Learn the difference between demand generation and lead generation

Learn the difference between demand and lead generation

In a competitive environment, it’s critical to have a strong strategy for developing customers. Crafting such a strategy requires a comprehensive understanding of demand generation and lead generation, both of which are key parts of the B2B sales process.

Due to their similarities, demand generation and lead generation are often confused with one another. However, understanding the differences between the two concepts can help you use them together to build a cohesive, impactful B2B sales strategy, enhancing your customer acquisition pipeline and helping your business grow.

In this article comparing demand generation and lead generation, we’ll cover the following topics:

What is demand generation?

Demand generation is the systematic process of creating brand awareness and driving interest in a company’s suite of products or services.

Generally, demand-generation strategies focus on building awareness of a business challenge or pain point, supporting prospects’ decision-making processes, and establishing the organization as a forward-thinking entity.

Showcasing your business as a thought leader and problem-solving force through a demand-generation strategy can give B2B prospects the guidance they need to make more pragmatic purchasing decisions. A well-designed demand-gen campaign will also build your brand authority and answer the question of how your company is a solution to the challenge the client is facing.

While there’s a variety of ways to construct your demand-generation strategy, using free resources is one of the best approaches. You can incorporate social channels like LinkedIn and organic search engine optimization tactics into your game plan.

When building your strategy, make sure you target a broad audience, as doing so increases your reach and can help you maximize brand awareness. Ensure that all content is tonally consistent and clearly showcases your product and the specific void it fills.

Two of the most common types of demand-generation content are brand awareness assets and thought leadership pieces:

Brand awareness assets and thought leadership pieces are common demand-generation content

What is lead generation?

Lead generation is the process of identifying and nurturing prospective clients for your organization.

Often, it involves acquiring someone’s contact information and name when they express cursory interest in your service or product. An effective lead-gen strategy prepares a prospect to speak with a sales rep by increasing interest levels as they progress along the customer journey.

Crafting an effective lead-generation strategy will help your organization nurture prospects consistently and transform them into sales-qualified leads. A sales-qualified lead is a potential client with developed purchasing intent and a high degree of interest in your product. These vetted leads are much more likely to make a purchase, meaning you’ll experience better sales volume and higher conversion rates.

One of the key differences between lead generation and demand generation is that the former is much more focused. Instead of casting a wide net, you should target specific prospects based on their actions and level of interest.

There are several ways to go about generating leads — for example, by publishing gated content, which requires users to provide their contact information in exchange for access to your content. You can also feature a “Contact Us” form on your website and include links to this form on your landing pages.

Other methods include publishing SEO content to drive traffic to your site, running paid ad campaigns on social media and Google, and incorporating CTAs throughout your webpages.

Two of the most common examples of lead generation in action include gated content and social media platforms.

Gated content should be more in-depth than the average blog, as you want to entice audience members to provide their contact information. Some content you should consider gating includes webinars, eBooks, reports, and case studies.

As for social media, you can publish intriguing posts and link out to your latest content, which should include a few strategically placed CTAs.

Demand generation vs. lead generation

Demand generation is focused on the top of the funnel, while lead generation is focused on the bottom

While the differences between demand and lead generation are nuanced, there are enough of them to draw a clear distinction between the two concepts.

Most notably, demand generation is a precursor to lead generation. Demand gen focuses on growing your audience and creating prospects. Once that’s been done, lead generation takes over and converts those prospects to customers.

Demand generation is a top-of-funnel strategy that involves marketing to a broad audience to capture the greatest number of leads possible. At this stage, audiences are primarily looking for information, so your content must be informative, educational, and digestible. Creating such content will help you grow your audience, attract general-interest visitors to your site, and build trust.

Whereas demand generation is designed to feed potential leads into the funnel, lead generation draws them deeper into it to achieve conversions.

Because of this shift in focus, lead generation is categorized as a bottom-of-funnel marketing strategy. Lead generation captures audience contact information, creates connections with prospects, and nurtures them into customers.

It’s worth mentioning that this story is one of complementary methodologies, not overlapping ones. Demand generation introduces potential clients to your brand and gives your sales and marketing teams a chance to win them over. Lead-generation techniques, meanwhile, carefully nurture prospects by speaking to their unique pain points, building trust, and establishing your service or product as the solution the client has been searching for.

How demand gen and lead gen work together to form a strategy

Lead generation is often the fruit of effective demand generation. If you can’t generate adequate interest in your products and services or capture contact information, your sales and marketing teams won’t have any prospects to nurture.

Conversely, if you have a robust demand-generation strategy in place but your lead-gen capabilities are lacking, the majority of prospects will exit the sales funnel before reaching the conversion stage.

If you want to achieve synergy between your lead-gen and demand-gen strategies, you can’t create them in a vacuum. Instead, you should start by developing a fundamental understanding of your target audience and their needs, preferences, and challenges.

Whereas demand generation is designed to feed potential leads into the funnel, lead generation draws them deeper into it to achieve conversions.

You can accomplish this by conducting extensive research, developing ideal customer profiles, identifying each type of prospect’s pain points, and proactively working to remove purchasing barriers from the sales funnel.

Once you know precisely who you’re trying to reach, you can develop complementary demand-generation and lead-generation strategies that play off of and reinforce one another.

Your demand-gen assets should educate prospects, drive engagement, speak to pain points, and establish or define a business challenge. The opportunity to solve this challenge is what will prompt potential clients to submit their contact information.

Once you’ve generated demand and acquired leads, it will be time to start nurturing prospects. This means establishing your product as the solution to the problem you framed in your demand-gen campaign. Use empirical evidence, quantifiable data, and sales tactics to win over prospects and draw them to the bottom of the sales funnel.

To gauge the efficacy of your efforts, you’ll need to select and monitor several digital marketing key performance indicators (KPIs). These metrics will reveal what you’re doing right, which aspects of your strategy are falling short of expectations, and how you can improve future demand and lead-gen campaigns.

Balancing lead generation vs. demand generation

Demand generation is meant to establish a brand presence and frame the problem you intend to solve via your products or services. An effective demand-generation strategy will create a sense of intrigue in the minds of your audience, encourage them to connect with your brand, and provide your marketing team with leads.

Lead generation is the process of actually collecting customer contact information and forming relationships with them. A lead-gen strategy must include clearly defined sales actions to nurture prospects and draw them through the various stages of the funnel. Failing to form a connection with leads can cause them to exit the funnel prior to a conversion.

When developing or refining your sales strategy, begin by exploring ways you can generate demand. You should strive to establish yourself as a thought leader through carefully constructed content. Then, you can generate leads by translating engagements with content into potential customers.

You must use demand generation and lead generation together to become a solution in the minds of your customers. However, to achieve proper alignment between demand gen and lead gen, you need the right set of tools.

Adobe Marketo Engage uses artificial intelligence to interact with customers at all points of the sales pipeline, from awareness to conversion. Adding this innovative and intuitive platform to your marketing workflow can help you cultivate strong relationships and nurture leads into loyal customers.

Watch an overview or take an interactive product tour to learn more about what Adobe Marketo Engage can do for your demand-generation and lead-generation strategies.