Lead generation vs. demand generation: key differences

Methods, goals and tactics behind two highly effective marketing strategies.

Since the beginning of commercial marketing in the mid-19th century, marketers have come a long way. Every day, new strategies and methods are being defined and key concepts are coined. To effectively pursue core competencies in their field, marketing professionals need to gain a clear understanding of these terms. On the menu today: demand generation and lead generation.

Two crucial terms in 21st-century marketing are demand generation and lead generation. However, many marketers use them interchangeably. Although they share similar features, the goals and tactics behind each method differ. Let’s get crystal clear on the difference between these two types of ‘generation’, and why you should invest in both.

What is demand generation?

Demand generation is a marketing strategy that focusses on generating brand awareness and creating demand for your product or service. It’s a holistic approach that entails every stage of the buyer journey: from awareness and consideration to decision.

Ideally, demand generation involves giving value to your target customers in the sales stage they’re in. By providing them with relevant information or valuable experiences, they become aware of your solution and learn how it can help them solve their unique problems. That way, you can build a target audience, establish trust and spark interest in your company.

“The buyer journey is nothing more than a series of questions that must be answered.”

– Michael Brenner, CEO Marketing Insider Group

Demand generation tactics

So, how do you create value through every step of the customer journey? Like the renowned author Michael Brenner said: “The buyer journey is nothing more than a series of questions that must be answered.” That’s where content marketing comes in. Compelling content marketing provides answers to the questions potential buyers are looking for.

By answering customer questions in a clear and honest way, you emerge as a thought leader in your field and gain credibility. Types of content in the demand generation stage are usually: blog posts or articles, resource pages, infographics, social media posts and so on.

What is lead generation?

A subset of demand generation, lead generation has a narrow focus on the top of the funnel. It’s a marketing strategy aimed at converting potential customers into qualified leads. The goal of this marketing strategy is simple: getting target audiences ready for the next step in their customer journey.

To convert leads into customers, companies usually rely on collecting information that can be used to qualify them. The end result is to find sales qualified leads for your company so that they then be followed up by a lead nurturing process or their contact information can be handed over to sales.

Lead generation tactics

Just like demand generation, lead generation strategy revolves around content marketing. But while demand gen focusses on creating free content to inform and inspire customers, lead gen is more exclusive.

Lead generation typically involves creating gated content and then asking for someone’s contact information or demographic data in order for them to receive that piece of content. But people don’t just give up their personal details for free. These are the most effective lead generation strategies according to the Demand Generation Report 2018:

Lead generation vs demand generation

Lead generation vs. demand generation: a comparison

Both lead generation and demand generation are fundamental parts of every marketing strategy today. Although both of them focus on providing potential customer with the right content at the right time, they entail different goals and tactics. These are the major differences between the two:

Demand generation
What?
A marketing strategy that focusses on brand awareness and demand for your product or service

When?
Through the entire funnel

How?

  • SEO-driven content
  • Search Engine Advertising
  • Social media posts
Lead generation
What?
A marketing strategy aimed at converting potential customers into qualified leads

When?
At the top of the funnel

How?

  • Gated content
  • Free webinars
  • Trials

How to get started?

Since most companies want to generate both demand and leads, it’s crucial to develop a marketing strategy that includes lead gen tactics as well as demand gen tactics. But combining these different tactics is a challenge. You need to get them to work in tandem to create a holistic customer experience. Keeping track of the tone of voice and key messages throughout various stages is essential to your success. Mindlessly producing blogs and whitepapers doesn’t make sense in a content-heavy world: you need a global strategy that encompasses every step along the customer journey.

So, take a piece of paper and start defining goals, strategies and tactics. Or give us a call. We’d love to run you through the possibilities.

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We help organisations realise their marketing-communication objectives and adopt long-term marketing strategies. With strategy at our core, we focus on brand development, content creation and demand generation.

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