Frozen, slashed, cut, trimmed, tightened—no matter which word you hear, this is what happens to demand gen budgets in the current economic environment. And this reality is forcing demand gen organizations to rethink the way they operate.
“Our budgets are roughly 75% of what they were in 2022,” reports Kendrick Shuler, Outbound Marketing Manager at Tipalti. “Yet we still have very similar lead goals. We actually increased booking numbers.”
Plenty of demand gen teams are experiencing cuts in areas like media spend, testing and investment in new programs. They also see stronger asks for ROI analyses, particularly for larger spends, and increased scrutiny on the dollars going out the door.
This new normal forces demand gen teams to operate as lean as possible—and the high-performing ones are claiming this opportunity to improve.
“The silver lining is that both we and our clients are being forced to look hard at what we can do better,” says Howard Sewell, President and Co-founder of the Spear Marketing Group. “‘Optimize’ is the term for the day. What can we make more efficient? If we’re not going to spend on new technology and new programs, what can we do better to generate better results?”
When demand gen organizations were flush with resources, we could afford tactics that today might feel reckless and random. Now, with expectations holding steady (or increasing!) while budgets are shrinking, it’s time to hone our approaches.
That’s why we turned to Howard and Kendrick for their insights and experiences. Howard’s agency specializes in demand gen, primarily with B2B technology companies, and he’s been in the agency business himself for 25 years. And Tipalti provides AP procurement and payment automation; Kendrick’s teams sell mainly into finance functions globally—customers and prospects who experience this economic climate as keenly as anyone.
In talking to these two experts, we look at multiple ways to optimize demand gen strategies for a more restricted resource environment—a reality that requires more certain decision-making (and the ability to pivot) ever earlier in the sales cycle. Ultimately, we hear how this leads them to create stronger, more focused approaches to demand gen.
Scrutinize your CRM to shorten the sales cycle
Demand gen organizations don’t just have to produce more with less—they often have to produce more quickly with less, too.
This means that demand gen teams are learning to practice greater scrutiny. They have to find the biggest bang for their bucks—and they can’t always wait 12 or 18 months to see some well-nurtured leads pay off.
This reality has generated what Howard refers to as more sales-oriented tactics. Where can you find the active buyers? How can you accelerate the pipeline? How do we generate revenue in the short term?
“One of the things that we’re preaching as an agency, and that clients are doing more aggressively, is looking at the leads we already have,” he says.
It takes more effort (and more money) to identify buyers who are making decisions in the short term when those buyers have no brand awareness and no relationship with your company. Your CRM database is a curated selection of leads who already have heard of you, because you’ve been nurturing them. It’s a list you can hyper-segment to prioritize where you spend your resources.
“We’re following up with syndicated content leads. We’re refreshing the data and following back up with individuals who came into our system a couple years ago. We’re squeezing out every last drop of juice from our campaigns,” Kendrick says. “It’s making us dig a little deeper, get a little more creative. Ultimately we are evolving as an organization to see through the noise and pick and choose campaigns that will work really well.”
Dig into data to ID a good investment early—and recognize the limitations
Everyone claims that their organization is data-driven. The differentiator, as always, is how an organization uses that data, and how they evolve those uses over time. In today’s economic climate, demand gen has shifted from full-cycle analyses to trying to identify strong ROI early in the cycle.
Howard again points to the increasingly short-term nature of demand gen goals, and how it creates challenges for assessing them. “If you’re generating a lead today that isn’t going to close for 6, 12, 18 months, at what point in the cycle do you say Wow, that was a good investment?” he says.
“It’s going to be very difficult to measure anything right now on down funnel metrics because you’ll be waiting a good long time before those numbers come to the fore,” he adds. “It’s a tough chore, when people are taking their sweet time to make purchase decisions.”
Some of the short-term metrics demand gen teams are using include lead-to-op conversion rates, total ops, total bookings and engagement with Sales. Yet these metrics, while certainly insightful and beneficial, provide an imperfect look at how the data will look after a full long-term sales cycle.
“These aren’t the full picture,” Kendrick says. “You can influence ROIs. You can influence ops to close. LinkedIn and Facebook bring in leads, but they don’t often close leads because they’re so top of funnel. But we’re still looking at these key metrics and analyzing our programs based off them.”
Reimagine short-term KPIs as assessment opportunities
Since short-term demand gen goals are an imperfect predictor, we wondered: what KPIs are most helpful to today’s demand gen orgs? Are there ones that teams are paying more or different attention to than they did in the past?
“I know there’s a school of thought that the MQL is dead,” Howard says, “and that we’re also supposed to be looking at opportunities and pipeline now, but we work with some very large clients for whom the MQL is very much alive. Especially in this climate, it’s a metric that still has significance as a leading indicator for how a particular program or message or ad test is performing.”
Leads are converting at a much lower rate and a much slower rate than they were even just a year or two ago, Howard adds. This is why so many leaders focus on those short-term stats like total ops and total bookings—which Kendrick identifies as the ones management tends to care about most, alongside ROI.
“But when I’m trying to improve my programs,” he says, “the KPI I care about is where is the biggest room for growth.”
Put differently: he identifies the biggest weaknesses in a campaign, and how he can help improve them.
For example: the sales cycle duration is just too long on syndicated content to see a genuine ROI. So Kendrick’s team is working on nurturing those leads across different channels, educating the Sales team on what exactly those leads do in order to enter the system (in order to improve their follow-up) and providing the Sales team with tips from their vendors.
Rethinking KPIs to create a more optimized demand gen function is itself one such growth opportunity. It’s an edge where such edges are precious: the stark truth is that there is no magical KPI for demand gen orgs, when ROI is ultimately where it’s at.
“It’s a struggle in any kind of attribution model to prove ROI in a very short-term window,” Howard says, “because those leads just aren’t going to convert.”
Final thoughts: Test everything, collaborate with everyone
Demand gen as a whole is in largely uncharted space. Reduced budgets, combined with longer sales cycles, would challenge even the hardiest among us. But rather than this climate forcing us to do without—these experts take the view that these restrictions allow us to do more with what we’ve got.
Howard’s advice: Test everything.
“What we’re all going through is an opportunity to take a close look at all the programs and content and ads we’re running and figure out how to make them better,” he says.
“Every LinkedIn ad and every Facebook ad should be a test. Every subject line should be a test. I would look at the nurture programs. What can we do to better segment those? Are they working? Are they pulling people through the cycle? Those leads that you have in your database were paid for long ago. So make them pay and do what you can to move them along the journey. So, I think there’s a lot of opportunities to be had, things you can do to get through this.”
Plus, we’re not in this alone. Kendrick’s advice: Collaborate with everyone.
“We’re really trying to integrate our Sales and Marketing departments, make sure we’re collaborating as much as possible,” he says. “We want to make sure that what we’re doing is working for the Sales team because that’s the ultimate goal. And they’ll be the first ones to tell us if a program is not working. They’ll scream it from the rooftops. So make sure just to talk with them and know what they are saying about your programs.”
Because, in the end? As Kendrick says: “We’re all focused on one central goal.”