Stop Fighting for Everyone Else’s Customers and Generate New Demand

In a misguided attempt to achieve market dominance (or something similarly vague that sounds impressive), many businesses obsess over capturing immediate demand—those actively seeking a solution. While this strategy can yield short-term gains, it leads to brutal competition, commoditization, and stagnation. 

A better way to sustainable growth lies in identifying and igniting latent demand: the unmet, unarticulated needs of consumers who have yet to realize they require a solution. This approach does not merely follow market trends; it creates them.

Decoding Latent Demand

Latent demand refers to consumer needs that exist beneath the surface—unrecognized problems awaiting discovery. Rather than competing for a finite pool of in-market customers, businesses that awaken latent demand can expand their audience, drive innovation, and capture long-term loyalty.

Take the automobile. Before its invention, consumers relied on horses and carriages, never questioning the status quo. Harvard Business School has extensively analyzed how disruptive innovations, such as automobiles and smartphones, reshape industries by tapping into unspoken consumer desires. Henry Ford’s introduction of mass-market automobiles didn’t respond to existing demand—it created it. The same holds for personal computing, smartphones, and streaming services. The most disruptive innovations don’t simply meet needs; they reveal them.

You didn’t “know” you needed a smartphone. You didn’t “know” you needed streaming services. But innovative engineers, thinkers, and marketers did. Remember when Apple used to say “Think Different” as a tagline?

It wasn’t just a tagline. It’s how the company did – and does – business. 

The Perils of a Demand-Only Focus

Companies that exclusively chase existing demand face structural weaknesses that limit their growth potential:

• Commoditization and price wars: Competing for the same customers drives marketing costs up and margins down, reducing businesses to interchangeable commodities. Nobody wants to go back to that – at least the folks who remember what it was like. 
• Market saturation: The finite number of in-market buyers imposes a ceiling on growth, forcing businesses into a reactive, zero-sum battle for customers. A sponge can only hold so much water; when it’s full, it’s full. 
• Strategic vulnerability: Companies dependent on existing demand are highly susceptible to shifts in consumer behavior and market disruptions.

SEMRush highlights how businesses that fail to recognize emerging demand trends often succumb to price wars and stagnation. History offers ample evidence of companies that failed to anticipate shifting demand. Blockbuster, for instance, focused on optimizing physical rental stores while Netflix identified and cultivated the latent demand for on-demand digital streaming. Kellogg School of Management has documented similar missteps in industries disrupted by digital transformation.

The Competitive Advantage of Creating Demand

Companies that tap into latent demand enjoy decisive strategic advantages:

• Market expansion: By educating consumers on new possibilities, businesses unlock entirely new customer segments, mitigating reliance on existing markets.
• First-mover authority: Those who introduce solutions to unrecognized problems define the category and shape consumer perceptions, making competitors play catch-up.
• Sustained growth: Engaging customers before they become buyers cultivates long-term loyalty and brand affinity, ensuring a steady influx of future demand.

HubSpot underscores how demand generation strategies can transform market positioning, enabling brands to dictate industry narratives rather than react to them. Apple’s creation of the tablet market is a prime example. Before the iPad, consumers were not clamoring for a device between a laptop and a smartphone. Apple defined the use case, and in doing so, established itself as the dominant player in a category that barely existed before.

Strategies for Igniting Latent Demand

1. Educate and Challenge Assumptions

Customers may not be aware of their problems until you articulate them. Through thought leadership, content marketing, and strategic storytelling, companies can challenge existing norms and introduce new perspectives.

Tony Ulwick, in the Harvard Business Review, describes how the Jobs-to-Be-Done framework helps businesses uncover latent demand by focusing on what customers are trying to achieve rather than what they explicitly request. Tesla, for instance, didn’t just sell electric cars; it reframed consumer expectations about sustainability, performance, and innovation. By educating the market, Tesla turned an overlooked category into a premium aspiration.

2. Pioneer Product Innovation

Creating demand requires products that don’t just compete—they redefine the category. Airbnb didn’t compete with hotels on price; it introduced an entirely new way to think about accommodation. Uber didn’t just offer another taxi service; it changed the way people conceptualized urban mobility.

Investing in research, product development, and consumer psychology allows companies to anticipate needs before they emerge. MIT Sloan emphasizes that companies pioneering category-creating products consistently outperform those that merely optimize existing offerings.

3. Provoke Curiosity with Strategic Awareness Campaigns

Effective advertising doesn’t just inform; it inspires curiosity. Apple’s iconic 1984 Super Bowl ad didn’t sell a product—it challenged the status quo. SEMRush advocates for experiential marketing and problem-awareness campaigns to introduce consumers to unfamiliar solutions.

Demand Generation Versus Demand Capture

A comprehensive strategy harmonizes both demand generation and demand capture. While capturing existing demand fuels immediate sales, generating new demand secures long-term market relevance.

Demand Damming: Redirecting Existing Demand to Your Brand

In addition to generating new demand, companies can strategically intercept demand intended for competitors— a tactic known as demand damming. This approach involves capturing market attention at key decision-making moments and shifting consumer preferences toward your brand.

Key tactics include:

• Comparative advertising: Highlighting your unique advantages over competitors to sway undecided buyers. Harvard Business Review emphasizes the effectiveness of competitive positioning in brand switching.
• SEO Conquesting: Targeting competitor-branded keywords in paid and organic search results to divert traffic.
• Retention and upselling: Strengthening customer relationships to prevent churn and maximize lifetime value.

Companies like T-Mobile have successfully implemented demand damming by directly calling out competitors in marketing campaigns while offering superior service benefits. (Hey, Verizon – can you hear them now?) By strategically redirecting demand, businesses can erode competitor market share while strengthening their own positioning.

The Future Belongs to Demand Creators

Harvard Business School and Kellogg School of Management emphasize that leaders who shape demand—rather than chase it—achieve sustainable differentiation. 

Our approach at RefractROI starts with fully understanding your current marketplace, so that together we can create your ideal marketplace. Get in touch with us for a no-obligation strategy call to take a look at your present and talk about the type of future you want for your brand. With smart strategy and precise tactics, you can capture in-market customers while creating the right conditions for future prospects.