Definition: in marketing, Effective Demand is the set of all the people who are looking for a product/service or a solution to their problem/desire at a given time.
When intercepting new potential customers, the first question you have to ask you is: “Is there anyone already looking for the product/service I am selling or the problem that my product/service can solve?
I have analyzed over the years the concepts of Effective Demand and Latent Demand to systematize them inside the ConnectionFunnel®, together with my friend and colleague Alessandro Sportelli.
The ConnectionFunnel® is a working method developed in 15 years that we use to elaborate the best web marketing strategies for any company or professional. The method is always the same — it is the declination of the strategy that is different and depends on the analysis of the buying process of your target.
If you want to know more about the ConnectionFunnel® Method, click here.
In 2016, we collected and further analyzed the concepts of Effective Demand and Latent Demand within the book “Il Succo del Web Marketing” (published by Libreria Strategica). The aim of the book is to make entrepreneurs aware of a complex world — that of web marketing — which is not always easy to understand. Strategic web marketing is an opportunity to be seized, but first of all you need to understand the basics.
Since 2018, “Domanda Consapevole” (Effective Demand) is a registered trademark of WMI srl.
Speaking of Effective Demand, we refer to active users who, in the search for a product/service or a solution to a problem, express an intention, i.e. carry out a conscious action in response to a stimulus.
The Effective Demand can be of 3 types:
It is important to take care of your own direct and indirect positioning (direct — website, Facebook page, YouTube channel, Google My Business, etc.; indirect — other people’s websites/e-commerce, review sites, comparators, etc.). The goal is to make sure that the user comes to us, any result he or she clicks.
Intercepting those who are looking directly for us is obviously important because it often leads directly to the sale.
In digital marketing, intercepting Effective Demand means implementing various actions that allow us to identify who is already looking for our product/service or the problem it can solve.
The first question you have to ask yourself is: “Are people looking for my product/service or the problems it can solve?”. This will help you assess, among other things, the importance of your site’s ranking on search engines. Positioning only makes sense if there are people looking for that specific product/service or the problems it can solve.
Speaking of specific contents, these should be produced with the aim of positioning them on search engines that people use to search online.
Being placed on search engines for searches related to your product/service or the problem that this solves means being found by users at the right time, that is when they are looking for what you sell.
N.B. if for your industry there are also specialized portals used by your potential customers as search engines, you have to take them into account and evaluate if and how important it is that you are also among the results of those portals (for example: Amazon, Booking, TripAdvisor, Immobiliare .it, Trovaprezzi, ecc).
You can intercept two types of demand: Effective Demand and Latent Demand.
Latent Demand is the exact opposite of Effective Demand, i.e. it refers to that set of people who are not directly looking for a product/service at a given time, but may need or be interested in it based on personal characteristics (profession, problems, tastes, hobbies, etc.). In this case, we can define the attitude of the potential customer as passive.
However, it is important to underline that stimulating the Latent Demand can give rise to a new Effective Demand. After discovering us — on Facebook, Instagram or on a flyer, etc.), the user can express interest in our product/service and start searching for it on search engines.
This also happens as a result of the actions of other people: if a friend of mine buys a product, I could start to be interested in that product too and start looking for it to get some information or to buy it.
If you want to learn more about the concept of Latent Demand, click here.