Lead Generation vs. Demand Generation: What’s the Difference?

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Wednesday, April 1, 2020

Due to their obvious similarities, the terms are often used incorrectly or interchangeably. However, both strategies also have very different goals and methods, and understanding the difference is important for any successful marketing strategy.

Article 5 Minutes

The difference between lead generation and demand generation can be confusing. Often shortened to “demand gen” and “lead gen”, both tactics share similar traits:

  • Both are integral to B2B marketing
  • Both provide value to your customers
  • Both can be used to support business growth
  • Both can be utilized to boost leads, conversion and customer satisfaction

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What’s the difference between lead generation and demand generation?

The reason why it’s crucial for companies to know the differences between demand gen and lead gen is the danger of missing out on leads or wasting marketing budget. Making a clear distinction between the two will help you deliver more effective, targeted and gainful campaigns.

Lead generation falls under the demand gen umbrella, and this may be where many marketers are getting their wires crossed. But it’s actually a very specific subset of the demand generation process, needing its own specialist tactics to be carried out. 

While demand generation’s main goal is to create awareness and attract people to your business, lead gen focuses on turning those people into qualified leads, preparing them for the next step in the sales funnel. 

Before we go into each strategy in more detail, let’s have a look at the main and obvious differences.

Demand generation in more detail

Marketers should consider demand generation to be the whole picture, and lead gen to be one element of the wider demand gen function. It is the process of creating awareness and demand for your company’s product or service. So the focus here is getting your brand name out there and drumming up interest in what your company has to offer.

In short, demand generation is bringing new visitors to your website or business. The end goal is to build your target audience, get them talking or thinking about you, and establish trust with them through carefully planned interactions and content.

The types of content that are typically used include:

  • Blog posts or informative articles
  • Resource pages or resource hubs
  • Infographics
  • Videos
  • Social media posts
  • Press releases
  • Interviews
  • Case studies

All of this content is provided for free, without any commitment or obligation from the reader or user. This means that there shouldn’t be any data capture in place and no contact details have to be provided to access the content.

The purpose behind this kind of content is to raise the profile of your company or brand, and to draw attention to the products and services you can offer. Through carefully crafted content pieces, you can build trust and make a connection with your target audience, encouraging them to come to you. Inbound marketing tactics are key here, ensuring an organic and meaningful exchange with multiple touchpoints.

Lead generation in more detail

Lead generation requires a very specific skillset as it’s all about converting early interest into leads, and guiding those leads through the funnel. This supports the entire demand generation function, making sure you get the most out of your campaigns.

It can be described as a way to funnel through eventual purchasers of your product or service, with its core purpose being the capture of personal data. Lead generation tactics are used to get names, email addresses and telephone numbers for your sales team, in a hope that some of these people will turn into qualified leads. Therefore, gated content is a priority here – this means people have to sign up or share their contact details in order to download or receive a piece of content.

Types of lead generation content include:

  • eBooks
  • Whitepapers
  • Research papers
  • PDF guides
  • Cheat sheets or checklists
  • Product demos and free trials
  • Online courses
  • Viral contests
  • Email subscriptions

Running both strategies together

What’s important to note about demand gen and lead gen is that they are both vital to your B2B marketing strategy. They are designed to work well together, with lead generation supporting the work completed by demand generation.

Some companies may focus on lead generation as a way of getting email addresses and contacts, and this is often due to putting a big focus on their sales and trying to hit targets. However, the best approach is to deploy both, because you can’t generate leads to your full potential or in a sustainable way if there’s no demand in the first place. People have to know who you are and what your products/services are about.

In the same vein, demand generation needs the extra push of lead gen – otherwise, all the hard work to get people interested in your brand could lose its value if you can’t translate that into leads.

Paving a way forward in B2B marketing

Harmonious demand and lead generation requires a good understanding of best practices. The most successful strategies acknowledge the need to generate leads at different stages of the buyer journey, not just at the top of the funnel. So the two practices need to be tightly woven in order to encompass multiple touchpoints.

In addition to this, lead nurturing needs to take place once leads are generated. This is as important as generating them in the first place. According to Forrester, lead nurturing generates 50% more qualified leads at 33% less cost – making it essential for any business.

While demand generation can be used to raise awareness and lay the foundation, and lead generation can be used to turn interest into workable leads, lead nurturing is the next step that follows. And all three need to be continuous in their deployment, supporting each other in creating successful campaigns that bolster company sales.

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