nurturing is a continuous activity that the Demand Gen team handles. It’s not just setting remarketing or sending out weekly emailers. A Demand Gen team needs to give equal importance to nurture leads in order to feed the pipeline with more and more hot leads. There are chances for a lead from 6 months back or one year back to turn warm and bounce back into the active funnel.

Key Challenges
Context: The higher the context, the higher the level of segmentation. With deeper segmentation, you have the leverage to customize and bombard the lead with relevant content. It’s difficult to get context from the siloed data spread out across different tools today. As mentioned in the previous sections, data consolidation is definitely a big challenge in the modern sales/marketing stack.

Handoff and prioritisation: As mentioned earlier, equal importance should be given by the sales teams in handling the nurture leads. As the Demand Gen team keeps qualifying and warming up the leads, a smooth, timely handoff should happen between the demand and sales teams. With incorrect timing, there are high chances for the just-turned-warm lead to becoming cold. This is a function-level challenge that most teams are facing.

The role of data in the future of Demand Generation

Most of the challenges discussed in the above sections are nothing new to the Demand Gen unit. The invariable answer to the majority of the challenges today is data access and consolidation. The quicker you’re able to get access and consolidate, the faster the rate of optimization. Going the data-driven way, supported by robust processes, and sales-marketing collaboration would help scale any Demand Gen team and realize growth.

In recent years, we are seeing a lot of startups sprouting to solve these challenges. While the answer sounds simple, it’s an arduous task to build products and get them out in the market. With powerful AI and ML technologies, we are going through an exciting transformation in the MarTech space.

The future is data. And, to enable this future, each org needs to start developing a data culture. If you’ve not yet given this a thought, then, I believe this is the right time.