In the tech-driven start-up world, we focus a lot on the practical side of things (which is fine), but we overlook the other side: demand generation.
The master of demand generation is Nike, which invented influencer marketing when it didn’t have a name!
Back in the 1970s, Nike closed its first deal.
The company paid $5,000 to distance runner Steve Prefontaine to run with the company’s shoes.
A tiny deal compared to the ones it closes now.
Steve Prefontaine represented the athlete who crystallized the approach that Nike would use later on to generate demand for its products.
Today (as I’ll show you), Nike has scaled this approach, but at the time, it had to re-invent it from scratch, as athletes didn’t know who Nike was (the Nike brand shoe was launched in 1972).
Prefontaine was also a pupil of Nike’s co-founder, Bill Bowerman.
Bill Bowerman was a coach at the University of Oregon; he was the product guy, always experimenting with new shoes and making technology a key component of the shoes.
Bill Bowerman opened the way to technology as a key component to differentiate the product, thus a key element of Nike’s marketingstrategy for decades.
Yet, the most staggering part of Nike’s demand generation is the iconic side.
In 1984 Nike closed a deal with basketball player Michael Jordan.
Today the Jordan brand – a segment of Nike’s $46 billion yearly business empire (in 2022) – generated in the same year a staggering $5.1 billion!
And for some context, in 2022, Nike spent $3.9 billion in demand generation efforts.
Now, Nike has been doing it for decades, leveling up its game, but initially, it did it with minimum budgets.
Thus, for tech-driven companies, demand generation can be done with a combination of fast experimentation and bold bets, not necessarily huge budgets.
Breaking down the walls between perception and engineering
Let’s see some of the strategies to use.
Change perception, don’t change the code.
One misleading fact of engineering-driven companies is that you got to make radical, core changes to products, to enhance value.
But those can be extremely expensive, time-consuming, and very very risky since they are driven by aggressive assumptions about what users want.
Instead, if you change perspective and start to ask, what’s the simplest change, I can make on the UX which can change the perception of my product?
You get to find bold ideas to test. Those might be cheap, reversible, and easy to execute/test.
These ideas are what I like to call asymmetric bets. They carry a low downside, and massive upside.
There is a caveat for that, to find them, you need to develop a sort of mindset where you can find these asymmetric bets.
They are fast, reversible, and have a potentially unlimited upside with a capped downside.
And often, they are very simple, counter-intuitive changes that can have a huge impact.
For example, if you’re developing software products for B2C, removing the technical jargon from the UX can make the product scale.
No change to the core software code; simply removes the jargon, which makes the product more accessible, more relatable, and more prone to go viral.
Perceived control
You have an elevator in an office. Everyone complains that it is too slow.
What do you do? Do you get to replace it? You could, but that is an engineer’s approach.
Instead, you need to understand the problem deeply. You don’t need to speed up the elevator’s motion; you need to change the perception of the person experiencing the lift.
Thus, instead of replacing the elevator, you place a mirror in it. And suddenly, a few more seconds don’t look as terrible!
Same thing with tech apps. You don’t necessarily need to make things faster from an engineering standpoint.
First, you can make the experience more pleasant. To say, if you run a website, by simply making the UX more pleasant, by changing colors and characters, you can boost the perception of the site.
Perhaps, you can simply increase the size of the fonts. Paradoxically, when you optimize for accessibility, suddenly, you might make things more appealing for everyone else.
This, of course, works well for a business that is meant to be accessible to as many people as possible.
To say, if you’re running a luxury company, the last thing you want to do is to make it accessible. Instead, in that case, you might want to create friction and scarcity (as we’ll see).
Second, give perceived control to users. If you run a delivery app, wait time is a key component. The lower, the better, right? Correct! However, there is a certain threshold where less time doesn’t make a huge difference.
In that range, you can warp time perception by, for instance, creating artificial interactions. Where the app describes how the delivery person is coming to you and the progress, it’s making. These small things can make the wait time reduced in “perceived time.”
Third, give it a rationale. Let’s say you are running a website that gives back an audit of something. But the site is slow when it gets too many requests.
Instead of simply having people wait for the report to upload, create a “virtual queue,” which explains that other people are lined up for the free service. That might work well to justify the pain of the wait.
All these solutions warp the perceived time for users!
Enhanced value through pacing
If you’re building a software product, speed is all, right? Well, yes, but…
We’re humans, and if you give me something too fast, I’ll assume it was too easy to get.
Thus, if you’re building, let’s say, a reporting tool, instead of spitting out results right on, have it show an interface that says something like “we’re computing the answers” or “we’re analyzing the data” or simply something that shows the user, the engine is doing cool stuff in the backend.
We’re humans; we want to know that the person or machine on the other side is making a real effort to give us what we want.
And if what we’re looking for is extremely valuable, we want to be sure the person or machine on the other side has taken the proper time to ponder our choices.
Thus, in this sense, engineering and perception run against each other.
The engineer wants to make things faster. The business person understands that engineering needs to be balanced with perception!
Friction as artificial scarcity
Hundreds of years after its founding, Harvard University still has among the lowest admission rates (about 5%).
Why is that? Is it to select talent? Indeed.
But, there is also some signaling in it. And that’s about enhancing the perceived value of a Harvard degree. And a way to do it is to create friction to entry and keep it artificially scarce.
If everyone had a Harvard degree, none would pay hundreds of thousands of dollars to get one!
Luxury companies know this principle well. That is why you get a porter at the entrance, and unless you’re willing to spend money, you might not feel entitled to enter.
That is why Luxury stores look like temples.
Everything there stands to signal scarcity and the status quo.
While luxury companies spend a lot of money on marketing and sales to achieve that.
You can achieve the same with very simple stuff.
For instance, if you sell a physical product, great packaging makes its perceived value increase.
If you sell a digital product, giving it a physical appearance might make a huge difference. Like selling a digital book but showing the cove as if it was a physical book.
Framing and changed perception
In general, coupons might not be a great idea for a business, right?
Yes, as over time, they devalue your product offering.
Yet, if you change the framing and move from a coupon to a contest or lottery, suddenly you’ve changed the perceived value of the offering, you’re increasing demand, and you’re not affecting the product pricing for worse.
In fact, with a contest and lottery, the person on the other side will feel lucky when they win.
However, you still want them to feel good if they lose.
So instead of giving up coupons, you can reframe them. You can give coupons to lottery losers, so they will still feel lucky and have a good perception about receiving a coupon. happy about it.
Thus, a coupon given without reason is worthless.
A coupon given for a reason becomes extremely valuable!
To close, in a tech-driven world, perception becomes the moat
In a tech-driven world, where every company has become a software company, we’re induced to think that hard engineering is the only way to solve issues.
Yet, if we were to devote a bit more effort to understand what simple actions we can take that can create product differentiation, scarcity, and status quo, all of a sudden, we can change the fate of our business!
Key Highlights:
Nike’s Demand Generation Strategy: Nike is a master of demand generation, known for inventing influencer marketing before it became a popular term. They started with small deals like paying distance runner Steve Prefontaine to wear their shoes, which laid the groundwork for their future demand generation approach.
Innovation and Technology: Nike’s co-founder, Bill Bowerman, introduced technology as a key component in their products, differentiating them from competitors. This focus on innovation and technology has been a cornerstone of Nike’s marketingstrategy for years.
Influencer Marketing and Iconic Partnerships: Nike’s iconic partnership with basketball player Michael Jordan through the Jordan brand showcases their ability to generate demand. The Jordan brand generated a staggering $5.1 billion in one year, highlighting the power of strategic partnerships.
Effective Demand Generation on a Budget: Despite their immense success, Nike’s initial demand generation efforts were achieved with minimal budgets. This suggests that other companies, especially tech-driven startups, can also generate demand through fast experimentation and bold strategies rather than relying solely on huge budgets.
Changing Perception vs. Changing Code: Engineering-driven companies often focus on making radical changes to enhance product value. However, changing the user experience (UX) to alter product perception can yield bold, inexpensive, and reversible ideas that have a potentially high impact.
Perceived Control and Experience Enhancement: Changing the perception of a product can be more effective than engineering changes. Enhancing the user experience, increasing accessibility, and creating perceived control can significantly influence user satisfaction and engagement.
Enhanced Value through Pacing: Human psychology suggests that offering something too quickly might reduce its perceived value. By providing users with a sense of effort and time spent in the background, the perceived value of a product can be enhanced.
Friction as Artificial Scarcity: Introducing friction, like selective entry or appealing packaging, can create a sense of artificial scarcity and enhance the perceived value of a product. This strategy is often employed by luxury companies to maintain exclusivity.
Framing and Changed Perception: Changing the framing of offerings, such as converting coupons into contests or lotteries, can alter their perceived value and demand. The perception of receiving value, even if one doesn’t win, plays a significant role.
Perception as a Business Moat: In a tech-driven world, where companies are heavily focused on engineering, changing perception can become a powerful competitive advantage. Simple actions that create differentiation, scarcity, and status quo can significantly impact a business’s success.
Real World Case Studies For Demand Generation!
Tesla – EVs
Demand Generation Strategy: Position electric vehicles (EVs) as luxury, high-performance cars to change the perception of EVs.
Tactics:
Roadster unveiling to showcase EVs can be fast and sleek.
Establishment of the Supercharger network to address range concerns.
Free test drives and events for hands-on experience.
Demand Generation Outcome: The luxury and performance appeal of Tesla’s models created a ripple effect, making EVs a sought-after option.
Apple – Tablet
Demand Generation Strategy: Fill the gap between smartphones and laptops with an intuitive device.
Tactics:
iOS’s intuitive user interface.
App Store ecosystem to encourage software development.
Launch events and marketing campaigns to build anticipation.
Demand Generation Outcome: Apple successfully created a new demand for tablets, previously seen as redundant.
Netflix – Streaming Services
Demand Generation Strategy: Transform how consumers access and view entertainment.
Tactics:
Licensing deals with studios for diverse content.
Original content production for exclusivity.
Global expansion to tap into various markets.
Demand Generation Outcome: Established streaming as a primary mode of entertainment consumption.
Airbnb – Shared Economy for Accommodation
Demand Generation Strategy: Present an alternative to traditional hotel stays by promoting local experiences.
Account-based marketing (ABM) is a strategy where the marketing and sales departments come together to create personalized buying experiences for high-value accounts. Account-based marketing is a business-to-business (B2B) approach in which marketing and sales teams work together to target high-value accounts and turn them into customers.
Ad Ops – also known as Digital Ad Operations – refers to systems and processes that support digital advertisements’ delivery and management. The concept describes any process that helps a marketing team manage, run, or optimize ad campaigns, making them an integrating part of the business operations.
Venture capitalist, Dave McClure, coined the acronym AARRR which is a simplified model that enables to understand what metrics and channels to look at, at each stage for the users’ path toward becoming customers and referrers of a brand.
Affinity marketing involves a partnership between two or more businesses to sell more products. Note that this is a mutually beneficial arrangement where one brand can extend its reach and enhance its credibility in association with the other.
As the name suggests, ambush marketing raises awareness for brands at events in a covert and unexpected fashion. Ambush marketing takes many forms, one common element, the brand advertising their products or services has not paid for the right to do so. Thus, the business doing the ambushing attempts to capitalize on the efforts made by the business sponsoring the event.
Affiliate marketing describes the process whereby an affiliate earns a commission for selling the products of another person or company. Here, the affiliate is simply an individual who is motivated to promote a particular product through incentivization. The business whose product is being promoted will gain in terms of sales and marketing from affiliates.
The bullseye framework is a simple method that enables you to prioritize the marketing channels that will make your company gain traction. The main logic of the bullseye framework is to find the marketing channels that work and prioritize them.
Brand building is the set of activities that help companies to build an identity that can be recognized by its audience. Thus, it works as a mechanism of identification through core values that signal trust and that help build long-term relationships between the brand and its key stakeholders.
According to inbound marketing platform HubSpot, brand dilution occurs “when a company’s brand equity diminishes due to an unsuccessful brand extension, which is a new product the company develops in an industry that they don’t have any market share in.” Brand dilution, therefore, occurs when a brand decreases in value after the company releases a product that does not align with its vision, mission, or skillset.
The brand essence wheel is a templated approach businesses can use to better understand their brand. The brand essence wheel has obvious implications for external brand strategy. However, it is equally important in simplifying brand strategy for employees without a strong marketing background. Although many variations of the brand essence wheel exist, a comprehensive wheel incorporates information from five categories: attributes, benefits, values, personality, brand essence.
The brand equity is the premium that a customer is willing to pay for a product that has all the objective characteristics of existing alternatives, thus, making it different in terms of perception. The premium on seemingly equal products and quality is attributable to its brand equity.
Brand positioning is about creating a mental real estate in the mind of the target market. If successful, brand positioning allows a business to gain a competitive advantage. And it also works as a switching cost in favor of the brand. Consumers recognizing a brand might be less prone to switch to another brand.
Business storytelling is a critical part of developing a business model. Indeed, the way you frame the story of your organization will influence its brand in the long-term. That’s because your brand story is tied to your brand identity, and it enables people to identify with a company.
Content marketing is one of the most powerful commercial activities which focuses on leveraging content production (text, audio, video, or other formats) to attract a targeted audience. Content marketing focuses on building a strong brand, but also to convert part of that targeted audience into potential customers.
One of the first mentions of customer lifetime value was in the 1988 book Database Marketing: Strategy and Implementation written by Robert Shaw and Merlin Stone. Customer lifetime value (CLV) represents the value of a customer to a company over a period of time. It represents a critical business metric, especially for SaaS or recurring revenue-based businesses.
Customer segmentation is a marketing method that divides the customers in sub-groups, that share similar characteristics. Thus, product, marketing and engineering teams can center the strategy from go-to-market to product development and communication around each sub-group. Customer segments can be broken down is several ways, such as demographics, geography, psychographics and more.
Developer marketing encompasses tactics designed to grow awareness and adopt software tools, solutions, and SaaS platforms. Developer marketing has become the standard among software companies with a platform component, where developers can build applications on top of the core software or open software. Therefore, engaging developer communities has become a key element of marketing for many digital businesses.
A digital channel is a marketing channel, part of a distribution strategy, helping an organization to reach its potential customers via electronic means. There are several digital marketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.
Field marketing is a general term that encompasses face-to-face marketing activities carried out in the field. These activities may include street promotions, conferences, sales, and various forms of experiential marketing. Field marketing, therefore, refers to any marketing activity that is performed in the field.
interaction with a brand until they become a paid customer and beyond.
Funnel marketing is modeled after the marketing funnel, a concept that tells the company how it should market to consumers based on their position in the funnel itself. The notion of a customer embarking on a journey when interacting with a brand was first proposed by Elias St. Elmo Lewis in 1898.
Funnel marketing typically considers three stages of a non-linear marketing funnel. These are top of the funnel (TOFU), middle of the funnel (MOFU), and bottom of the funnel (BOFU). Particular marketing strategies at each stage are adapted to the level of familiarity the consumer has with a brand.
A go-to-market strategy represents how companies market their new products to reach target customers in a scalable and repeatable way. It starts with how new products/services get developed to how these organizations target potential customers (via sales and marketing models) to enable their value proposition to be delivered to create a competitive advantage.
The term “greenwashing” was first coined by environmentalist Jay Westerveld in 1986 at a time when most consumers received their news from television, radio, and print media. Some companies took advantage of limited public access to information by portraying themselves as environmental stewards – even when their actions proved otherwise. Greenwashing is a deceptive marketing practice where a company makes unsubstantiated claims about an environmentally-friendly product or service.
Grassroots marketing involves a brand creating highly targeted content for a particular niche or audience. When an organization engages in grassroots marketing, it focuses on a small group of people with the hope that its marketing message is shared with a progressively larger audience.
Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.
Guerrilla marketing is an advertising strategy that seeks to utilize low-cost and sometimes unconventional tactics that are high impact. First coined by Jay Conrad Levinson in his 1984 book of the same title, guerrilla marketing works best on existing customers who are familiar with a brand or product and its particular characteristics.
Hunger marketing is a marketing strategy focused on manipulating consumer emotions. By bringing products to market with an attractive price point and restricted supply, consumers have a stronger desire to make a purchase.
Integrated marketing communication (IMC) is an approach used by businesses to coordinate and brand their communication strategies. Integrated marketing communication takes separate marketing functions and combines them into one, interconnected approach with a core brand message that is consistent across various channels. These encompass owned, earned, and paid media. Integrated marketing communication has been used to great effect by companies such as Snapchat, Snickers, and Domino’s.
Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered.
Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience.
The marketing mix is a term to describe the multi-faceted approach to a complete and effective marketing plan. Traditionally, this plan included the four Ps of marketing: price, product, promotion, and place. But the exact makeup of a marketing mix has undergone various changes in response to new technologies and ways of thinking. Additions to the four Ps include physical evidence, people, process, and even politics.
Marketing myopia is the nearsighted focus on selling goods and services at the expense of consumer needs. Marketing myopia was coined by Harvard Business School professor Theodore Levitt in 1960. Originally, Levitt described the concept in the context of organizations in high-growth industries that become complacent in their belief that such industries never fail.
Marketing personas give businesses a general overview of key segments of their target audience and how these segments interact with their brand. Marketing personas are based on the data of an ideal, fictional customer whose characteristics, needs, and motivations are representative of a broader market segment.
Meme marketing is any marketing strategy that uses memes to promote a brand. The term “meme” itself was popularized by author Richard Dawkins over 50 years later in his 1976 book The Selfish Gene. In the book, Dawkins described how ideas evolved and were shared across different cultures. The internet has enabled this exchange to occur at an exponential rate, with the first modern memes emerging in the late 1990s and early 2000s.
Microtargeting is a marketing strategy that utilizes consumer demographic data to identify the interests of a very specific group of individuals. Like most marketing strategies, the goal of microtargeting is to positively influence consumer behavior.
Multichannel marketing executes a marketing strategy across multiple platforms to reach as many consumers as possible. Here, a platform may refer to product packaging, word-of-mouth advertising, mobile apps, email, websites, or promotional events, and all the other channels that can help amplify the brand to reach as many consumers as possible.
Multi-level marketing (MLM), otherwise known as network or referral marketing, is a strategy in which businesses sell their products through person-to-person sales. When consumers join MLM programs, they act as distributors. Distributors make money by selling the product directly to other consumers. They earn a small percentage of sales from those that they recruit to do the same – often referred to as their “downline”.
The Net Promoter Score (NPS) is a measure of the ability of a product or service to attract word-of-mouth advertising. NPS is a crucial part of any marketing strategy since attracting and then retaining customers means they are more likely to recommend a business to others.
Neuromarketing information is collected by measuring brain activity related to specific brain functions using sophisticated and expensive technology such as MRI machines. Some businesses also choose to make inferences of neurological responses by analyzing biometric and heart-rate data.
Neuromarketing is the domain of large companies with similarly large budgets or subsidies. These include Frito-Lay, Google, and The Weather Channel.
Newsjacking as a marketing strategy was popularised by David Meerman Scott in his book Newsjacking: How to Inject Your Ideas into a Breaking News Story and Generate Tons of Media Coverage. Newsjacking describes the practice of aligning a brand with a current event to generate media attention and increase brand exposure.
A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.
We can define pull and push marketing from the perspective of the target audience or customers. In push marketing, as the name suggests, you’re promoting a product so that consumers can see it. In a pull strategy, consumers might look for your product or service drawn by its brand.
Real-time marketing is as exactly as it sounds. It involves in-the-moment marketing to customers across any channel based on how that customer is interacting with the brand.
Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales.
Reverse marketing describes any marketing strategy that encourages consumers to seek out a product or company on their own. This approach differs from a traditional marketing strategy where marketers seek out the consumer.
Remarketing involves the creation of personalized and targeted ads for consumers who have already visited a company’s website. The process works in this way: as users visit a brand’s website, they are tagged with cookies that follow the users, and as they land on advertising platforms where retargeting is an option (like social media platforms) they get served ads based on their navigation.
Sensory marketing describes any marketing campaign designed to appeal to the five human senses of touch, taste, smell, sight, and sound. Technologies such as artificial intelligence, virtual reality, and the Internet of Things (IoT) are enabling marketers to design fun, interactive, and immersive sensory marketing brand experiences. Long term, businesses must develop sensory marketing campaigns that are relevant and effective in eCommerce.
Services marketing originated as a separate field of study during the 1980s. Researchers realized that the unique characteristics of services required different marketing strategies to those used in the promotion of physical goods. Services marketing is a specialized branch of marketing that promotes the intangible benefits delivered by a company to create customer value.
Sustainable marketing describes how a business will invest in social and environmental initiatives as part of its marketing strategy. Also known as green marketing, it is often used to counteract public criticism around wastage, misleading advertising, and poor quality or unsafe products.
Word-of-mouth marketing is a marketing strategy skewed toward offering a great experience to existing customers and incentivizing them to share it with other potential customers. That is one of the most effective forms of marketing as it enables a company to gain traction based on existing customers’ referrals. When repeat customers become a key enabler for the brand this is one of the best organic and sustainable growth marketing strategies.
360 marketing is a marketing campaign that utilizes all available mediums, channels, and consumer touchpoints. 360 marketing requires the business to maintain a consistent presence across multiple online and offline channels. This ensures it does not miss potentially lucrative customer segments. By its very nature, 360 marketing describes any number of different marketing strategies. However, a broad and holistic marketing strategy should incorporate a website, SEO, PPC, email marketing, social media, public relations, in-store relations, and traditional forms of advertising such as television.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
