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Demand generation vs. lead generation: What’s the difference? Blog Feature

Kristen Harold

Director of Demand Generation, 10+ Years of Digital Marketing & Lead Generation Experience

October 21st, 2019 min read

Demand generation vs. lead generation

If you're a digital marketer, it's likely you've heard the terms “demand generation” and “lead generation” thrown around.

It's gotten to the point where some are quick to say there is no difference between the two terms. Someone will ask, "What is demand generation?"

And someone else will be quick to reply, "Nothing new! We're just rebranding lead generation with a shiny new term."

But that's not an accurate assessment.

On the surface they both entail building a relationship with a prospect and bringing them through the sales cycle. The difference is that demand generation is about more than just capturing a lead, it’s about building awareness and interest.

Whether you’re a seasoned marketer or just starting out, you may be trying to figure out what strategy is right for your business. It’s best to take a step back and start with the basics of each to understand how demand generation and lead generation can be used on their own and how powerful they can be together. 

What is demand generation?

Demand generation is an approach to marketing that is designed to build awareness and drive interest in your products or services. It can incorporate elements of inbound marketing, social media marketing, content and other marketing practices.

Demand gen brings together multiple marketing approaches to reach customers at various touch points throughout the buying journey with content that's going to make them feel like they need your product or service, and that will build a relationship with these potential customers over time. 

Sometimes people confuse demand gen and inbound marketing — as they share some core similarities. For each, you’re creating relevant, valuable content and putting it in places where your customers are already conversing. However, inbound marketing is really just one tactic of an overall demand generation strategy.

In practice, demand gen is a complex process aimed at a specific goal. Just like with inbound marketing, demand gen begins with understanding who your buyers are and where they exist online. You want to know what problems and pain points they have, and how your company can help solve them.

However, demand gen expands beyond inbound marketing.

Demand gen brings together multiple marketing practices like content marketing, email marketing, social media, PR, and advertising to reach customers where they already exist on and offline, and delivers relevant messaging or information at the right point in their sales journey. One of the most important aspects of demand gen is that it is designed to bridge the gap between marketing and sales.

All of these practices, together, create need and demand for your product or service.

What is lead generation?

If demand generation is creating the want or need for your product or service, lead generation is then qualifying the people that you’ve attracted, leading them through to purchase.

With lead generation, you’re creating content or marketing campaigns designed to capture a prospect’s contact information through things like gated content, lead forms, or newsletter sign-ups.

For example, you might be looking to generate more business for a particular service your business offers. One way to accomplish this would be to create gated content on your website. This would include things like e-books, white papers, or workbooks that would be of value to your ideal customer.

By creating something of value, you’re giving an incentive to that prospect to give you their contact information. To build awareness of that piece of gated content, you can boost your reach by running paid ads promoting it to your target audience. This would be a basic example of lead generation. 

However, the best tactics involve an integration and alignment between your demand gen and lead gen efforts.

How do demand gen and lead gen complement each other?

A great demand gen strategy should be driving leads. But, when you’re strategically combining demand gen with lead gen tactics, that’s when you’re going to get the most qualified leads that are most likely to convert. 

If you’re running demand gen tactics like social media conversations, content marketing, or free, ungated content without also strategizing a way to ultimately capture a lead, your sales goals won’t ever be met. The same can be said if you’re placing a lead capture form on your website without any plan for attracting potential customers to it. 

But if you’re strategically placing a lead magnet or form on a page that you that you’ve driven a prospect to from your demand gen campaigns — and now there’s a very enticing download that is going to help that person, that’s a more targeted strategy. 

Now, you’ve started to build awareness and trust with that person through demand gen and are delivering value to them in the form of exclusive content in exchange for their contact information.

Let's take a look at an example

Say as part of your marketing strategy you started a weekly YouTube series focused on your area of expertise

You know this series will hit on problems your ideal customer might be faced with, so the content will be relevant and helpful to them. The series itself is designed to show your expertise and therefore let that viewer know you can help them. Now you’ve attracted them to your brand and started to build trust.

Within the videos or in the caption, you might include additional resources that you’ve developed, like e-books, articles, or guides. Now you’ve given that user a reason to come to your website and learn more, increasing the trust and building the relationship. 

If you notice, you haven’t yet asked for contact information.

Within the pages you’re leading them to from YouTube, you can start to include calls to action for things like gated content where the information is more exclusive, detailed, and valuable.

By attracting the customer and starting to build trust with them first, now you can capture their contact information, knowing that this is likely from a more qualified lead

THIS is demand generation and lead generation working in tandem.

The best strategy for growing your business

The best marketing strategies look at the big picture.

If your company is running a demand generation strategy, your marketing team needs to be thinking through every step of the sales cycle. How will you attract attention? How will you build trust with a potential customer? What value can you offer in exchange for that customer's contact information? And ultimately, how will you use that contact information appropriately to continue to build a relationship as you nurture that customer through to a sale? Any business looking to grow needs to take all of this into account. 

In the marketing world of 2020 and beyond, many of the most dynamic, forward-thinking companies are embracing this model to grow their business, build relationships with customers, and become thought leaders in their space. 

 

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