What is the difference between Lead Generation vs Demand Generation? Here’s the rundown.

Introduction

In today’s fast-paced business world, marketers are constantly on the lookout for ways to drive more leads, customers and sales. In their efforts to meet these objectives, many marketers have begun using two buzzwords that are frequently used together: “lead generation” and “demand generation.” But what exactly is the difference between lead generation and demand generation?

To some extent, these two concepts can be seen as two sides of the same coin. Both lead generation and demand generation involve strategies that marketers can use to bring potential customers to them rather than waiting for them to come to them.

Here is an in-depth look at the similarities and differences between lead generation and demand generation so you can choose which strategy is right for your business or organization.

What is Lead Generation?

At its core, lead generation is the process of bringing potential customers or clients to your business by encouraging them to take action, such as signing up for a newsletter or whitepaper, requesting a demo or engaging with your sales team.

In other words, lead generation is all about bringing potential customers to you rather than waiting for them to come to you. Lead generation may sound like an obscure marketing concept, but it’s actually something that your company does every day.

For example, if you have a retail store, those customers come to you, but if you have an eCommerce store, you’re more likely to use some form of lead generation to get people to buy from you.

What is Demand Generation?

Demand generation is the process of intentionally creating a situation in which customers or clients have a strong desire or urgency to purchase your products or services. In other words, demand generation is about creating a need or desire within your target audience to purchase your company’s products or services.

Demand generation is closely related to marketing campaigns, events and other activities that bring potential customers or clients together in one place, such as a trade show or marketing event. With demand generation, you are trying to spark an intense interest in your products or services by creating an emotional connection with your audience.

The Key Difference: Lead Generation vs. Demand Generation

As you can see, lead generation and demand generation are closely related marketing concepts. Yet despite their similarities, there is one major difference between lead generation and demand generation: who is responsible for moving the sales process forward. In other words, lead generation is the process of bringing potential customers to you, whereas demand generation is about creating a strong desire in your customers to purchase your products or services.

The difference between lead generation and demand generation comes down to who makes the decision to purchase. With lead generation, the decision to purchase is up to the potential customer or client. With demand generation, you are actively trying to create a need or desire in your customers to purchase your products or services.

When to use lead generation versus demand generation?

How do you know when to use lead generation versus demand generation? The best way to decide is by understanding your audience and goals. Once you understand your target audience and have identified your key sales and marketing objectives, you can decide which marketing strategy is best for you.

When to use lead generation

Lead generation is more appropriate if your goal is to get more names on a mailing list or get more people to engage with your brand on social media. Have a look at a beginners guide to lead generation to learn more about Lead Generation.

Lead generation tactics that get results:

1. Gated Downloadable Resource
2. On-Demand Webinars
3. Blogging
4. Referral Rewards
5. Giveaways
6. Influencer Marketing
7. Affiliate Marketing

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When to use demand generation

Demand generation is better for meeting specific sales objectives, such as increasing average order value (AOV) or driving more sales from new customers.

Demand generation tactics that get results:

1. Collaborate with influencers and experts in your industry
2. Online events and open up for Q&A at the end of the session
3. Use case studies to share stories
4. Use data to develop a must-have industry report
5. Show authenticity by not making every post and conversation business focused
6. Use look-alike audiences from social media to learn more about your prospects
7. Develop emails that are story-driven to build interest
8. Share knowledge for free via videos and downloadable content

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For more tactics, have a look at some demand generation best practices

How to bring demand generation and lead generation together?

Modern marketing shifts from generating as many leads as possible, to generating demand. The reason behind this is that buyers spend more and more time evaluating purchases. Moreover, they often make decisions outside easily measured channels.

Without solid demand generation, lead generation is cost-inefficient and doesn’t provide the value needed for growth. If your sales team tries to convert leads before they are fully aware of your solution, the conversion rates (e.g., via Facebook or LinkedIn ads) will be low. That’s why demand generation focuses on constantly providing potential customers with valuable content for free. This ensures capturing existing market demand and on top of that expanding your audience.

Bottom line

The bottom line is that lead generation is the process of bringing potential customers to you by encouraging them to take action, such as signing up for a newsletter or whitepaper, requesting a demo or engaging with your sales team. By contrast, demand generation is the process of creating a strong desire in your customers to purchase your products or services. The difference between lead generation and demand generation lies in who is responsible for moving the sales process forward.

FAQs

1. What is demand generation vs lead generation

Demand generation grows your audience by attracting new visitors to your website and introducing them to your solutions. On the other hand, lead generation converts your audience into qualified leads. It’s a subtle distinction, and the two strategies are deeply connected.

2. How do demand generation and lead generation work together?

Demand generation brings a problem to your audience’s attention, and lead generation offers a solution. Together, they engage with prospective clients and position your brand as an authority in the industry.

3. What tools should I use for demand generation?

Leverage social media platforms like LinkedIn, YouTube, Twitter, Facebook, Instagram and TikTok to get your message out to the right audience. To create graphics for your content, try Canva. Then, schedule and track posts using Hootsuite or Sprout.

4. What tools should I use for lead generation?

Any ads you create will lead to a landing page that includes information about your brand and a contact form. Consider Unbounce for building landing pages and HubSpot for your forms. And if you’re advertising on Google Search, try Google Analytics to track your performance.