Marketing & Growth

Demand Generation vs. Lead Generation: Which is best for you?

8 min read


Inbound marketing is a customer-centric marketing approach that is focused on creating content that is informative, useful, and educational for your target audience.

By providing helpful content, you can establish a sense of trust with your audience and make them more familiar with your brand, so that when your audience recognises and trusts your brand, and wants to buy a product or service in your space, they are more likely to consider buying from you.

Inbound marketing is not new, but within the world of inbound marketing, demand generation and lead generation are two different strategies used in a lot of campaigns and programmes. Recently, demand generation has been a term that has gained a lot of traction, especially when compared to "old school" lead generation tactics. 

For years, companies have run lead generation strategies as part of their inbound efforts, however, as buyer behaviour changes and develops, so do the strategies you must use, and a lot of companies have started to incorporate more demand generation-focused efforts into their strategy. This is not a surprise, in terms of the transition, I'm sure that demand generation will become outdated in a few years as buying behaviour continues to change and evolve. 

In this blog post, we'll go into more detail about both demand generation and lead generation so you can better decide which strategy is best for your business right now.

What is lead generation?

Lead generation is the process of gaining your audience's interest in your business offerings by providing content, converting them into known contacts, and then nurturing them into long-lasting customers. In short, generating a lead means a contact being created within your CRM system - at which point you know who that person is and where they work, so you can better sell and market to them.

Common marketing tactics for lead generation include gating content, using CTAs to push people towards that content, and then using lead gen forms to get potential customers' contact information to send further emails or offers. The ultimate goal with lead generation is to know that someone is interested in your services as early as possible during their buying cycle, either in the awareness or consideration stage. That way, you are able to provide them with contextual and personalised content and information to aid them in making a buying decision. 

It’s very common within the lead generation world that over a number of years, you’ll build up a large database of contacts within your CRM system, with a small percentage of them moving through to the opportunity and customer stage.

What is demand generation?

Demand generation is a marketing strategy focused on building demand and interest in your product or service, resulting in high-quality, high-intent leads. 

Instead of trying to convert these customers using top-of-the-funnel content, you’re more focused on using content within the right places (i.e. the places your potential customers are consuming content) with the aim of increasing your brand awareness, informing your audience, and building trust with them. The idea here is that rather than trying to convert them as high-level leads in your database and nurture them over time, you focus on building trust with them to a point that when they have buying intent, they know who to reach out to.

The ultimate goal of demand generation is to convert people to the point they say "Can I speak to sales please?". 

A common way to use demand generation to create demand and build audience interest is by providing content that answers buyer questions/concerns, e.g. through blogging and creating resources for your audience to use to help them through their purchase journey.

As opposed to lead generation, where you try and convert the lead at the earliest possible moment, to get them into your database to nurture for the future, demand generation focuses on converting leads once they are ready to buy, and not before. This will result in a smaller database of contacts, but a better lead-to-customer conversion rate than we would see with lead-generation tactics. 

Differences between demand vs. lead generation

The most significant difference between demand generation vs. lead generation is that the conversion of information takes place at different stages of the sales funnel, and therefore affects how you create content and try and engage with your audience. 

Within lead generation, you are trying to convert a lead as early as possible, so that you know who that person is and can tailor your marketing outreach appropriately. In demand generation, you are less worried about converting very early on, and more focused on educating an audience, and creating demand, so that when those people are ready to buy, they reach out to your company and no one else. 

The two marketing strategies, therefore, have two different objectives. Demand generation aims to make people aware of your company and the problems your company solves. Lead generation is about converting that demand into leads. These goals are achieved through different actions. For example, if I was running a lead generation campaign, I would try to think of a really top-of-the-funnel offer that our audience may be interested in. If I was running a demand generation campaign, I'd focus more on creating content which educated our audience on our services and the area we work - with the goal of our audience consuming that content - and reaching out to us once they having buying intent, not before. 

As you decide whether lead generation or demand generation is best for you, you need to consider how your buyers actually buy products and services. 

In the past, consumers wanted to consume lots of content around a product or service before speaking with sales, so companies would offer quality content in exchange for the personal details of potential customers. This would create a database of leads that companies could target with sales pitches and further content. However, with the rise in the amount of content available and the increasing dislike for being sold to, people are now hesitant to provide their details. 

This is where demand generation comes in, which focuses on educating the audience instead of generating a database of top-of-the-funnel leads. For instance, creating podcasts or LinkedIn videos can educate the audience without requiring personal information. When I think about myself as a buyer, I appreciate being able to watch videos or listen to a podcast without the company knowing who I am. But if I ever consider buying something, I'm more likely to buy from a brand I've come to know and trust through educational content.

When done successfully, you can be confident that the leads you receive have buying intent and are qualified to move through your sales funnel at a higher conversion rate. This means your sales team is working on fewer leads, but working on leads that are much more ready to buy.

To ensure that the demand generation delivers a qualified audience, it is worthwhile to consider the help of a digital marketing consultancy to refine your marketing demand generation strategy.

What should you do next?

To fully leverage the potential of both strategies, your inbound marketing methodology should use both demand generation and lead generation.

One way to ensure that your lead generation strategies help you to attract qualified leads is by seeking the help of a marketing consultancy. Your lead generation tactics can then help you turn an already interested audience into satisfied customers who will help grow your business and increase sales.

Our team at Huble has helped hundreds of companies to develop effective inbound marketing strategies. If you'd like to find out more about how we can help your business use both marketing strategies effectively,  speak with our team today.

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