B2B SaaS Demand Generation is a Myth. Here's Why.

Published on

February 6, 2023

Growth
10 min

B2B SaaS Demand Generation is a Myth. Here's Why.

Table of contents
👋 I hope you enjoy reading this post

If you want my team to help with your SEO & Content, click here.

👋 I hope you enjoy reading this post

If you want my team to help with your eCommerce SEO campaigns, click here.

"Demand Generation” has been gaining popularity in B2B SaaS Marketing for quite some time now.

A quick look at Google Trends reveals that the term reached its peak popularity in 2023 and originated around 20 years ago.

It’s become so much of a buzzword lately, popping up in everyone’s LinkedIn headline, that it’s hard to understand what Demand Generation is or who it is for.

It doesn’t help that every first page article is written by some freelance copywriter who barely understands the topic.

So today we’re going to look at Demand Generation from the trenches.

Get ready to embark on a “voyage” (I’m French after all, right?) to understand whether the concept makes sense and if/how it should be applied.

Hint: As you’ll quickly realize, I’m not too keen on the idea.

TL;DR

This is a lot of me ranting about demand generation. If you want to be spared, here’s the gist of it.

I think demand generation doesn’t exist, and none of the definitions make sense. Demand stems from problems, which cannot be “generated.”

Demand itself cannot be measured, so it’s a bold claim to say you can generate it.

Demand generation is a newer fancier way of describing inbound marketing & brand marketing.

It’s a decent concept because it forces marketers to start with buyers instead of themselves — which is why it works.

Most of my thoughts and some updates are also available in this podcast I recorded in August 2023 :)

What is SaaS Demand Generation?

If you scroll the web, you will find many different SaaS demand generation definitions, usually saying something like this:

  • Demand generation generates new demand on the market
  • Demand generation highlights problems consumers didn’t know they had
  • Demand generation drives demand for a product
  • Demand generation elevates public awareness for a product
  • Demand generation helps a company create a steady stream of marketing qualified leads
  • Demand generation create long-term engagement with a brand or business.

Every demand generation marketer and agency has their own interpretation of SaaS demand generation, but usually it regroups one or multiple aspects listed above.

The CEO who allegedly coined the term (I couldn’t really find anything to back this up) gives this definition:

Demand generation spans the entire buyer’s journey. That includes
both generating revenue from acquiring new customers (market share)
and growing revenue within the installed base (wallet share).

That’s not too compelling.

Let’s dive even deeper down the “definition” rabbit hole.

Analysis of the SaaS Demand Generation Definition

Demand generation is usually opposed to lead generation. The latter associated with companies trying to generate leads at all costs, whatever the quality, while the former would consist of “educating the market” and “letting people come to you through added-value” to generate “leads that drive revenue.”

A look at the top Google results for “demand generation” in 2023 reveals a mix of reinventing the wheel and recycling old stuff in new packages.

This is a definition of SaaS demand generation by Digital Uncovered (a top ranking digital marketing blog):

demand generation
One of the definitions of "demand generation" for SaaS

It doesn’t take a lot of marketing education to know that whoever wrote this doesn’t know much about B2B marketing.

From SaaS businesses providing services to “demand generation is about generating demand,” I’m not sure a lot of thinking went into this piece of content

(This is a great example of what we call regurgitated content — more on that to come).

Another interpretation, by SaaS MQL this time:

demand generation marketing
Another interpretation of "demand generation"

This definition is a little bit more specific: “drive opportunities and revenue from companies that match the ICP.”

I say “a little bit more” because that definition could be applied to anything marketing-related.

Then we’ve got a process.

Unfortunately, that process is very, very generic: “drive traffic, get leads, sell, enjoy.”

At the end of the day, the most complete definition award goes to Wikipedia:

what is demand generation
"demand generation" defined by Wikipedia

Or, in simple words: demand generation is a blurry concept regrouping many marketing strategies, mostly based on inbound marketing principles, to drive brand awareness and customer engagement.

Also, for some reason demand generation seems to include “a structured sales process.” Oh, and also, AIDA, because... it looks cool there?

I won’t be going through more of them — you can spend time going down that rabbit hole if you so wish.

I’ll just stop by saying this: none of the definitions of “demand generation” I could find online felt convincing.

And there's a good reason for it.

Can Demand Be “Generated?”

Let’s go back to basics.

“Demand Generation” has 2 parts:

  • Demand
  • Generation

I’m quite a mastermind, aren’t I? Thank you for attending my TED talk.

Jokes aside, “demand” is pretty easy to define. It’s the fact that people want stuff.

It comes from needs + wants. Combined, they create demand.

(It’s as good a place as any to remind you that demand doesn’t stop at “needs.” The fact that someone needs something doesn’t mean that they’re ready to pay for it — i.e. that they actually “want” it).

Now to the second part.

“Generation.”

I have a problem with the “generation” part. It means “to bring into existence” or “to originate by a process.”

Wait a second.

Can demand be “generated”?

Can it be “brought into existence” or “originated by a process?"

I mean, demand comes from needs + wants. Demand for a solution exists because there is a problem.

We buy something because it fixes something else for us. It can be social validation, baking cookies, or organizing our tech stack — but we’re always trying to solve a problem when we buy.

How can one “generate” demand for something then?

Following the reasoning above, the only way to “create” or “generate” demand is to create problems for people.

I know a very good way to generate problems for people, but it involves less marketing and more problematic social human behavior.

What kind of demand are we talking about?

At this point in the argument, people usually say something like:

“Oh, but I didn’t mean that I generate market demand, I meant generating demand for MY company.”

Hmmm... ok.

Isn’t that what the whole marketing field is supposed to be responsible for? Like, actually bringing a product to the market?

Even then, how is that different from generating leads?

Are we talking about market demand (needs + wants) or are we talking about demand for a brand or product, which starts to look a lot like brand awareness or lead generation?

So is it brand awareness or lead generation?

“No, because we’re focused on driving revenue instead of leads or exposure.”

So is the only difference the fact that you project a different intent to the market when you run your campaigns?

In the end, aren’t we talking about inbound marketing here?

As a reminder, this is inbound marketing as defined by scholars from Clark University:

Inbound marketing is an umbrella term for a strategy, which incorporates a number of marketing channels. The strategy focuses on creating meaningful content to attract prospective customers, potential leads, through sales and marketing campaigns by using different approaches and methods such as digital or non-digital content.
Recently, the term has been used by marketers who focus on organic channels -- such as social media, search engine optimization (SEO), and content marketing -- to describe their roles and responsibilities. Inbound marketing attracts customers through relevant and helpful content. It focuses on earning traffic through methods that do not directly cost money. This is achieved through creating quality content that pulls potential customers in.

How different is it from the general understanding of demand generation?

When you read everywhere that the top “demand generation tactics” listed are “host a podcast,” “create content,” and “build partnerships,” I’m beginning to think that they should just go out and tell you to “do good marketing.”

And no, I’m not kidding:

demand generation vs lead generation
There are just so many different definitions for "demand generation." So, which is it?

Can SaaS Companies Generate Demand ?

Demand is not Schrödinger's cat — It can’t exist and not exist at the same time.

One can come up with an offer, but not force market demand to exist. Demand increases or decreases, but it is out of one’s control.

You can’t force people to have the problems you want to solve — that’s called bad product-market fit.

If you create a product that solves someone’s problem, that means the problem already existed or it wouldn’t need to be solved.

Let's not confuse innovation (offering a newer solution to an old problem) with a new problem.

Nobody wants to create new problems, we just want new, better performing solutions.

If you think about it, new problems don’t come up too often. They do on a granular level (e.g. we didn’t need support for Excel before we had Excel, of course), but the larger problem (education and knowledge transmission) has always existed.

The new solution (a book about Excel) is still a book — there was no innovation.

This is why there are very few companies that actually create categories — but that’s another topic.

To create new demand, one has to engineer a disease and then invent the antidote.

But that’s better suited to big-pharma conspiracy theories than real-world B2B marketing.

How Much Is One “Demand”?

Another issue with the demand gen concept is this: how does one “measure” demand?

This isn’t a particularly new topic — it’s been around forever. But never before has someone claimed to be able to generate demand.

If you say you can generate something, you need to be able to accurately quantify it. Otherwise, how can you know whether it was generated?

You need a strong, repeatable and viable measurement process.

It’s easy to see if demand increases or decreases — if it’s elastic or inelastic.

But how much is “one” demand? What’s the unit? When do we know when demand has been created?

You may start to see the problem.

Marketers will usually answer this question by talking about increased opportunities (i.e. leads, but only the ones that bring in revenue) or increased revenue from X channel.

So it’s not demand you’re generating, right?

If you can only measure demand by the consequence of its existence (leads or revenue), is it reasonable to claim that you can generate it?

Demand Generation vs Demand Capture

It's time we (marketers) admit that we have no control over market demand.

We have no way to influence how much or how little people want something. We have a way to capture that demand, i.e. show people that our solution can fix their problems.

Demand capture is a more realistic term.

Fundamentally, one can capture demand in two ways:

  • With outbound marketing: advertising, email marketing, SMS marketing, cold outreach, etc.
  • With inbound marketing: SEO, content marketing, influencers, social media, etc.

Demand capture is better because it's less company centric.

Instead of trying to trick people into buying what we have to sell (this is what most modern marketing feels like), we shift our focus to showing our solution as a best-fit for them.

We start with our buyers ("what does demand look like and why does it exist?") and move on to our product/service ("what problems does this solve?").

Not the other way around.

Does Demand Generation Work? The Case for Demand Gen After All

But doesn't demand gen actually... work?

“Since I implemented demand generation principles for my company, we grew XXX% and generated $XXXXXXXX in revenue.”

How can I say it’s a bad concept if it really does work?

Let me introduce you to a fun little story that’s not well known in the English-speaking world.

The golden tooth by French author Fontenelle.

A kid in some far-away land is said to have grown a golden tooth, and everyone starts discussing what it means. Only after publishing books and arguments do they verify the golden tooth, only to realize it was fake.
The moral of the story is this: let’s make sure of the facts before discussing the cause.

How does that relate to demand generation?

First, I never miss an opportunity to introduce people to the great world of rational thinking.

Second, we can follow the same principle: when we say “demand gen works,” let’s make sure that what works is actually demand generation, and not something else.

If I exercise every day, eat healthy, sleep well AND drink 2 beers a night, I can’t attribute my muscle gains to drinking 2 beers daily.

The biggest shift companies make when they start applying demand generation principles is quite simple: they start focusing on their buyers.

Because demand generation is all about education, giving value, building awareness, and facilitating discovery, companies have to include buyers in the buying process.

It’s not a mystery that 98% of B2B companies do NOT include buyers in the buying process: they think of themselves first and foremost (super long forms, webinars, “here’s what we do and why we’re so good.”

What works when companies implement demand generation isn’t the fact that they start “generating demand,” it’s the fact that they start thinking about who actually buys from them, and what they want.

And I’m all for that.

Companies also start measuring their efforts differently. They focus on long-term growth instead of short-term tactics.

But here’s the catch: even though all of this is great, it’s still framed as a company-centric thing. Involving the buyer in their marketing is still a “tactic,” a “program.”

It still isn’t the core of their marketing — just a happy accident.

b2b demand generation

The Future of Demand Generation for SaaS Companies: Back to Basics

We’ve seen how demand generation was a marketing move from an agency to market their services — nothing wrong with that.

The term caught on because of its catchiness and freshness. But the more you pull the thread, the more it feels like “same old, same old.”

Nothing new under the sun.

So how do we move on from here?

My opinion is that we can take the most important part, and ditch the fluff.

And the most important part is this: people buy because they have problems. Let’s focus on these to market our products.

People don’t buy because you have the best profile picture or because your design looks super cool. Those things are just nice to have.

People buy because they feel confident that you can solve their problems. Confident that you can help them.

This is true for service providers and products alike.

If my problem is “I need to measure project profitability,” I turn to any piece of software that can help me do that. I don’t care what kind of software it is or what product category it pertains to. I want my pain gone.

This is the biggest paradigm shift companies can make.

Focus on problems.

Not shiny tactics, fancy jargon, or simple ideas explained in complex terms to make people sound smart.

Actual problems.

Build your product to solve them.

Build your marketing to show that you can solve them.

Frequently asked questions about SaaS Demand Generation

What is SaaS Demand Generation?

SaaS Demand Generation is a marketing concept very close to inbound marketing or content marketing. Its definition is vague (read the post!), and it's a really hard concept to prove, but it has made its way into marketing, big time.

What is the difference between brand awareness vs demand generation?

This isn't clear as there is no precise definition of the concept of demand generation. Broadly speaking, I consider demand generation to be the same as inbound/brand marketing.

What are demand generation metrics?

There are no demand generation metrics as demand is unquantifiable. You can only measure the number of visitors you brought to your website through inbound marketing strategies or the number of qualified leads your business had during a period of time but not demand itself. By definition, demand is only measurable by the consequence of its existence (leads/revenue).

Vince Moreau

I'm the CEO & founder of ScaleCrush. You can often find me ranting way too much about BS marketing advice, fluffy and regurgitated content, and calling out gurus. I also happen to have my very own unoriginal thoughts about the stuff we're going through.

Marketing gurus are lying to you. Am I?
Trusted by 1,000+ smart marketers at companies like ClickUp, HockeyStack & Techsmith.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Don't worry - we've got a FREE, ungated playbook that details the exact process we've used to help DOZENS of SaaS companies make their marketing work.

Read the playbook

Learn how to get consistent marketing results with our SaaS Marketing Compass.

A free, ungated guide to understand why your marketing isn't delivering as it should, and fix it.

🧭 Guide me!
Blog

See what other great content we have in store.

Growth

Decoding the SaaS Magic Number & What It Means For Your Business

The magic of the SaaS Magic Number lies in helping you see how much revenue you’re creating for the cost of acquiring new customers with your sales and marketing investments. 
Vince Moreau
28/2/2024
5 min
Growth

Scaling a SaaS Business in 2024 Might Not Be as Easy as It Used to Be. Here’s Why

In 2024, SaaS business owners need to shift their mindset from hasty and short-term scaling methods to more strategic and sustainable ones.
Kristin Myshkin
28/2/2024
8 min
Growth

You May Be Losing Your SaaS Money through Positioning. Here’s Why.

SaaS positioning, or SaaS product positioning, is the position your company chooses on the market. Discover how it can impact your revenue.
Kristin Myshkin
28/2/2024
10 min
Growth

B2B SaaS Demand Generation is a Myth. Here's Why.

Get ready to embark on a “voyage” to understand whether the concept of "demand generation" makes sense, and if/how it should be applied.
Vince Moreau
28/2/2024
10 min
Subscribe
Join our newsletter to stay up to date on features and releases.
Subscribe
By subscribing you agree to with our Privacy Policy and provide consent to receive updates from our company.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.