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 demand generation is
- What lead generation is
- Demand generation vs. lead generation
- How demand gen and lead gen work together to form a strategy
- Balancing lead generation vs. demand generation
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 content. These assets focus on making your logo, product, or company name synonymous with the sector you operate in. Microsoft Excel is a prime example. While there are several spreadsheet software solutions on the market, most spreadsheet users refer to these organizational tools by this well-known brand name.
- Thought leadership content. These pieces are designed to differentiate your brand from other businesses in your niche. This type of content should establish your expertise and demonstrate that your organization is a trusted source of authority. For example, Deloitte and its Insights blog library establish the firm as a thought leader within the analytics and research space.
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
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.