Key Differences Between Demand Generation and Lead Generation

There has been some confusion between the terms “demand generation” and “lead generation” in the last few years. In fact, digital marketers have started to use these terms interchangeably and even argue that there’s no difference between the two. But do these words really mean the same thing? Does it matter what you call your strategies for marketing to specific groups?

Read on to learn the difference between generating demand and generating leads.

What is demand generation?

Demand generation marketing is the process of getting people interested in your products or services and making them want to buy them. It helps you reach more people, makes people talk about you, and gets people to your site to turn interested into action.

If you took the name at face value, you might think that demand generation (or demand gen) was just about making vague, unmeasurable interest in your product or service, which is what the term “demand” means.

In fact, the term “demand generation” is a shorthand for the strategies that marketers use to raise awareness and interest in their products and services.

Demand generation is like throwing bait into the water to get as many fish as possible to come to your boat.

How do you get leads?

Lead generation is the process of turning people who look like they might be interested in your product or service into real customers.

Lead generation is what you get when you market to people’s needs. In other words, you got their attention with demand generation, and with lead generation, you’ll get their money.

Lead generation is like baiting your hook with the best lure to catch Chinook salmon in Puget Sound.

There are almost too many ways for a marketer to turn interested prospects into customers, especially when it comes to generating B2B leads. Which types of content work best for your message will depend on your campaign’s main goal.

Difference between generating demand and generating leads

Demand generation is a way to grow your audience by bringing in new people to your website and telling them about your products or services. Lead generation, on the other hand, turns your audience into qualified leads. It’s a small difference, and the two plans are closely linked.

Demand gen feeds into lead generation. First, it’s important to spread the word and get people interested, since not everyone is ready to sign up or change right away.

So, should your inbound marketing strategy make a distinction between generating demand and generating leads? A resounding “Yes!” is the answer. With such different approaches and methods, it’s important to keep lead generation and demand generation separate in your marketing strategy.

Examples of creating demand

Your marketing team can use different kinds of content to bring in new customers. But they all have the same goal: to get your brand and its solution is known to the right people who have the right problems.

Each of these strategies must be used in the right amount for your demand-generation efforts to work.

Know-how of a brand

During the demand generation process, your goal is to make the potential customer aware of your business at the top of the funnel. Once they’re further down the funnel, you can send them a lot of content to get them to sign up.

Here, we explain what brand awareness is. In short, it’s all about making potential buyers think of good things when they think of your product or service.

Say, for example, you sell sunscreen. You want a wide range of people to buy from you. Most people would be better off if they wore sunscreen. So, to build brand awareness, you want customers to think of your brand when they need sunscreen. You want your brand name to be so common in the sunscreen market that people no longer use the word “sunscreen” to describe the product they’re using to protect their skin. Instead, they use your brand name.

Connect buyer personas to the customer journey

Awareness of a brand is great. But you need to connect with the right target audience if you want to increase conversions. Creating buyer personas is the first step. Personas help you divide your customers into different groups and figure out what their pain points are.

Then, make customer journey maps to see how the buyer’s journey is different for each persona group.

Progressive Auto Insurance’s “Are You Afraid of Becoming Your Parents?” ad campaign is a great example of smart, targeted marketing.

Progressive came up with Dr. Rick because there were so many Gen Xers and Millennials buying their first homes. Dr. Rick is a psychologist who helps wayward, older Millennials avoid the horror of becoming their parents.

It’s a great and funny example of how well-defined personas work in the real world.

The campaign to get people to buy home insurance put Progressive at the top of a very competitive market. At the end of each commercial, the narrator says, “Progressive can’t keep you from becoming your parents, but we can save you money on home insurance.”

It’s easy to quote, and it’s been so hugely successful that people have dressed up as Dr. Rick for Halloween and costume parties.

There are many creative ways to reach out to the people you want to sell to. Personas and empathy maps are great places to start.

Leadership of thought

Thought leadership is a great way to make people like your brand and want to buy from you. Dan Price, the CEO of Gravity Payments, knows better than most people what it means to be a thought leader.

Dan Price got a lot of attention when he cut his own pay to give every Gravity Payments worker a base salary of $70,000 a year. The move was heavily politicized and caused a lot of disagreement in the news. Some people yelled at him, while others praised him for putting himself through so much trouble to help his employees.

Dan became an active thought leader on social media, where he tells thousands of followers about his successes as a CEO. And it seems to have helped the business make a lot more money. Gravity made $150 million in sales in 2014, and every year since then, sales have grown by 15%.

Dan isn’t afraid to talk about controversial things, which can be risky. But most of his followers (and potential customers) seem to like the way he speaks from the heart.

This kind of executive thought leadership is a simple and effective way to connect more deeply with potential customers. It can make your C-suite seem more real and, in turn, make your brand more real.

Examples of lead generation campaigns

Lead generation strategies are much more specific and aimed than demand generation strategies, which cast a wide net. Gated content marketing with optimized landing pages, like webinars or white papers, maybe one of them. Or, they can focus on email drip campaigns that keep in touch with leads over time.

Behind a paywall

Gated content is content that can only be viewed or downloaded after an online visitor (or potential customer) comes to your website and gives you some information about themselves. This information is then usually given to the sales team so they can get in touch with the person.

Using gated content is a great way to learn very important things about the people who visit your websites. Most of the time, this information is given as email addresses, job titles, company names, and/or phone numbers. “Lead magnet” is another name for this type of content marketing.

Users get access to webinars (we’ll talk about these in a moment), video tutorials, surveys and studies, ebooks, newsletters, and so much more in exchange for this very valuable information. The most important thing to remember is that if a visitor gives you important information about themselves, they will expect something targeted and useful in return.

Social media

Social media is another great part of the lead generation buffet that many B2B marketers miss. Social media has usually been thought of as a tool for marketing to consumers, but more B2B companies than ever are using platforms like Twitter and LinkedIn to help educate their customers about their unique services and updates.

The strategy for B2B social media shouldn’t be boring.

The more creative your brand’s social media presence is, the more likely it is that CMOs and other decision-makers will notice you when they are looking for solutions. Posts on social media can help your business seem more friendly. Your company profiles can also be a direct way for prospects to get answers to their questions and help with their problems.

The white papers

White papers are very technical documents that explain how to deal with a certain problem or issue. White papers that can be downloaded are great lead magnets because they often target people who make decisions.

White papers are usually a gated resource in lead generation, like case studies. They can focus on just a problem or both a problem and its solution. The first is a great tool to use at the beginning of the buying process. It confirms a prospect’s fears that something is wrong and encourages them to act quickly to fix it.

White papers that talk about both a problem and a solution are also great thing to download and use later in the process of generating leads and keeping them interested.

But it’s important to remember that white papers are not the same thing as elevator pitches. Readers will stop reading right away if they think the whole document was written to try to sell them a service. White papers that are both informative and convincing need to walk a fine line. Using unbiased data can show a reader that your brand is reliable and cares more about them than about making money.

Content like video, webinars, infographics, and more

When thinking of ways to get leads, it’s important to think beyond just writing copy. Not only are webinars and podcasts good because they are easy to access, but they are also easy for potential customers to understand.

A CMO who is busy might not take the time to read your 2,000-word blog. But she might watch a 2-minute video with captions that is sent to her as part of an email marketing campaign.

Some marketers might share an infographic you made, and others might listen to your podcast while driving to work in the morning. A customer can’t download a lead magnet, but they can watch videos about how to use a product or how to do something.

For example, Jonas Sickler, the SEO manager for MTB Strategy, went to the following webinar with Clearscope to learn how to make topic clusters.

You can’t get around it. If you want your demand-generation strategy to work, you should think about making dynamic content that can be read and understood almost anywhere.

Metrics for Demand Generation vs. Lead Generation

To figure out the return on investment (ROI) of your demand generation strategy or lead generation content, you need to keep track of more than one piece of data. For example, a lot of people may download your 90-page white paper. But how do you know if it got to the right people and made them do something?

You can track how well a campaign did because there are metrics and key performance indicators (KPIs) you can use. To get a full picture of how well your inbound marketing is working, you’ll need to look at all of your acquisition and referral channels.

This isn’t a complete list, but here are a few ways you can compare the success of campaigns for demand generation and lead generation.

Demand generation

  • Cost per mille (CMP)
  • % of the market
  • organic traffic

Getting leads

  • Marketing ROI per campaign
  • Customer acquisition cost per campaign
  • Rate of conversion
  • It’s time to buy (length of the sales funnel)
  • Subscribers to an email list
  • Number of leads that are good for marketing or sales

Demand generation and lead generation work better together

For a full-funnel digital marketing strategy to work, it needs to both create demand and generate leads. Let’s look at an example of how MTB Strategy used both of these strategies to improve its inbound marketing.

First, we figured out how much of the market the best websites in the beauty industry had. Then, we used the data to build brand awareness (demand generation) and use lead magnets to reach specific audiences (lead generation).

On the demand-generation side, MTB Strategy put out an article about the cosmetics and beauty industry that talked about market trends. Then, we got PR on websites like Glossy, MediaPost, and Global Cosmetic Industry to talk about the brand.

To grow our demand generation network, we also put out a detailed analysis of Byrdie, one of the market share winners. This industry case study showed step-by-step how the online publisher took market share from top brands in the organic search market. We shared the Byrdie study a lot on social media to get the word out.

In the first 30 days, 29.94k organic search impressions and 1,286 pageviews were made on the two articles. Also, the Byrdie article got 9,151 impressions and 535 engagements on Twitter by itself. Not bad for making people aware of a brand.

On the lead generation side, MTB Strategy used calls to action (CTAs) in these articles to get people to download the full study. Then, we went back to people who had read our articles but hadn’t downloaded the report. Lastly, we paid for ads on social media to let people directly download the report.

As a result, the top executives at some of the biggest beauty brands in the world took notice of our full-funnel content marketing strategy.