Demand Generation vs Lead Generation

When it comes to digital marketing, understanding demand generation vs lead generation is quite simple on a basic level. In essence, demand generation is about creating a desire for your products and services. Lead generation is about generating leads. These may be email leads for email marketing or sales leads for your sales team.

It is only when we get into the specifics of combining demand generation and lead generation that it gets a bit more complicated. This is especially true when it comes to crafting B2B marketing strategies and generating qualified leads for high-ticket items.

Demand generation in a B2B setting

B2B demand generation can be easily interpreted as the action of creating demand for your brand by using B2B marketing techniques. The goal is to increase the likelihood that those qualified businesses will be interested in your offerings and choose your brand for cooperation and doing business.

Compared to lead generation, demand generation requires more effort. If your goal is high-performing demand generation, you have to use all of the B2B marketing activities that generate interest and awareness. An ideal strategy will generally be a mixture of inbound and outbound marketing activities. The ultimate goal being to achieve brand awareness, while increasing profits.

These are the most commonly used tactics to generate demand
  • Content marketing
  • Lead nurturing via marketing automation
  • Lead scoring
  • Paid advertising
  • Program measurement and optimization
  • Sales/marketing alignment activities, such as sales enablement
  • Social media marketing
  • Website and inbound marketing

An ideal strategy will generally be a mixture of inbound and outbound marketing activities.

Lead generation

Lead generation can also be seen as a subset of demand generation. It focuses on driving awareness, while at the same time increasing the number of leads through quality marketing. Again, this can refer to capturing email leads or generating sales leads.

Depending on your industry, there will be different ways in which you can attract the kinds of leads that qualify for your offerings. However, based on our experience with large businesses, we can safely say there are some methods that are universally beneficial.

Consider, for example, quality content marketing. Whatever your industry, the best way to demonstrate that you’re an authority in your field is to produce high-quality authoritative content. This is a point at which demand generation and lead generation converge.

Quality lead generation content can and should serve a double purpose. Aside from acting as a vehicle to generate leads, it would ideally also serve to generate demand for your services or products. Quality content can do both, and the formula is quite simple.

  1. Produce high-quality content that targeted businesses will find valuable. This will demonstrate that you’re an authority on the subject.
  2. When creating the content, try to subtly weave in some aspects about how your own offerings help solve some of the discussed pain points in this content. This will serve to generate the demand.
  3. Craft and include a call-to-action that turns a content consumer into a lead. This may be asking them for their email address, a phone number, or sending them to a contact page so that they can give your sales team a call.

Demand generation vs lead generation: choosing between the two

There are many philosophies when it comes to this subject. Some marketers will tell you that you can never “truly” focus on both at the same time. Others will tell you that ideally, you should combine both in a synergistic fashion.

A lot of this will have to do with your specific business model and approach to the market. If your business is focused on community building, customer service, and brand awareness, a higher focus on demand generation would be the right choice. Meanwhile, if your business is primarily focused on increasing sales, lead generation should be your first choice. Large B2B businesses usually get better results with lead generation.

Keep in mind that lead-focused campaigns can struggle in their attempts to reach people. On the other hand, demand-focused campaigns can have a hard time tracking the sales impact.

Keep in mind that lead-focused campaigns can struggle in their attempts to reach people.

Combining the two

Lead generation tactics can be crucial when it comes to demand generation. If you do not build up those lead-generation mechanisms, you will fail to capture the leads that need to be nurtured before a sale. At the same time, if you don’t focus on raising awareness for your brand, you won’t get those qualified prospects to your website. Also, your brand won’t have the same perceived value in the marketplace.

Most businesses will choose a strategy that combines both. The truth is, however, that you won’t be able to focus on lead generation and demand generation equally. One will always take precedence over the other, so in essence, you need to choose where your primary focus lies, even if you’re trying to “do both”.

Lead generation first

This approach focuses on building up a marketing database with new leads and then nurting said relationships. The best tactics in a B2B context are telemarketing, relationship-based one-to-one (account-based) marketing, and capturing emails. This approach is very popular among B2B marketers who like to use cutting-edge marketing automation and drip-based nurture programs.

We’ve covered telemarketing and account-based-marketing in depth in previous posts, so please refer to that content if you need help, or contact us for even more personalized assistance. For now, let’s look at email marketing.

Here’s what you need to know – it is true that capturing emails is very different in a B2B setting, so general marketing tips about “gathering emails” will not apply to you. Most of those marketing guides involve techniques and examples relating to small B2C contexts. However, there is one universal concept that applies to all different industries and types of business. Let’s talk about this crucial concept right now.

A person needs a reason to give you their contact information.

There has to be something in it for them. There are many things you can do to achieve this, but two tactics stand out.

  1. Offering a crucial whitepaper that has a lot of value to a business like the ones you’re targeting.
  2. The promise that they will receive a newsletter that packs a ton of valuable content which is crucial to such businesses.

You will notice that all of these things involve methods that simultaneously generate demand. If you produce the kind of content that can generate quality email leads, you will also generate demand. If you produce an authoritative whitepaper, it doesn’t just make people hand you their emails. It also boosts your reputation as an authority in the field, thereby generating demand.

In essence, you’re doing both. It’s just that your primary focus is on generating and nurturing those leads, and demand generation is just a built-in aspect of the tools that you use.

If you produce the kind of content that can generate quality email leads, you will also generate demand.

Demand generation first

This is the inverse of the previous strategy. You start with a goal of generating demand and interest in your products and services, but also try to generate leads in the process.

Here’s an example. You want to reach new people with paid advertising:

  • In a lead-generation-first strategy, the immediate goal might be to get the email addresses of these people first. And this is how you define your plan and the campaign.
  • In a demand-generation-first strategy, your goal is to introduce qualified potential customers to your brand and offerings.

Obviously, you still want to capture leads, but this isn’t your leading premise. Your first goal is to inform potential customers why your brand and offerings stand out from the rest. Ideally, it should be made clear that your product or service solves the main pain points of their business, and that it does so in an efficient way that makes sense.

In the process of educating potential customers, you can, of course, ask them for their contact information and plug them into your database and nurture programs.

You still want to generate leads. It’s simply a secondary goal whilst you’re in the process of educating customers about your brand.

Now, looking at this, you’re probably starting to get why most marketers prefer a lead-generation first approach. If you get someone to become a lead, you have plenty of time to educate them afterward, using either email-marketing or one-to-one marketing. In most cases, you don’t have to create a demand before they turn into a lead, especially if you’re just trying to get their email address.

However, this is a generalization and your case might be the exception. With certain industries, the opposite might be true. Especially with high-ticket B2B scenarios where you need to convince an upper-management representative that your offerings are just what their business needs. In some scenarios, you have to create the demand first before they turn into a sales lead.

Ask for additional help

The fact is that your business is unique and this is just a general overview to give you a headstart. If you want to decide on an exact marketing strategy, you and your team will need to keep doing research and experiment.

Alternatively, if you want to save a lot of time, consider getting some professional help. If you want a more personalized assessment specific to your exact business and situation, feel free to inquire about it. This might just be the fastest way to see the results your business deserves.