More on the Future of Demand Generation Systems

Summary: let's not forget that most companies are still not even doing simple demand generation. Systems for that might succeed even though advanced integration between sales and marketing is the long-run trend. And, my car hit a deer.

I hit a deer last Thursday while driving to Boston for the Sales 2.0 conference. I'm treating the four hour delay that followed as field research into customer relationship management, which ranged from great (the family-run auto shop that towed my car and took me in) to poor (the Enterprise car rental office that kept me waiting nearly two hours before admitting they didn’t have a vehicle available). It ended with the retired dad of the auto shop owners driving me into the next town to pick up a rental car there. The finishing touch was waving as we passed the local traffic cop, who had earlier stopped at the auto shop to chew the fat in true Mayberry RFD style. All told, my little visit to Plantsville (the actual town name) was straight from a grade B movie—city slicker makes an unplanned stop in a small town and learns about real life—except that I didn’t fall in love with a local shop girl.

The net result, beyond some new anecdotes, was that I missed much of the conference. My only extended conversation was with a sales manager who was just recognizing that cold calls were not the most efficient use of his time, and was quite excited to learn that many vendors can provide qualified lists and do the appointment setting for him. He was also starting to think that maybe the company Web site could play a role in attracting leads. In other words, he far behind the times. Yet he also appeared to be seasoned, competent and generally successful. In its own way, this conversation was as much an intrusion of the real world into my bubble as the stopover in Plantsville.

But then it was back to the bubble (so much more interesting than reality) with vendor meetings. Much of the conversation related to my blog post of the day before, which argued that self-adjusting statistical models will replace manually-generated business rules for alerts, lead scores, segmentation and message selection in demand generation systems. Discussing this idea let me to refine the presentation, which I now describe in terms of marketers catching up with changes in their role. That is, most marketers understand their job as generating leads and are just starting to implement systems to do this better. But their job today is actually to manage relationships deep into the buying process. Industry leaders have recently recognized this. The next step, which has barely begun, is for demand generation vendors to deliver solutions that support the new role. My specific argument is that self-adjusting models must replace rules because only models let the systems handle their expanded responsibilities and still be simple enough for marketers to actually use them. My broader argument is that self-adjusting models, rather than a variety of other new capabilities, will be the really important features for vendors to add.

My vendor discussions also touched on the other side of this coin, which is that demand generation systems to perform the original marketing tasks are quickly becoming commodities. Interestingly, I’ve spoken with more than one vendor who sees this as an opportunity, so long as they get to be the dominant commodity provider. Whether these vendors know how to make this happen is another question. I don't know myself, although I’m guessing the primary requirement (beyond a suitable product) is deep pockets for extensive marketing to grab share quickly.

Nor am I convinced that commoditization is a very good strategy, since even the dominant player may not make much money. But, with my little reality check still fresh in mind, I don’t want to underestimate the market for old-style demand generation systems. Perhaps a simple, low-priced system really can be a major success even though marketers will eventually need something more advanced. (Yes, the obvious strategy is to offer one product that can start simple and expand. But I’m very skeptical that this is actually possible.) It’s an interesting strategic puzzle. Fortunately for me, I don’t have to solve it. I just observe and report.