Monday, October 20, 2008

Marketing Automation vs. Demand Generation: What's the Difference?

One of the first people I told about the new Guide to Demand Generation Systems -- an experienced database marketing consultant, no less -- was receptive to the Guide but asked whether there was any real difference between "demand generation" and "marketing automation" in general. This set off all kinds of alarms, since this was someone who clearly should have been familiar with the distinction.

As with most things, my immediate reaction was to write up an answer. In fact, I've decided I need at least three pieces on the topic: one explaining demand generation in general; one explaining how it differs from marketing automation; and another distinguishing it from customer relationship management (CRM). All this is on top of the piece I was in the middle of writing, on how to cost-justify a demand generation system. These are all fodder for the "Downloadable Resources" section of the new Guide site (have I mentioned in this paragraph that it's http://www.raabguide.com/?), which was looking pretty threadbare at just two pieces.

Anyway, the piece comparing demand generation vs. marketing automation is just finished and posted you-know-where. The short answer is demand generation systems serve marketers who are focused on the lead acquisition and nurturing portion of the customer life cycle, while marketing automation systems serve marketers who are responsible for managing the entire life cycle: acquisition, maintenance and retention. I suspect this distinction will not be popular among some of you, who will correctly point out that demand generation systems can be and are sometimes used for on-going customer management programs. True enough, but I'd still say the primary focus and competitive advantage of demand generation systems is in the pre-customer stage. One big reason demand generation systems aren't really suited for cradle-to-grave customer management: they don't typically capture the sales and service transactions needed to properly target customer communications.

By all means, download the full paper from http://www.raabguide.com/ and let me know your thoughts.

1 comment:

Mark's Library said...

David -- I could not agree more with your assessment. Demand generation tools are the most in demand frequently (no pun intended)since they speak to management's most frequency focus -- customer acquisition. Marketing automation can be more involved to select and implement, yet have greater value since it speaks to the entire customer lifecycle and drives revenue from current as well as new customers.