What is a Demand Generation System?

Last year Laura Ramos, the B2B Marketing guru at Forrester, stated that the lead management automation market was confusing. There are many players, and many sub-categories. Demand Generation is probably the most confusing, it can mean two things:

  • Software or services that get you in touch with new prospects so you can fill your database; this could be Search Engine Optimization (Hubspot), telesales (Phone Works) or contact databases (Demandbase, Jigsaw)
  • But it can also mean: software that automates the lead management process once leads have arrived on your website, or are already in your database (Eloqua, Marketo, Market2Lead, etc.)

If I understand it correctly, Laura uses the first definition, while Eloqua – the leading lead management automation firm – often uses the second definition. Also, David Raab publishes the Guide to Demand Generation Systems, covering Eloqua, Vtrenz, Marketo, Manticore Technology and Market2Lead, which clearly fall within the second definition.

I must side with Laura: Eloqua and similar systems do not generate demand, they primarily manage leads (in a very elaborate way though :- )

So my suggestion: replace all instances of Demand Generation System with Lead Management System!

Does that makes sense or not?

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17 thoughts on “What is a Demand Generation System?

  1. Ian Gilyeat

    Does this make sense? Not really. If Laura is using these two definitions to help sort out the lead management automation market, then definition two is much more fitting. If she is using them to sort out demand generation, then you might consider that a simple inquiry does not always mean new demand. If that inquiry can be nurtured in an automated fashion in order to create demand, then Eloqua and others automate lead management and create demand.

    Demand creation is not always applied to the generic market. Demand creation can also be applied to inquiries, leads, active customers and dormant customers. I think the point is to use your automated processes to move the customer to the point of purchasing your product or service. If you are moving the customer forward then you are creating demand. Automating this process means you are automating demand creation and the lead management activity can be a subset of that effort.

  2. Mike Volpe - HubSpot

    You’re right – it makes sense to me.

    I am always surprised when a marketer’s only demand generation strategy is to automate a bunch of emails to their existing database. At some point, any list gets burned out, and that includes your house list. I think the rule of thumb is that 25% of your list expires per year. So that means you need to be growing your database by 25% per year just to maintain it, and most companies actually want to grow. Systems like Eloqua, Marketo, Vtrenz and Manticore don’t do anything to help you grow your list, so their is a piece missing.

    I’m clearly biased, but in addition to lead nurturing, I think everyone needs a cost effective strategy to attract more leads to their company. I have seen that companies who have implemented a strong inbound marketing program (social media, search engine optimization, blogging/content and landing pages) to attract leads have a 3 to 5 times lower cost per lead from those programs.

    And adding all those inbound leads to your lead nurturing system makes that more effective too… so it’s a win-win.

  3. Darryl Praill

    Totally agree. I’ve had this discussion with others. The marketing automation solutions do not generate demand, they score it, they nurture it and ultimately it can become a lead. Hence, they do Lead Management. “Demand” is not the same as a “Lead”. Finally – Marketers create demand; software and services are merely used to execute the programs defined by those Marketers.

  4. David Raab

    The label is less important than a clear definition.

    That said, “lead management” is much too narrow, because even a simple outbound email isn’t actually managing a lead. Demand generation systems take inputs from many different lead / customer sources; what’s implied by the term is having a central SYSTEM to coordinate the PROCESS of acquiring and handling leads across channels. This could incorporate many activities such as PPC campaigns, call centers, trade shows, Webinars, etc. Some of the demand gen systems do handle these, and others are expanding their scope.

    In some cosmic sense, many marketing activities have something to do with demand generation, so including them all would make the term so broad that it is basically useless.

    And, on a practical note, is an existing category of “lead management” systems that focus very narrowly on assigning leads to sales and tracking their results. You wouldn’t want to confuse that perfectly good term with a new, much vaguer category.

  5. Joseph Manna, Infusionsoft

    I agree and enjoy the dicussion in the comments here. I believe “demand generation” is one aspect of lead management. I have the thought that in order for a learn to attract to a company, they must already have a demand.

    There are many facets of lead management, including nurturing, scoring, warming, opportunity management and follow-up marketing.

    I suspect people already have demands, it’s a matter of managing it, not generating it, in my opinion. ;-)


  6. Kevin Joyce

    Let’s try some definitions:
    From a Sales perspective “Demand” can come from net new leads OR it can come from installed base accounts.

    Lead management is the scoring, nurturing, and routing of leads.

    Lead generation is the mechanism that captures a name to put it into your database.

    Awareness building works in concert with lead generation programs (is SEO awareness building and your website offers and forms the lead generation source?)

    Demand generation = awareness building + lead generation + lead management + loyalty marketing
    q.e.d. (tongue in cheek)

    Marketing Automation systems such as Market2Lead and Eloqua do participate in lead generation, lead management, and loyalty marketng.

    They also do campaign management, some amount of asset management, web analytics, and marketing business intelligence so putting them in just the lead management box is too narrow a definition.


  7. Fred Yee

    We’ve been in this awhile, and if anything it’s gotten more confusing as customer needs have evolved. We believe ActiveConversion to be in Lead GMC. We generate, manage and convert leads.

    Some systems do more managing and nurturing of leads. I think some of the more well known fall in that category. At ActiveConversion, we believe that we help generate demand as well. Our integration with companies such as Vertical Response, Constant Contact and Jigsaw help with the demand generation, so perhaps we feel much stronger about this.

    We also have features that play to search engine optimization, which is in itself does not generate demand, but certainly counts as demand, as they more often than not are even stronger new leads.

    There is a triangular diagram at themarketingmojo.com that tries to slot the various types of solution, including their target market that tries to define this. The diagram itself is not accurate, but it does a good job of trying to slot various attributes, so that you can see the differences. This helps with the definition, although not the answers.

    We’re not all equal, but neither are the requirements from customers. One thing is for sure, B2B marketing has changed forever.


  8. Adam Needles

    The problem above is one of a functional definition versus a business-process definition.

    I’m increasingly of the opinion that ‘demand generation’ is simply what marketers do (a business-process definition). This is something I posted a blog piece about on Friday, and I’ve got some good quotes from others in the industry that support this point-of-view.


    That having been said, I think there is a bigger set of problems with ALL of the categories used to describe this space. Because next-generation systems that do complex management of dialogue and customer nuturing and that integrate marketing communication execution and feedback/analysis/ROI are … just that … complex … so marketing technology vendors have jumped on to easy-to-understand labels, such as ‘lead generation.’ Who doesn’t want leads? I get it. The problem is that this type of narrow functional definition may shortchange the capabilities of the system.

    I don’t think that the answer to what you propose is an either/or, nor should it be treated lightly. There is no quick fix to what is widespread mis-labeling of marketing technology solutions. Rather, I’d like to see Laura and others develop more-intuitive taxonomies that find a balance between process and functional definitions to help marketers decode. I know this is something that David Raab is giving some thought to, and it’s something I’ve been working on, as well.

    I’ve recently proposed a designation of the space great firms like Eloqua and Market2Lead occupy as the ‘integrated marketing management’ platform segment — signaling the role they play not only in managing the nuturing process (traditional demand gen) but also in delivering complex integration of dialogue and marketing activities. But I also put guys like Neolane and Unica in that segment. The lines are rapidly blurring. I’m working to define the sub-sets of this space so that I can be more granular on where the different functional components sit, but it’s worth thinking about where these elements fit into the bigger picture, first, and connect the dots between low-level customer data/tactical MARCOM and high-level strategic management. This is the POV the CMO needs to justify budget for these technology platforms.

    Good dialogue, everyone. Appreciate the POVs. Thanks, Jep for teeing this up. Can we do this as a panel? Would be spirited!

  9. Steven Woods

    This is a great discussion, thanks Jep for starting it off. The one thing that I find inspiring is that there is absolute agreement that “Demand” is not a name we pass off to sales. “Demand” is a person who has a business need to purchase something you offer, is aware of your products or services, and is ready for a conversation with sales.

    The process of generating that demand has a number of components; some are the raw contacts, some are the processes that nurture and score the leads until they are ready, and identified as ready, for sales.

    It’s great to see the debate on the naming of the space because it heralds a recognition that any marketer who wants to be successful needs to think in terms of the buyer’s buying process, rather than in terms of the number of raw names to pass to sales.

    Thanks all for some great discussion. Adam, I would agree that a panel discussion would be a lot of fun.

    Steve Woods, Eloqua

  10. jepc Post author

    Thanks to all of you for these insightful comments. I expected some discussion, but not this much. Very interesting.

    What I take away from this discussion is that ‘Demand Generation’ is the process of generating demand for your products, done by marketers, not systems. This could range from adding people to your database to nurturing contacts: anything you do to get people interested in your offering, until they are sales-ready.

    However, Lead management (automation) seems to focus more specifically on the products like Eloqua and Marketo.

    How can we classify companies that use social media, SEO, blogging and marketing analytics to add new leads to their database? Company examples are Hubspot and Demandbase. Should we call this Inbound Marketing?

    I’ll leave it to the experts to come up with a better taxonomy. But it’s all relative: the vendors will use the buzz-word of the day anyhow, regardless of taxonomy :- )

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