Sales

Demand Generation vs. Lead Generation: Understanding the Difference

Explore the key differences between demand generation and lead generation marketing. Understand their objectives, strategies, and how they synergise for business growth.

Rory Sadler
October 16, 2023
February 24, 2024
Explore the key differences between demand generation and lead generation marketing. Understand their objectives, strategies, and how they synergise for business growth.
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The fundamental objective of every business is to build a bigger clientele. Demand generation and lead generation are two opposite strategies for achieving this goal.

Some marketers say that demand gen is about boosting your brand awareness, while lead gen focuses on converting these prospects into customers. If that's true, why do we talk about demand gen vs. lead gen? Are they opposed, or can they work together?

In this article, we explore the difference between lead generation and demand generation marketing. We'll explain what they are, how they work, and what differentiates them.

We'll cover:

  • What is Demand Generation?
  • What is Lead Generation?
  • Demand Generation vs. Lead Generation: What's the Difference?
  • Demand Gen vs. Lead Gen: Can They Work Together?

What is Demand Generation?

Demand generation marketing is a strategy that increases awareness and interest in your brand's products or services – hence the name, demand.

The logic is simple: by supercharging your brand's reputation, you'll see more website visitors, more brand interactions, and, hopefully, more sales. It's a quantity-over-quality marketing tactic.

That's brilliant if you're a new company or taking your first steps into a new market. Demand gen is like a foghorn, alerting everyone in a sector that you're ready to help.

Demand Gen Objectives

Demand gen isn't for everyone. It's explicitly tailored to announcing who you are and what you do. More specifically, it has the following core objectives:

  • Elevate brand visibility and drive awareness.
  • Inform and educate potential buyers about offerings.
  • Foster engagement and capture lead information.
  • Nurture leads through the sales funnel and ensures sales alignment.
  • Convert prospects into loyal customers and retain them.
  • Continuously measure and optimise campaign performance.

As a strategy, demand generation unfairly gets labelled as being solely about getting your brand noticed. However, after it's generated awareness and attracted prospects, your business should build relationships. That's a big part of the tactic. Unless you can transfer interest into trust, you'll struggle to gain any traction.

Demand Generation Strategies

Not sure how to generate demand in practice? Here are some ideas to consider:

  1. Content Marketing. Creating high-quality, SEO-optimised content acts as a magnet, drawing interested consumers toward your brand. Blog posts, eBooks, webinars, and videos deliver significant value and position your company as a thought leader within your industry.
  2. Email Marketing. Reliant on existing customers or already interested prospects, email marketing has an impressive ROI – $36 for every $1 spent. Personalised campaigns, based on user behaviour and preferences, can further generate interest and brand engagement.
  3. Social Media Marketing. Platforms like LinkedIn, X, Instagram, or Facebook are not just for brand awareness; they're instrumental in building and nurturing customer relationships. Plus, as your followers share your content, your brand awareness grows.
  4. Paid Advertising. Pay-per-click (PPC) campaigns allow you to jump to the top of search results or social media platforms, targeting specific demographics. It's a quick way to jump-start brand interest – but it does require significant investment.
  5. Events and Webinars. Either physical or virtual, landmark events put your business on the map. It's a chance to showcase your expertise, engage with potential customers, and generate interest.

Of course, there's always the tried-and-tested strategy: Free Stuff! Offering a short software free trial, a free sample, or a taster at a trade show hooks people in and automatically increases brand awareness.

What is Lead Generation?

Lead gen jumps to the other end of the sales funnel. It's no longer about generating interest; it's about nurturing your existing prospects into customers. A lead is an individual or organisation that has expressed interest in your products or services. That could be downloading an eBook, subscribing to your email list, booking a demo, or attending a webinar.

After identifying these leads, a sales team usually screens and scores them – based on their conversion likelihood. Leads typically fall into two main categories:

  1. Marketing Qualified Lead (MQL): An individual or entity that has shown interest based on marketing efforts or activities. While they might not be ready to buy immediately, they are more engaged than a typical site visitor.
  2. Sales Qualified Lead (SQL): An MQL that has been researched further and determined to be a potential customer with a higher likelihood of buying. They have typically undergone further vetting and have indicated a strong buying intent.

Brand awareness is still a big part of lead generation. But if demand generation is about getting more fish into your pond, lead gen is trying to see which fish will bite.

Lead Generation Objectives

Converting leads into customers is the primary objective of all lead gen strategies. However, there's still some overlap with demand gen. Overall, the objectives behind generating leads are to:

  • Expand and enrich the company's database with potential customers
  • Engage and build trust with the target audience
  • Drive more visitors to the company's website or landing pages
  • Qualifying and nurturing high-potential leads to shortened sales cycles
  • Continuously optimise marketing efforts based on feedback and performance metrics

Lead Generation Strategies

Unlike demand gen, where volume is what matters, in lead gen, quality is king. Marketing reps and sales reps screen leads at every stage, creating a database of potential customers.

Customer relationship management (CRM) software, like HubSpot or Salesforce, helps centralise this information. Some CRM platforms even use AI and machine learning analytics to identify the leads with the highest likelihood of conversion.

Calls to action (CTA) are another part of a company's lead gen strategies. Included at the end of a blog article, on a landing page, or in a marketing email, they tell the prospect what the company wants them to do. That could include:

  • Download our Free eBook Now!
  • Sign Up for Our Exclusive Webinar
  • Get Your Free Trial Today
  • Join Our Newsletter for Industry Insights
  • Request a Personalised Demo

Finally, live chats let you screen your leads. Gather some brief insights and judge their brand interest during this one-on-one conversation.

Demand Generation vs. Lead Generation: What's the Difference?

Heard of the sales funnel? It describes the process of converting customers from their first brand interaction to the final sale. In broad terms, demand generation takes care of drumming up the initial interest. That could be a blog post, webinar, or education video.

After learning about your brand, the individual may interact a few more times as they decide what solution they need for their problem. Finally, they click on a CTA and perform the desired action. At this point, we go from demand gen to lead gen. It's no longer about building awareness but converting that awareness into a sale.

In some ways, these two strategies are synergistic. But you shouldn't be confused about what you're trying to do at each stage. There's no point in creating more awareness about a brand among individuals intimately familiar with your products or services – and vice versa.

Let's explore the key differences:

Demand Gen vs. Lead Gen: Can They Work Together?

If demand generation and lead generation are opposite sides of the sales funnel, can't they work together? In a word, yes.

There's just one problem: resources.

Almost all companies will invest in demand gen and lead gen strategies. But where you invest depends on your current goals as a business. If you're a new business or have undergone a recent rebrand, demand gen could be vital to get you on your feet. However, if your blog posts and videos see tens of thousands of monthly interactions, focus on turning that interest into tangible sales.

Ask yourself: what do we need to achieve? Successful businesses rely on both lead and demand generation. Never mix them up or lean too much on one or the other. Most of all, ensure they connect – every demand-gen blog post should end with a lead-gen call-to-action.

Closing Thoughts

Lead and demand generation marketing are two sides of the same coin: your marketing strategy. While the former turns brand browsers into buyers, the latter is about capturing everyone's attention.

Success lies not in either strategy but in your company's ability to transform consumer interest into verified leads.

That's where Trumpet comes in.

Our auto-personalised, trackable, collaborative microsites (aka digital sales rooms) are the perfect space to educate, inform, and convert leads.

They fully integrate with your CRM to personalise the space to your prospects, e.g., using their name, answering relevant questions, and featuring content (including videos) tailored to their interests. It's not about lead generation vs. demand generation; it's about harnessing the power of both!

Book a FREE demo to learn more and supercharge your marketing strategy.