Online Lead Generation 101 – Demand Generation vs. Demand Fulfillment

Do you know how much Google made during the 12 months trailing 2nd quarter of 2012?

$43 BILLION dollars.

How about did Facebook make?

$4.3 billion dollars. About 10% of what Google made.

So one might conclude, does Google have 10 times Facebook’s traffic?

Nope. They have about the same:

So what the HECK happened.

Same amount of traffic yet only 10% of the revenue?

What’s going on here?

Simple: demand GENERATION  vs. demand FULFILLMENT

 

Que es demand generacion vs. demand fulfillmente?

(Ok, my spanish is rusty.)

What’s the difference, you ask?

Demand generation – People don’t know who you are. They discover who you are (company, product, idea, service, trend, news, organization, etc.).

Demand fulfillment –  People know you you are. They are looking for you.

Thus…

Demand fulfillment cannot precede demand generation because people wouldn’t know what to look for or what search terms to use.

Makes sense, right?

How would you know about solar panels if you’ve never even HEARD of it?

If you’ve never even heard of it.. what would you enter into the input box into a search engine?

Demand generation is awareness, and demand fulfillment is satisfying the demand (for more knowledge).

And of course, if you are aware, there is a HIGHER chance that the visitor has the desire to purchase (assuming the product/service is commercial in nature).

 

 

Certain sites are more on the demand fulfillment side than others..

 

Here’s an excerpt of an interview with Sheryl Sandberg, the CFO for Facebook (src):

Q: You’ve said Facebook’s sweet spot is the top of the marketing funnel–that is, ads that create awareness and consideration of a brand, rather than direct marketing. Is that turning out to be true?
A: It’s demand generation. We’re not really demand fulfillment, when you’ve already figured it out what you’re going to buy–that’s search. We’re demand generation, before you know you want something, before you know you’re interested in something.
Q: Yet it seems like most of Facebook’s ad business is really not branding yet–it’s more direct-response-oriented by advertisers that are looking for a fairly overt result, like getting an email subscription for a daily deal or trying out a social game.
A: I don’t want to confuse wanting a direct response with demand generation. (She walks up to the whiteboard.) Here’s the marketing funnel. Here’s what advertisers would call intent (in the middle of the funnel). So above this is demand generation. And below this is demand fulfillment. Here (at the top of the funnel) is awareness. And then you go all the way down to purchase. What every advertiser is looking for is this (she circles “purchase” in red). The question is, where do you start?

When you see advertisements on Facebook that want a response, I still think they’re demand generation. But they’re trying to get you here (she points to “awareness” at the top of the funnel). In other words, they’re taking you all the way from here (awareness) to here (purchase) in one ad or one experience. They don’t believe you got on the site looking for what they’re selling. When you go to search, you’re “OK, shower curtain. Looking for shower curtain.” You already have intent, I’m going to take you to purchase.

If I saw a shower curtain on our site, no one thinks I’m searching for shower curtains. It’s more that a friend bought a shower curtain. If I see an ad for Sprinkles cupcakes, I’m not looking for dessert. So there’s still demand generation. Demand generation does not mean you don’t want action. It just means you’re starting here. You’re trying to generate awareness.

 

Why Demand Fulfillment = $$$

Where does the demand fulfillment (i.e. search) actually occur?

BINGO… SEARCH ENGINES.

 

This is WHY search engines make EXPONENTIALLY more than media sites because the intent to purchase is WAY better.

Because odds of you deciding to buy on FIRST exposure is fairly small (but remember, repetition can increase your chance of selling).

So if you ARE searching for something, you must’ve had a decent number of exposures that would’ve caused you to search for it.

In another words, social media sites are basically doing ALL the work while Google is reaping ALL the harvest.

 

 

SO WHAT?

Your search leads are more likely to convert to your sales message than social media/display leads.

Sure, higher cost traffic but more likely to opt in to your lead generation marketing campaign.

With this higher cost (i.e. your leads are already prepped), you can go immediately to pricing, testimonials, etc. because they are aware of the benefits.. they already have all the basic information.

So with leads that were generated with non-search traffic, the costs will be LESS but you can’t start automatically with the stuff that’s in the LATTER phase of the sales process.

You have to give them the sales schpiel.

You must answer”What’s In It For Me?” and  tell your Unique Selling Proposition.

Why? Because they haven’t been exposed to your message frequently enough (and if you’ve lost them, there are ways to get your leads to hear you out again)

 

Conclusion

You have to know where your leads are coming from: from demand generation or demand fulfillment to really know what sales angle works best.

taewoo

taewoo

TaeWoo is founder of Solar One Media, a solar lead generation company. With 10+ years of experience in internet marketing, web development, and online advertising, TaeWoo brings his expertise and pioneering spirit to solar lead generation.

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