Early-stage Startups and the Mysteries of B2B SaaS Demand Gen funnels

I’ve worked with a couple of founders who were not familiar with B2B or SaaS marketing concepts when I started, and had a lot of back and forth about how to market B2B SaaS products. And regardless of how they start, those conversations somehow always end up in the same place:

“What’s a demand generation funnel?”

“How do we build a SaaS Demand Gen funnel that works?”

“How much time does it take to see results?”

Demand generation - and the hallowed demand gen “funnel”- are core concepts in B2B SaaS marketing. Because of that, I’ve sometimes made the mistake of overestimating how much non-marketers know about them. 

Common Misconceptions in B2B SaaS Demand Gen

Lead Generation vs Demand Generation

There is a ton of highly SEO-optimized content about the difference between Lead Generation and Demand generation out there. These two articles cover some of it if you want to spend 20 minutes skimming, but really, all you need to know is in the name:

• Demand Generation: activities that focus on creating or channeling demand for your product. This demand will then have to be converted into sales and revenue somehow.
• Lead generation: activities that focus on generating and capturing leads for the business.

Not all demand generation activities consist of lead generation and yield contact information and consent. But the idea is that demand generation should result in leads that are converted step by step into customers and revenue.

“Demand generation activities work as part of a broader approach; lead generation is a lot more tactical.”

What’s a good B2B SaaS Demand Generation strategy look like?

It helps to think about this with practical examples.

At Beamery, most of the work I did - content creation and distribution - was used for demand generation. I spent a lot of time creating blogs and hosting webinars that explained why the way companies managed talent acquisition at the time was suboptimal.

That way, instead of starting our interactions with the prospect with an ask - “give us your contact information” - we started with awareness and education - “here’s an interesting idea that will make you feel more knowledgeable amongst your peers”; namely, that recruiting was currently too reactive and only happened after a job req was created, or that talent teams should be set up with an eye to analytics and operational efficiency, or that employer branding needed to be professionalized. 

Mind you, this was a few years ago, and now Beamery is the talent management provider of quite a few Fortune 500 companies, and these ideas are not new in the recruiting space any more.  

But to summarize, what we did was: create awareness and trust by repeatedly putting out well-researched new concepts, build the brand image with our target audience through repeated impressions (in branding, familiarity is king), THEN request the right to contact people. And that’s the foundation of any good B2B SaaS Demand Generation funnel.

The “Funnel”

The demand generation funnel is the set of processes and systems that make it possible to deploy your marketing activities, track them, collect leads, nurture those leads into prospects then sales, all of it at scale. That’s it. That’s the funnel.

This could be something as basic as: social media account with scheduled posts + subscriber link to a newsletter + CRM with an email management system + automated nurture track with a behavioral trigger. 

It would go like this: Someone decides one day to follow your twitter - pardon, your X - account because you shared a punny caption to an interesting, industry-related newspiece. You pop up in their feed a few times, and one day they decide to actually subscribe to your newsletter. After a while, their company starts looking into products similar to what you’re selling, and they remember your. They open your next email. They go on your website and click around. Your CRM tells you that this person has demonstrated what we call ‘Intent’, and switches them on a product-heavy email track, with pricing info and a link to a demo video. From there, you can either hand them off to sales or automatically steer them towards a self-serve buying page. 

The result was that lead generation activities like personalized landing pages, product ads, and 

even gated content form yielded leads who were already open to the main premise of our offering: that talent acquisition needed to be solved differently. They were also familiar with the brand and therefore a lot more likely to trust it. 

Why does Demand Generation Matter for B2B SaaS?

If all you’re doing is ticking off lead capture activities without doing the demand generation work beforehand, you’re very likely to capture leads that are either 

• Irrelevant, 
• Not ready to buy, or 
• Ready to buy but very expensive. Because if they’ve demonstrated their readiness to buy through their online behavior, you can bet that all your better funded, more established competitors are targeting them too.

Demand generation activities mostly help you prime the ‘relevant but not ready to buy’ segment of your audience, which is really 90% to 95% of your target market at any given time. 

A new model for B2B SaaS demand generation

You know what I find really annoying? When a sales person refuses to give me the information I need to make a purchase until they’ve ‘qualified me’ as a buyer. Especially if the qualification process is a 20 min call at the end of which they still can’t give me the information I need to make a buying decision.

For smaller B2B SaaS solutions that don’t require a decision by committee, more and more software buyers are like me; they don’t get in front of a salesperson unless they have a technical question that is not answered on the website, or they need pricing information to make a call between the various products. When confronted with a buyer like this, your best bet as a company is to give us exactly the information we need as fast as possible, and make yourself the most convenient and easiest to navigate tool. If you’re opaque and unnecessarily fussy, that’s the behavior we will expect from your customer support, and we will want to avoid picking you. 

What I find more likely to help me buy is really open information about product specs, case studies, pricing examples, that I can get without having to get on a call with someone.

Setting up a demand generation funnel for an early-stage B2B startup and starting to capture relevant leads can vary in time based on numerous factors. Here's a general breakdown:

• Understanding the Target Market:
  
  • If the startup already has a deep understanding of its target market and buyer personas, this can take little time.
  • If research is needed, this can take anywhere from weeks to a few months.
• Creating Content and Offers:
  
  • Whitepapers, webinars, e-books, and other high-value content pieces can take weeks to a few months to develop.
  • Blog posts and social media content can be faster, ranging from days to weeks.
• Setting Up Technology and Tools:
  
  • Tools like CRM systems, email marketing platforms, and marketing automation can be set up in days to weeks. However, their effective integration and full utilization can take longer.
  • If custom integrations or development are required, this can extend the timeframe by weeks or even months.
• Launch and Promotion:
  
  • Once everything is set up, launching campaigns through paid media, organic channels, partnerships, or events can range from immediate to a few months, depending on the complexity of the campaign.
• Optimization:
  
  • Demand generation is not a "set it and forget it" endeavor. As data comes in, time should be allotted for reviewing analytics, understanding lead quality, and refining strategies.
  • The initial optimization phase might take a few months post-launch. Continuous optimization should be ongoing.
• Capturing Relevant Leads:
  
  • The time it takes to start capturing leads after launch can be immediate for some businesses, especially if they tap into a pre-existing demand or if they have a strong promotional push.
  • For others, it might take months of building brand awareness and refining targeting.

Given these factors, it's reasonable for an early-stage B2B startup to expect anywhere from a couple of months to over a year to effectively set up and optimize a demand generation funnel, depending on the complexity of their offering, the clarity of their target market, and the resources they have available. While leads may start flowing in shortly after the initiation of the process, the quality and volume of those leads might require iterative refinement over time.

However, remember that while capturing leads is crucial, it's equally important to ensure the downstream processes (lead nurturing, sales follow-up, etc.) are in place to maximize the value of those leads.

Demand Gen, or Demand generation, is a fully defined marketing function with marketers who specialize exclusively in it. 

SaaS is, obviously, also its own thing; companies that sell SaaS operate under specific constraints that other markets don’t necessarily share.

It’s not surprising that the intersection between Demand Generation and SaaS would have particular characteristics

• SaaS sales cycles are often B2B, and usually long and take place over weeks or months
• SaaS deal with accounts, not individuals
• B2B SaaS products are often built by people who don’t have a  

‍Are you an early-stage startup? Are SaaS Demand Gen funnels relevant to you?

Fundamentals of Demand Generation:

• Definition: Start by explaining what demand generation is and its importance for SaaS startups.
• Differentiation: Clarify the difference between demand generation and lead generation. While lead generation is about collecting contact information, demand generation is a holistic process aiming to build awareness and interest in the product.

• Understanding the Buyer’s Journey:
  
  • Stages: Introduce readers to the various stages a buyer goes through – Awareness, Consideration, and Decision.
  • Mapping Content: Discuss how SaaS startups can tailor content to each stage, guiding potential customers through the funnel.
• Key Metrics for SaaS Startups:
  
  • Importance: Emphasize why monitoring the right metrics is crucial.
  • Key Metrics: Discuss metrics like MRR (Monthly Recurring Revenue), CAC (Customer Acquisition Cost), LTV (Lifetime Value), Churn Rate, and how they're interlinked with demand generation efforts.
• Challenges in SaaS Demand Generation for Early-stage Startups:
  
  • Budget Constraints: Many early-stage startups operate on tight budgets, making it challenging to invest heavily in marketing.
  • Finding Product-Market Fit: The evolving nature of the product might mean that the target audience isn't well-defined initially, affecting demand generation strategies.
  • Trust Building: Gaining trust without an established brand name or extensive user testimonials.
• Optimal Channels for Demand Generation:
  
  • Inbound Marketing: The benefits of content marketing, SEO, and social media in creating organic interest.
  • Partnerships: How partnering with established brands or complementary services can boost credibility and drive demand.
  • Free Trials & Freemium Models: Discuss how offering a taste of the product can act as a powerful demand gen tool.
• Feedback Loop and Continuous Optimization:
  
  • The Importance of Feedback: In the early stages, gathering user feedback is crucial not just for product development but also for refining marketing strategies.
  • Iterative Approach: Highlight how demand generation for SaaS startups isn't a set-and-forget endeavor. Strategies should evolve based on results, user feedback, and market changes.

Building a B2B SaaS demand generation funnel isn’t about chasing quick wins, it’s about laying the foundation for long-term, scalable growth. For early-stage startups, the journey from awareness to revenue is a learning process that requires patience, clarity, and constant iteration. By understanding your audience, investing in educational content, and designing a funnel that aligns with how today’s buyers actually make decisions, you’ll set yourself up to attract not just more leads, but the right ones, leads that convert and stick around. Demand generation isn’t a mystery; it’s a mindset shift. One that, when done right, turns marketing from a cost center into a growth engine.

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