Demand Generation vs. Lead Generation: Do You Have to Choose?

lead generation

Demand generation and lead generation are vital elements of inbound marketing strategies —quite similar but inherently different. So, how do you differentiate between the two? How do you know which one to go for?

Your choice ultimately depends on your business goals, as this article will show you.  

Demand generation is a strategy that attempts to drive interest and awareness of a service or product through many marketing channels. These could include marketing automation, email, social media, and more.

On the other hand, lead generation focuses on drawing promising leads and eventually generating sales. Usually, it will start with an interested audience that fills out a form, survey, calls, etc. 


What are the Differences Between Demand Generation and Lead Generation?

Demand gen and lead gen share a common goal: to create a better experience for prospects in the buying decision process. But they approach that goal in different ways. 

Demand generation is more of a brand awareness strategy, while lead generation focuses on turning new prospects into hot leads that could eventually buy.

The process is also a crucial phase of the sales funnel. It focuses on retaining existing customers and finding new ones. Therefore, it indirectly drives business growth and revenue by building a solid customer base.

With demand gen, you do ample research on audiences and databases to identify your key targets. You then use channels at your disposal to make your offering appealing to them. 

Key Benefits of Demand Generation

These tactics can help you:

  • Level the field with competitors

It helps you increase the demand for products or services and expand your customer base. With that, you can also convert competitors' customers to yours with the right messaging. 

  • Reach a wider audience

By highlighting the benefits of products or services with additional material, you can reach even more potential customers. That will allow your company to expand your customer base and thus grow your business.

  • Increase brand awareness

With higher awareness comes more leads and brand trust. These could lead to increased customer loyalty, retention, and referrals for your business which are critical for long-term growth.

Lead Generation

It focuses on finding prospects interested in your product or service. With a database of prospective customers, you can start the lead nurturing process to push them further down the funnel to the conversion stage.

Benefits of Lead Generation

  • Increased sales

The process helps to improve your sales by generating interested leads that are much closer to purchase. You can then focus on these most relevant prospects and increase your conversion rates.

  • Better lead quality

You want to channel your resources to leads most likely to convert. It is easier to differentiate between casual and serious audiences with lead generation strategies like inbound funnels

For example, signing up for a newsletter may show more interest than reading a blog article.

Key Strategies of Lead Generation and Demand Generation

Both processes involve creating and nurturing connections with potential customers. So, it's no surprise that you can use many tools and strategies interchangeably for both. But there are some key differences:

Information vs. Action

Lead generation tools identify leads via inbound marketing funnels like landing pages, webinars, etc. On the other hand, demand generation creates relationships and interest with potential customers through informational strategies like email campaigns, blogs, and social media.

Segmentation vs. Targeting  

Demand generation is all about numbers. With relevant data, you identify your target audience and speak to them directly. With lead generation, you now know who has buying potential and work towards bringing them into your funnel. 

Content scope

Demand generation strategies primarily aim to drive awareness. So, they are very generalized such as blog posts, social media, and other massively accessible media.

On the other hand, lead gen strategies thrive on action. So they are more in-depth content with Calls to action, Such as Webinars, eBooks, Live events, and Direct mail, among others. 

How Do Demand Generation and Lead Generation Work Together?

Both strategies work together, i.e., demand drives the interest and the traffic while lead gen filters interested prospects and starts working on making them Sales Qualified. The tactics and strategies are thus almost interchangeable.

An example:

Assuming your demand generation tactic is social media. You attract your leads through catchy but informative content and show them that your brand is available for their needs. They may continuously read your posts and do nothing.

blog reader

The next time they have a question and conduct a search, they find more of your brand's resources. Convinced that you are a great resource, they respond to your calls to action and provide their information.

Then, your lead gen tactics kick in to nurture them with more content as they move further down the funnel. Eventually, they are convinced to become paying customers. 

How to Boost Your Demand and Lead Generation Strategies?

The key to success lies in leveraging the right tools that allow you to optimize your campaigns.

Consider using automation tools

Automation tools are essential for both strategies to maximize your reach and impact while saving you costs. Some critical functions of automation for both levels include:

  • Speed up the process: Automation tools help speed up the process of creating demand or capturing data for leads. It's error-free, so it makes the process faster and more seamless. 
  • Qualify most relevant prospects: Automation tools filter prospects through lead scoring features. This way, you won’t spend time or resources on non-serious visitors.
  • Tracking sales: Automation can also help in monitoring your activities. It can help you guage how effective your tactics are in achieving the desired goals. For example, traffic numbers, signups, open email rates, etc.
  • Facilitate communication: With automation, you can easily and regularly reach more prospects. For example, email automation tools would help you create and send email sequences to keep your leads engaged constantly.

Conclusion

Both of these methods have their place in your marketing strategy. By combining both systems, you drive your brand forward and maximize your lead management outputs. So no, you do not have to choose. 

However, you should consider including marketing automation tools for the best results. An all-in-one marketing automation package will help you reap maximum ROI from your demand and lead generation strategies. Need to learn how to make this work for your business? Reach out to us today!

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About the Author

Priscilla Achieng

Priscilla Achieng is a lead Technical Content Writer at Funnelbud. A Content marketing professional by day, a passionate soccer fan by night, she also provides copywriting and SEO services for businesses of all sizes. You can find her on LinkedIn and Twitter.

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