Why Are We Seeing Diminishing Returns from Demand Gen?

Remember Groupon? Remember how getting $40 worth of sushi for $20 was the greatest thing ever? Now, you don’t even bat an eye when they try to offer you a $1M home for $100 bucks. Why? Because marketers ruin everything.

I love that bit by Gary Vaynerchuck. And it’s true.

Though you probably don’t sell sushi or homes, you may still be experiencing something similar – diminishing returns from demand gen.

I sat down with Jon Miller, CEO of Engagio and asked him his thoughts about why this is happening, and why more organizations are turning to ABM.

Here’s Jon.

(Watch on YouTube)


Brandon: Hey demand gen leaders out there, Brandon Redlinger here with Jon Miller We’ve been talking to you a lot more recently and something that we’ve been noticing is diminishing returns on some of your demand gen efforts, so Jon why do you think that is and how can demand gen leaders move forward?

Jon Yeah I think here we’re talking about kind of what I would call traditional demand gen tactics your classic your running campaign, whether its a webinar content syndication or ebook or something you get leads and then you run them through the system.

Brandon: This is what a marketer demand markers have been doing for the last…

Jon: Yeah exactly that’s why we kind of built Marketo.

But there’s a couple reasons why We’re kind of hitting the limits of what you can do The first is in some cases people are looking for ways to grow faster and do more. And the problem with traditional demand gen is it doesn’t scale linearly right if you if double the number of webinars you do you don’t necessarily double the number of leads you generate, and so you get this declining marginal return from the incremental spend.

Which is true of almost every marketing tactic right and you double spend doesn’t get double the results. And so that’s part of reason people are looking to other other channel tactics like ABM because they want to grow faster you can’t just do more of the same you need to do new things so that’s one reason just it just doesn’t scale linearly. I think another factor that’s going on is its related to content shock, right but its just gosh there’s just so much demand gen going on you can only attend so many webinars or you’re only going to read so many ebooks.

And I think, we probably hit peak content and I think people are realizing is just damn trying to cram more down that same.

Doesn’t work. I think three, a lot of companies are really trying to move up market and sell more to the enterprise sell bigger deals. And the reality is when you’re when you’re doing traditional demand gen you’re doing what I call fishing with a net. You’re just throwing it out there and you’re kind of seeing what you catch.

And its really hard to focus on, that kind of net on just catching the big fish. And so if that’s part of what your business needs to do is move up market you’re going to have declining returns from traditional tactics. And then last but not least, related to the net is you’re always going to have bycatch.

You’re going to get stuff in the net that you don’t want right and we see this in demand gen all the time. Of yeah we got 200 responders, but only 30 of them are in our ICP, or something like that. And that’s just inherently less efficient.

You know whereas if you have a more spearfishing approach one that you’re you’re putting your focusing marketing dollars on the accounts that you know what you want. Almost by definition is zero waste,

Right, you’re going to to have a better ROI and a better return because all your wood is going against all your energy is going to the accounts that you care about.

So really four reasons, right I think we’re seeing this, number one it doesn’t scale linearly. You can’t just double see double results Number two, there’s just too much of it out there some people are over whelmed. Number three you can’t focus it on the enterprise. And then number four, you get all the, you know bycatch and waste.

Brandon: The inefficiencies…

Jon: And that’s why I people are turning to ABM.

Brandon: Got it so, with this kind of a lot more demand gen people coming in looking at ABM. Do you think maybe demand gen starts to own ABM or how do you see that working?

Jon: Yeah, I think at the end of the day whatever we’re talking about B2B marketing right we’re just talking about trying to create pipeline to support the sales team. And, there’s just different kinds of tactics you use and different tactics are appropriate at different price points.

You know, so yeah, I don’t I don’t see it as kind of this like, two different camps thing I think there’s absolutely a blurring and blending that can and should be happening.

Brandon: Great so we’re happy to talk to some more demand gen people

Jon: Of course

Brandon: Alright, cool thanks Jon

Jon: Cheers

Brandon Redlinger
Brandon Redlinger
Brandon Redlinger is the Head of Growth at Engagio, the Account-Based Marketing and Sales platform that enables teams to measure account engagement and orchestrate human connections at scale. He is passionate about the intersection between tech and psychology, especially as it applies to growing businesses. You can follow him on twitter @brandon_lee_09 or connect with him on LinkedIn.

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