How many demand generation programs should a company employ? As many as they can.
The optimal demand generation mix is hinged on your average customer value.
In the early days of Amazon, Jeff Bezos gave his staff a clear metric for demand generation. They could buy as many new customers as they wanted provided the acquisition cost was $33 each or less.
Bezos did the math, and determined the lifetime value of a customer was over $33. Any strategy that could bring in a customer for less than that was acceptable and should be implemented.
Bezos didn’t care which demand generation strategy a marketer used to acquire a new customer. He focused on implementing every strategy that was profitable.
100 ways to generate 1 customer
It’s easy to get caught looking for one or two powerful marketing engines, but that’s very limiting.
Jeff Bezos has the right approach to demand generation. There aren’t any silver bullets, so use everything that works.
I found myself telling a client recently, “I don’t know 1 way to generate 100 clients, but I can think of 100 ways to generate 1 client. Let’s use every option that’s profitable.”
Implement as many profitable demand generation programs as you can handle.
Add new demand generation programs annually
Examine your demand generation mix:
- How many programs are you running today? Search, events, PR, pay-per-click advertising, social media, and so on.
- Which activities generate new clients for less than the lifetime customer value? Keep those. Everything else can be eliminated.
- How can you make the profitable programs more efficient? Can they be automated or institutionalized to free up time to develop new programs?
The goal is to create space to implement new demand generation programs annually. It’s a constant process of evaluation, optimization and rejuvenation.
There’s always a new strategy, technology or idea to try. By adjusting your mix you can keep finding new ways to keep your sales funnel full.
A portfolio strategy
Consider your approach to demand generation like an investment strategy—employ a portfolio strategy.
Invest in as many programs as you can manage. As long as an activity profitably delivers clients, it’s a good program.