The Key Indicators of Demand Generation Success

The Key Indicators of Demand Generation Success

A B2B marketer is as good as the data they are tracking. So when it comes to measuring demand generation success, it’s important to track the right metrics. With longer sales cycles and a marketing stack helping you launch campaigns, there are plenty of metrics you could dive into. 

However, diving into wrong metrics can do more harm than good.  

Metrics and data are useful when presented in the right context. With demand generation, you need to know which metrics are directly impacting your operations.

So how do you choose the right metrics?

Are you effectively tracking each stage of your demand generation strategy?

It’s important to define a well-rounded approach to measure the most essential metrics.

So before we get into defining the different categories of metrics to track, let’s first understand what is demand generation is!

What is a Demand Generation Strategy?

In its simplest form, demand generation refers to any marketing activity that involves driving awareness and interest in your company’s products and services to build a sales pipeline of qualified leads.

Unlike inbound or traditional marketing processes, demand generation aligns marketing closely with sales.

Demand generation starts with identifying prospects through content and inbound marketing and passing these leads to a nurturing team. The team nurtures and then qualifies the prospects based on a lead scoring system and passes the qualified leads to the sales team for conversion.

Popular Metric Categories for Demand Generation Funnel

Engagement metrics:

How are leads and prospects responding to your content? It provides insights into how people interact with your brand. It includes metrics like impressions, click-through rates, subscriptions, and open rates.   

Performance metrics:

Performance metrics are excellent to evaluate your demand generation funnel. It includes metrics like sales qualified leads, marketing qualified leads, sales cycle length.

ROI metrics:

These metrics put value to your marketing efforts. Metrics include customer acquisition cost, leads converted, customer lifetime value and total generated revenue.

A good measurement strategy will consider all the necessary metrics in all the stages of a demand generation strategy. The metrics you choose to track depend on the campaigns you are running. Most metrics often overlap, and you can use only the important one to optimize your campaign.

Out of all the metrics you track, here are some of the important ones that usually provide insights and have a greater impact on the demand generation funnel.  

 1) Cost Per Acquisition

Cost per acquisition is the most important metric to measure the success of your demand generation strategy. Diving into clicks and impressions might be interesting, but the cost per acquisition reflects your revenue generation efforts.

CPA is a metric used to measure the cost to acquire one single customer through a specific marketing campaign or channel. You would want to keep this number as low as possible. 

Additionally, you can also use the cost-per-lead metric to track spending to acquire a single lead. This is important in knowing how much you have to spend to keep your sales pipeline full.

2) Customer Life Time Value

This is currently the most popular metric in the digital marketing world. CLV is used to predict revenue that a single customer is likely to bring through their lifetime when connected with your business. The profitability of today’s marketing campaigns is measured by how much your business can earn from each customer the campaign brings in.

CLV is an average profit from all your customers. Some customers may generate less revenue and others much more. CLV can be influenced by many factors, including customer service, upselling, cross-selling, and discount offers. But on the basic level, it’s a metric to measure the effectiveness of your campaign.  

3) Demand generation Funnel Conversion Rate

The entire purpose of a demand generation strategy is to attract specific high-value customers. The funnel is designed to attract traffic from different sources and converting them.

A typical lead generation funnel has 4 basic strategies

  • Awareness
  • Interest
  • Decision
  • Action

As leads move through this funnel, most of the leads will opt out at different stages. Maybe they were not interested in your product, or find it too costly. Maybe it isn’t the right time. It’s natural. But you still need to analyze the efficiency of each stage of your demand generation funnel.      

The conversion rate of your marketing strategy depends on the quality of leads your funnel brings in. More leads may not necessarily mean more sales.

Every business has unique sales funnels and hence it’s difficult to provide benchmarks you can aim for. Stay focussed and keep improving each stage of the funnel and bring in more quality leads. If you are attracting a high number of leads but the conversion rate is low, it’s time to fix the top of the funnel strategy.   

4) Sales Closed per Marketing Channel

Conversion rates are important. But with demand generation, it goes beyond just tracking conversion rates. Demand generation invites leads from a number of sources including social media, email, referrals, PPC, Outbound, etc.

Each of these channels has budgets and resources assigned. Hence it’s important to track their conversion rates as well. To optimize your demand generation funnel, you have to specifically target each channel and check their conversion rates.

A careful analysis will clarify that certain channels aren’t worth pursuing and others need more resources and budgets. Without doing this, you may misplace budgets and target channels that provide the worst sales outcomes.  

5) Sales Cycle Length

How long does it take for a prospect to move from the awareness stage to the sales stage? Like all the other metrics we discussed here, the answer varies with each business. Leads from different channels are likely to convert in different time frames.

Ultimately, your goal should be to reduce the time taken. The quicker you can convert a lead into sales, the more revenue you can generate.

As demand generation strategy aligns marketing and sales, tracking the sales cycle time reveals how good the alignment is done.

Demand Generation vs. Lead Generation

While demand generation and lead generation are used interchangeably, they both vary in their approach. Demand generation is focused on brand awareness and prospect education to move leads down the funnel. Hence it’s more of a top-of-the-funnel strategy.

Lead generation, on the other hand, depends on demand generation for creating buzz around the product. Lead generation focuses on converting this buzz into customers. The process relies on good segmentation, customer service, and resources that inspire leads to take action.                                  

Demand Generation Best Practices

1) Utilize Social Media

Social media has been a removed part of the B2B marketing strategy. But demand generation understands its importance. Since demand generation creates buzz around your brand, social media can be the best platform.

B2B marketing cycles are extended over a period of time. Social media can be a part of multi-touch point marketing strategy and help you stay in the buzz until the prospect is ready to convert.

2) Integrate Sales and Marketing

As digital marketing evolved, the segmentation between sales and marketing was not making any sense. Demand generation strategy focuses on aligning these together.

Your marketing team’s focus should be to create content to move customers down the sales funnel. The content should entice them to move ahead in the funnel.

The sales reps can use the marketing content and satisfy the prospect’s queries. They can even ask for customer feedback and help the marketing team to optimize strategy.

  3) Create a Good Email Marketing Strategy

Email marketing is undeniably the best marketing tactic in demand generation strategy.

But it’s more successful when you combine it with other forms of marketing. Your emails need to be responsive. Meaning, your content should change according to the response of the customer.

Email can serve both as a cold outbound strategy and as a lead nurturing tool. Many B2B marketers still consider email as their go-to marketing tool. Demand generation only combines it with other marketing tactics.

Search Engine Optimization

Ranking your website first in the search engines can drive organic traffic and consequently boost website conversions.

The best part of SEO is that customers come asking to buy your product. All you have to do is provide a smooth customer experience.

SEO is a highly technical activity, if done right, can reap unmatched benefits for any B2B business. 

Valuable content is an important part of SEO strategy. Content brings in virality and builds authority around your business.

Build Buyer Personas

You cannot start your demand generation strategy without building an ideal buyer persona. A typical B2B buyer persona may include name, work email id, demographics, job title, and interests. 

Since demand generation strategy drives prospects down the funnel, you need to create multiple buyer personas and cater to their needs accordingly. 

A buyer persona gives you a holistic view of what your customer expects at different stages of the sales funnel. They can also help you identify the right marketing channels for your business.

Run Paid Ads that Convert

A well-planned paid advertising strategy can quickly get you in front of your target audience and thus reduce sales cycle time.

Regardless of the channel that you are using, your paid strategy must clearly segment and specifically target the audience who are more likely to convert.

A good ad strategy helps your bottom of the funnel strategy by giving the sales team easily convertible leads

Re-targeting, search engine ads, display ads are some of the most popular ad formats used by the B2B industry. Your demand generation strategy should definitely have resources allocated to paid advertising strategy.


For most B2B businesses, demand generation strategy is a combination of broad marketing efforts. Traffic and leads come in from different sources and lead move at different paces 

Benchmarking metrics is useless since each funnel is unique. Companies should track and measure metrics against themselves. Track metrics on an individual basis so you get a clear idea of what’s working and what’s not.

Demand generation is all about incremental growth and optimizing the funnel will look different for each company. But even slow progress will compound into higher revenue over time. By tracking only the important metrics and following the best practices mentioned in this article, you can build a solid foundation for your demand generation strategy.