The Lie Called SaaS Demand Generation

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Most well-established marketing departments in SaaS companies have one or more people in demand generation or “demand gen.”

I have always hated this term because I think it completely misunderstands the purpose (and the limits) of marketing.

You can not generate demand where none exists. You can only channel demand that inherently exists in a market.

A prospect either wants a particular problem to go away or doesn’t.

In the beauty industry, you can make money selling to consumers who already want to look more beautiful.

In the financial services industry, you make money by selling to investors who already want to improve their financial situations.

In the SaaS markets, you make money by selling to customers who already want a solution for their massive headaches.

Let me convey this idea in a different way.

If your company sells Tylenol as a way to eliminate headaches, the purpose of your demand gen team is not to convince people who never have headaches to buy Tylenol. There is a name for this kind of marketing strategy… it’s called stupid.

(I hate to be harsh… but hearing a harsh message is much less expensive than blowing millions in misguided demand gen.)

The goal for your marketing team is to identify the prospects in the marketplace who already have or tend to have headaches… the prospects who already hate headaches… and already want them to go away.

You want your marketing team to attract those kinds of prospects, then you convince them why they should buy Tylenol instead of Advil or Aspirin.

At the end of the day, none of us are in the SaaS business. We are in the “make headaches go away” business. The sooner you realize that (and the sooner your marketing team realizes that) the sooner you’ll be able to scale ARR.

SaaS isn’t an industry… it’s simply a delivery (and billing) model for headache removal services.

And to finish my rant, instead of calling it “demand gen,” the function should be called “lead gen” or “lead generation.” Generating leads from people who already have headaches is achievable and should be the focus.

Burning cash to generate demand by convincing people to buy a solution to a problem they don’t have is pointless.

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