027. What Is Demand Gen? The Value & Supply Chain Interpretation

Hello everyone, this is Emilio Garcia. Welcome to another episode of Demand Gen Studio. I'm really happy to have the opportunity to talk to you today. As always, if you are watching this episode live, please share in the comments where you listening from and or watching from. And if you have any question during the streaming, please just add it there and I will be happy to answer some of it. Today we have a very interesting episode. The conversation today is going to be about what is demand generation or at least a way, the way that I interpret it related to value and supply chains in full transparency. I haven't spent time or haven't had the opportunity to put this episode in this live stream series that is actually about demand generation. Basically because I was on my own journey to, to understand demand generation. So I've been browsing and searching and learning because obviously it's a space that the definition can sometimes be very narrow and sometimes can be very broad and anything in between, of course. But in a few weeks, a few weeks ago, I finally found what I believe is my interpretation. It came from a combination of information that I found about Marketo on a blog and also something related to Wikipedia. And I find, I found it very interesting and I want to share with you and well, let's start right away. So in this particular episode I'm gonna going to help myself with a graphic. I have it here and I like it because I believe it really summarizes the concept. So I will walk a step back and talked about value change and supply chain. So value change for those in the business world, of course, especially around manufacturing. It's a concept that describe all the processes and activities that a company accomplish to add value to an article or a product or a service. And it encompass the sourcing of the raw materials or the people and the requirement to production to transform it in the case of a service. But also the distribution, marketing and the sales and the after or service, you can say in a sense that the value chain that a company is able to create, that's what delivers the, the profit for it, right? So if the value change create a competitive advantage, then the value change great profit for the company. So I like that idea of the, you know, starting from the supply or the raw materials and end into the service or the experience of the, of the buyer. And so that change, you can see it as built on two, two related change. And one of them very well known especially manufacturing is the supply chain, which is the one that I'm showing up here. So this is a concept that is very well Known and I, I use kind of like a wheel or a circle to Illustra fact that for those especially of you that might be listening in the future that are in the industry of manufacturing, supply chains are a combination of the processes, technology and people that take raw materials and transform those raw materials or transform the available time from people into service and then they are in charge of distribution. And at the heart of that series of processes there is the ERP or the enterprise resource planning software usually, or a platform that allows to connect all that. So you can say that the value chain has this supply chain and there is a demand portion of it, right? It makes no sense to transform raw materials or the work of people and deliver to the market if there's nobody on the other side to consume it, meaning the client or the companies that purchase from the creator, from the manufacturer. So that demand chain is the other portion of it, right? And as you can see here, it's also build from parts. Actually a software platform like HubSpot represent that demand chain as the flywheel, where the heart is the CRM, which contain all the information and the data and processes or maps the processes of the departments of marketing, sales and service or customer success, which represent the stages that the the buyer goes through to acquire the product. But it's really, really important to put them together because in a way, if I like this analogy of the wheel, because in a way you can see that if these two were gears and they were interconnected, then you will think that it makes no sense to make spin the supply chain unless the demand chain is also spinning, right? And if you interlock them, the demand chain is the one in charge or the one responsible to make the supply chain spin faster, right? So that's the way that I envision them and I see the relationship. You can say that you have the total value change, which is the ability or the competitive advantage of the company to take raw materials or the knowledge of people for service and transform it and deliver it through different distribution channels. And the way that you connect with the market is through the marketing, the sales and the service processes. And that represents the whole thing. But you can separate them into two gears or wheels where you have the ERP as the one that is managing or connecting three of the big processes from the supply chains and. And you have the CRM connecting the other three, right? So in a way, that's how I envision them and how I like it right now. Therefore, it makes sense to compare the more mature concept of supply chain to the one of Demand chain. And that way we can see the role in, and expectations from the marketers or the practitioners that are working on demand generation. It makes a lot of sense, or at least it makes a lot of sense for me. What is the role of the demand generation marketer or manager or director when you compare it to the one that is better known, which is the supply chain part. So one key aspect, conversations that I have with clients related about the system of records in the manufacturing world, or at least in companies, they have a very mature supply chain. Nobody will question the need not only to have an erp, but especially to keep it updated to make sure that the data, the structure, the processes that are being managed there makes sense. Because if we are not able to connect information from the purchasing department or the logistics department to manufacturing and to distribution, you will have these situations, you know, in the manufacturing world where you don't have the right parts or you don't have the right materials, or if production is not connected through the ERP to the product purchasing, you, you might have, you know, inventory or delays on the production. And the same goes for distribution. If you are, if you are not aware of the product being delivered and what are the inventories on the final stage, then you, you can run into problems with production in terms of, you know, production levels and all that. So it will be unthinkable for a mature company with a big supply chain to not rely on the ERP to reflect all those interconnections between the processes. And however, on the demand chain side, I have seen companies where the CRM exists, but it doesn't have that same function, it doesn't have that same central role. And it's still allowed to have, for example, silos of information where marketing have some data and sales have some data and customer success have some data. And that makes a lot of challenges. That creates a lot of challenges because the client is not treated as a whole, you know, as an entity with the same properties across all departments or stages. But if marketing is working with the prospect or the client, they get a certain treatment. And if they're working with sales is different and customer success is the same. And internally the information is lacking, right service have no idea of the product that the client has bought or the ones that are interested in. And so you don't close the circle. And that's the main role of the CRM on the demand generation or demand chain part. It connects all the information and it supports the work of the three groups at the same time because they have a place where they share the information. So looking at it in that way, it makes, you know, total sense to have a CRM. For example, if you want to start working on demand generation. If you don't have that foundation, it will be very hard to align the three processes that compromise or that reflect the the demand chain portion. Now, the other thing that this representation brings to mind is the importance of alignment to very similar to what I was sharing before. On the supplies chain side is very well understood that purchasing and production and distribution need need to be aligned with 100% so you don't have problems with inventory or shortages from the different products and in the production line in general. But something similar happens on the demand chain side, right? For some of the situations where we work with clients, where you have these marketing initiatives that are geared toward market buyer Personas or even products that are not the same that sales is trying to promote in the market or to close in the market, right? So there's no alignment onto who we are trying to sell, to what kind of products we are trying to sell at, what features, what industries are important or relevant. Between the two, then you have this mismatch and the efforts that don't add up, that flywheel don't run faster and faster because one team is fighting the other or creating friction. But the same can be said of service. It makes no sense to be present on a market and bring some leads and even close them if after that the customer has a very bad experience or we are not able to understand if they're having success with the product that we landed on the market. And worst of all, if we are having success, if we are delivering the value that we promise during the marketing and sales process, it will be a ways to not document that success in the form of testimonials, in the form of customer case studies or industry case studies. So we can go back to the market and say these are the industries, these are the pain points that we better solve and therefore again, keep aligned marketing, sales and service. And again in a very similar fashion, this is a very important concept that sometimes is miss on the demand chain portion. But nobody will question on the supply chain side, right? Nobody will question that there's a need to alignment between purchasing and production and between production and distribution. Because the impact of those mistakes is reflected very clearly on the economic side, right? In the form of inventory or in the form of lost revenue, in the form of, you know, lost sales. But. But to a lesser degree, the same happened on the demand chain side. It's just that it's not so easy to see sometimes because again, the system are not interconnected with the CRM. So that brings me to the other aspect that I want to bring to the table today and is how this relates to the role of, of the demand gen head that can be the demand generation manager or director or anyone in charge of the demand generation portion for the company and is to compare it to the role that already exists on the supply chain side. So usually you have a supply chain manager director that is in charge of is heavily geared toward logistics, right? To the purchasing part. But in general they are looking at the whole picture, right? From purchasing to distribution. It makes no sense to work on improving the relationship with vendors and making sure that the inventories are aligned and in terms of also making sure that we reduce friction between purchasing and production if we don't, if we don't have the visibility into the distribution. So usually the head of supply is while is not in charge of purchasing or is not in charge directly of operations. Definitely not. Or distribution has that visibility that allows them through the ERP to define some goals and practically make two big impacts on the company on the supply chain. One is to make everything run more efficiently, right? And also at a higher value, right? Reducing the cost on purchasing, improving or helping to improve efficiency and operations and improving efficiency on distribution. But the other big portion of it is reducing friction, right? Which helps make that flywheel run faster. So in a similar way, the person in charge of demand generation or the manager or director has a similar role nowadays. I believe that has evolved into what is called revenue operations, which I think is where this is all heading. But the idea generally is the same. With the help of the CRM and the overall business goals of the company, it is possible to influence from marketing, starting from marketing, the presence of the brand and to bring both people that have the intent or that is the right ideal client profile and buyer Persona and walk through the process on sales and customer success to bring back those testimonials, those case studies and close the loop, right? And that way we can make the flywheel start to spin faster. And as we document and reflect the processes and improve them on the CRM, then we can reduce the friction. So while in the case of the demand generation practitioner, the focus is primarily on just giving impulse or momentum to that flywheel, there's also a component of reducing friction, especially through alignment, alignment between marketing and sales and alignment to a lesser degree between sales and customer success. And again, that's another way that you can, for those CEOs or general managers of companies that are debating if in general demand generation or revenue operations and the need for alignment between marketing sales and service makes sense just look at the supply chain where the same concepts the importance of having a system of record the importance of having alignment the importance the importance of having a person or a department in charge of making sure that those three process core processes are aligned and ruling running efficiency efficiently makes total sense then why it wouldn't make sense on the other big portion of the value change right and that's kind of like the concept that I wanted to bring today. I hope that you have found value on this idea and I will continue to explore it over time I think is something that makes a lot of sense and that I feel really excited about but for today that will be all. I really appreciate all of you that might be listening today or in the future and I look forward to our next episode. Have a great day.