B2B demand generation: Why traditional funnels are dead

B2B marketing has a problem. We’re stuck in the past, optimizing for metrics that don’t matter while our prospects have moved on.

The traditional B2B funnel is broken. You know the one – gated content leading to MQLs, followed by nurture emails and sales outreach. This approach assumes that downloading an ebook signals buying intent. It doesn’t.

Most marketing teams have optimized for marketing qualified leads (MQLs) for years, believing that contact information left behind for a white paper or infographic indicates genuine interest in their product or service. This false assumption has led to wasted resources, frustrated sales teams, and missed revenue opportunities.

Let’s kill this outdated model and replace it with something that actually works.

In-market vs. not in-market: The only segmentation that matters

Forget awareness, consideration, and decision. Your prospects exist in just two states:

1. In-market (roughly 3% of your total addressable market)
2. Not in-market (the other 97%)

This isn’t theory. Data from Gartner and Harvard Business Review shows that 85% of buyers establish purchase requirements before contacting sales, and 80% have a set of vendors in mind before doing any research. More critically, 90% will ultimately choose from that initial list.

The implications are clear: by the time a prospect reaches out to you, they’ve largely made up their mind about which vendors they’ll consider. If you’re not already on their radar, you’re fighting an uphill battle.

Your job isn’t to push people through a funnel. It’s to be on that shortlist when they enter the market.

Demand generation vs. demand capture

This two-state reality creates two distinct marketing approaches:

Demand capture: Targeting the active 3%

Demand capture is a marketing approach focused on intercepting prospects who are actively looking for solutions like yours. This includes:

• Search advertising: Being present when prospects search for solutions in your category
• SEO for high-intent keywords: Ranking for terms that indicate buying intent
• Comparison website profiles: Maintaining strong profiles on G2, Capterra, or industry-specific review sites
• Conversion rate optimization: Ensuring your website converts visitors into leads
• Strategic direct outreach: Reaching out to prospects showing buying signals

Demand capture is essential but highly competitive. You’re fighting for the attention of a small percentage of your market against every competitor in your space.

Demand generation: Building preference with the 97%

Demand generation focuses on creating demand among prospects who aren’t currently looking for your solution. This includes:

• LinkedIn content: Consistently sharing valuable insights (organic and paid)
• Other social platforms: Meeting your ICP where they spend time
• Newsletters: Regular, value-driven communication
• Podcasts: Building authority through long-form content
• Educational content: Helping prospects understand their problems better

Demand generation isn’t about immediate conversion. It’s about building familiarity, trust, and preference so that when prospects enter the market, you’re already on their shortlist – ideally at the top.

Most companies over-invest in demand capture while neglecting demand generation. They fight for the small percentage of in-market buyers instead of building preference with the much larger group who will eventually enter the market.

Defining your ideal customer profile (ICP)

Effective demand generation starts with a clearly defined ICP. This isn’t just demographics – it’s a deep understanding of who you serve best and who finds the most value in your solution.

Start by answering these questions:

• What are the characteristics of your most profitable clients?
• Which customers can you serve best?
• Which clients are most enjoyable to work with?

Often, the answer to all three questions points to the same group of people.

Then, get specific about:

• Company characteristics: Industry, size, revenue range
• Geographic focus: Which countries or regions?
• Job roles: What positions do your buyers hold?
• Buying committee structure: Who influences, decides, and potentially blocks purchases?
• Pain points and challenges: What problems are they trying to solve?
• Goals and desired outcomes: What are they trying to achieve?
• Current solutions: What are they using now?

The more specific your ICP, the more your content will resonate and the more frequently you can reach them with the same budget. A targeted audience of 1,000 people can be reached repeatedly with a modest budget, while an audience of 1 million requires significant investment for the same frequency.

Research: The foundation of effective demand gen

Don’t guess what your ICP cares about. Know it through comprehensive research:

Qualitative interviews: The gold standard

Conduct 30-90 minute conversations with 5-10 people per ICP segment. These interviews provide invaluable insights that surveys can’t match:

• You learn their exact language and terminology
• You can explore complex topics in depth
• You can follow interesting threads that emerge during conversation
• You capture non-verbal cues and emotional responses

Always record these sessions and prepare an interview guide with open-ended questions like:

• What do you look for in a solution or provider in our category?
• What do you like or dislike about solutions you’re using now?
• What would motivate you to switch from one provider to another?
• What factors are most important when choosing a vendor?
• Who is involved in the decision-making process and what are their roles?

Channel research: Finding your audience

Identify where your ICP spends time online by answering:

• Which social media platforms do they use professionally?
• Which content creators or companies do they follow?
• What podcasts do they listen to?
• Do they read specific trade publications?
• Are there industry events they regularly attend?

This information guides where you should focus your demand generation efforts.

LinkedIn targeting research: Precision matters

LinkedIn is the primary B2B platform, allowing you to target based on business variables that other platforms can’t match. For example, targeting IT managers in companies with 50-200 employees in São Paulo creates a precisely defined audience.

Two approaches to LinkedIn targeting:

1. Standard targeting: Using LinkedIn’s built-in variables
2. Custom list uploads: Creating lists of specific companies or individuals

For account-based marketing, tools like LinkedIn Sales Navigator, Cognism, or Clay can help build targeted lists of companies and decision-makers.

The dark funnel: Why traditional attribution fails

B2B buying journeys are complex and mostly invisible. A prospect might:

• See your LinkedIn posts multiple times
• View your ads across platforms
• Listen to your podcast episodes
• Hear about you from a colleague
• Eventually Google your category
• Find your website and convert

Google Analytics will attribute this to organic search, completely missing the demand generation touchpoints that built awareness and preference over weeks or months.

This “dark funnel” – the invisible touchpoints that influence buying decisions – explains why many companies undervalue demand generation. Traditional attribution models can’t measure:

• Seeing (but not clicking) social media posts
• Listening to podcasts
• Word-of-mouth recommendations
• Ad impressions without interaction

Yet these touchpoints are often critical in building the familiarity and trust that lead to eventual conversion.

Measuring success in demand generation

Since traditional attribution fails, how do you know if demand generation is working?

Self-reported attribution: Just ask

The simplest approach is to ask leads how they found you:

1. Add a “How did you hear about us?” field to your contact forms
2. Have sales ask during initial calls:
   • Where did you first see us?
   • Which touchpoints do you remember?
   • Why did you decide to contact us now?

This qualitative data often reveals that prospects were aware of your company long before they converted, through channels that don’t show up in your analytics.

Content consumption metrics: Reaching the right people

Are the right people engaging with your content? LinkedIn provides demographic data on who’s viewing your content, including:

• Company size
• Job titles
• Industries
• Locations

This helps confirm you’re reaching your ICP rather than irrelevant audiences.

Attention metrics: Quality over clicks

For paid advertising, measure:

• Dwell time: How long people spend with your content
• Video completion rates: What percentage watch your entire video
• Engagement: Meaningful interactions with your content

These metrics indicate whether your content is resonating with your audience, not just catching their attention momentarily.

Qualified pipeline: The ultimate metric

Ultimately, the success metric is quality inbound leads – the right people from the right companies with the right problems reaching out to you. Chris Walker calls this “Hero Pipeline” – opportunities with at least a 25% chance of closing.

In SaaS, this might be high-quality demo requests. In services, it might be consultation requests from qualified prospects.

The long game: Results take time

Demand generation isn’t a quick win. It requires patience and consistent execution.

A real-world example shows the typical timeline: minimal results in the first 12 months (around 20% growth), followed by 90% growth in year two, 80% in year three, and projections for another 90% in year four. Eventually, 60% of revenue came from demand generation efforts.

What changed? Nothing. The company simply continued executing their strategy, building familiarity and trust with their ICP until they became the obvious choice when prospects entered the market.

As Alex Hormozi says, “The world belongs to those who can keep doing without seeing the result of their doing.”

This long-term perspective explains why many companies abandon demand generation too early. They don’t see immediate results, so they revert to demand capture tactics that provide quicker – but ultimately smaller – returns.

Aligning marketing and sales

Marketing and sales share one responsibility: driving revenue. When demand generation is done right, it positively impacts sales metrics:

• Increased deal velocity: Prospects who are familiar with your content move through the sales process faster
• Higher win rates: Prospects who trust your expertise are more likely to choose you
• Larger deal sizes: Prospects who understand your value are willing to invest more

Instead of competing for attribution, create shared goals. Marketing needs sales to understand customers better and close opportunities. Sales needs marketing to create familiarity and trust before the first conversation.

Signal-based outreach: Working smarter

Signal-based outreach helps sales prioritize prospects showing buying intent:

• Website visits to key pages
• Webinar attendance
• Content engagement
• Competitor research

Tools like 6sense or Demandbase can identify intent signals outside your own platforms, tracking:

• Visits to competitor websites
• Topic engagement across the web
• Content consumption patterns

This data helps sales focus on prospects most likely to be in-market, making their outreach more effective and efficient.

Building your demand generation engine

To implement effective demand generation:

1. Define your ICP with precision

Don’t try to be everything to everyone. Identify the specific segment of the market where you can provide the most value and become known as the go-to solution.

Document your ICP in detail, including firmographic information, roles, pain points, and buying process. This becomes the foundation for all your demand generation efforts.

2. Research deeply to understand your ICP

Conduct qualitative interviews to understand how your ICP thinks about their challenges, what language they use, and what factors influence their buying decisions.

Use this research to create messaging that resonates and content that addresses their specific needs.

3. Create content that demonstrates your expertise

Develop content that shows – not tells – how you solve your ICP’s problems. Focus on education rather than promotion, building trust through genuine value.

Your content should help prospects understand their challenges better and see you as a trusted advisor, not just a vendor.

4. Distribute consistently where your ICP spends time

Identify the channels where your ICP is active and maintain a consistent presence. This might include:

• Regular LinkedIn posts and engagement
• A weekly or monthly newsletter
• A podcast or guest appearances on industry podcasts
• Speaking at relevant industry events

Consistency is key – demand generation requires regular touchpoints over time.

5. Measure what matters

Focus on metrics that indicate you’re building awareness and preference with your ICP:

• Content consumption by the right audience
• Attention metrics for your content
• Self-reported attribution from inbound leads
• Quality of pipeline generated

Don’t get distracted by vanity metrics like total impressions or clicks that don’t indicate genuine engagement.

6. Be patient and persistent

Understand that demand generation is a long-term investment. Set realistic expectations with leadership about the timeline for results, and maintain consistent execution even when immediate returns aren’t visible.

The companies that win in B2B aren’t those with the biggest budgets or the most aggressive sales teams. They’re the ones that build preference before the buying process begins.

Stop chasing the 3% who are actively buying today. Start building relationships with the 97% who will be buying tomorrow.