E245 Demand Creation
Ann Miura-Ko
January 2011
Agenda
 Demand Creation Definition
 Direct customer relationship
 Indirect customer relationship
 Metrics and Experimentation
key activities
value
proposition
customer
relationships
key
partners
customer
segments
cost
structure
revenue
streams
key
resources
channels
3
images by JAM
Test
Hypotheses:
• Channel
• (Customer)
• (Problem)
Agile
Development
Test
Hypotheses:
• Product
• Market Type
• Competitive
Customer
Development
Team
Test Hypotheses:
• Size of Opportunity/Market
• Validate Business Model
Test
Hypotheses:
• Demand
Creation
Test
Hypotheses:
• Problem
• Customer
• User
• Payer
Test Hypotheses:
• Channel
Test Hypotheses:
• Pricing Model / Pricing
CUSTOMER RELATIONSHIPS
what relationships are you establishing with each segment?
personal? automated? acquisitive? retentive?
Demand Creation
 How will customers segments hear about
your product?
 How does market type impact my strategy?
 How much will it cost to acquire a customer
using these strategies?
Market Type
Existing
Resegmented
New
Customers
Known
Possibly Known
Unknown
Customer Needs
Performance
Better fit
Transformational
improvement
Competitors
Many
Risk
Lack of branding, Market and
sales and
product redistribution
definition
ecosystem
Evangelism and
education cycle
Examples
Google
Groupon
How does market type
Many if wrong,
None
few if rightdemand creation?
influence
Southwest
Market Type determines:
 Rate of customer adoption
 Sales and Marketing strategies
 Cash requirements
Demand Creation by
Market Type
Existing
Resegmented
New
 Create, drive demand into
your sales channel
 Educate the market about
what’s changed
 Drive demand into your sales
channel
 Educate the market
 Identify and drive early
adopters into your sales
channels
Who needs to hear about you?
End User
Suppliers
Influencer /
Recommender
Channels
Economic Buyer
Government
Decision Maker
Partners
Demand Creation Feeds
the Sales Funnel
Demand
Creation
Acquisition
Paying
Customers
$
Agenda
 Demand Creation Definition
 Direct customer relationship
 Indirect customer relationship
 Metrics and Experimentation
Getting Free Users
Demand
Creation
 SEO (without consultants)
 Blogging / Sharable content
 Social Media / Gaming
Mechanics
 Communities
 Proven viral coefficient > 1
NOTE: “Viral” isn’t a strategy, it’s a product feature you either
have or you don’t
Paid Channels
Demand
Creation
 PR
 Demand Capture
-
SEM
“Free” products (e.g. widgets)
Biz Dev
Affiliate Marketing
 Market Education
-
Webinars
Email marketing
Trade Shows
Analyst Reports
Direct Sales
TV / Radio
 How many come
through the first step?
 How much does that
cost?
 What is the
conversion between
each level?
 How much in
revenues can you get
out of each acquired
customer?
Agenda
 Demand Creation Definition
 Direct customer relationship
 Indirect customer relationship
 Metrics and Experimentation
Example: Healthcare
Healthcare – system requirements
Payer
FDA
 Approval of product category
 Compelling clinical benefits
and cost reduction
 Product approval
 Manufacturing approval
 Quality control process
approval
Healthcare & Marketing
Product
Champions
FDA
 Free samples
 Professional papers
 Speeches by leading academics and
influential doctors
 Leading institution as reference
customer
 Conference presentation
 Continuing medical education
 Restrictions on user generated
content
- Adverse event postings
- Off label use postings
 Restrictions on direct selling to
doctors
Critical questions
 What are critical regulations and approval
processes that need to happen prior to
launch of product?
- Industry
- Federal / State
 Are there regulations on marketing efforts
as well?
 Who influences the purchasing decision
and how can they become an ally?
- What is required to be endorsed?
Agenda
 Demand Creation Definition
 Direct customer relationship
 Indirect customer relationship
 Metrics and Experimentation
Customer Acquisition Cost
How much do you have
Demand
to spend here
Creation
To get one
customer here
Acquisition
Paying
Customers
$
The Sales Funnel
Enterprise Software
Proposal
Feasibility
Demonstration
First Sales Call
Qualified Lead
Leads
Paying
Customers
Purchase Order
$
Other Sales Funnels
1.
Visit
Sign Up
2.
Informational
Meeting
Trial
Activate
Contract
Negotiation
Upgrade
Signed
Contract
 What does your funnel look like?
 How long does each part of the funnel
take?
 What % converts between each section?
Cost of Customer Acquisition
Calculation
David Skok
Cost of Customer Acquisition
Calculation
Demand Creation Pivot