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Demand Generation vs. Lead Generation: Guide for B2B Marketers
Over the years, B2B marketers have gotten into the bad habit of using the terms demand generation and lead generation synonymously. While they sound similar, each has a distinct role in your marketing strategy. In this blog, we break down the difference between the two – including examples, metrics and answers to frequently asked questions.
Demand and lead generation are often confused with each other because they both rely on compelling content shared through similar channels with precise targeting. However, the goal, execution and follow-up looks different for demand generation vs. lead generation.
Getting these two strategies mixed up can have negative impacts on the overall success of your B2B marketing strategy – like leads who aren’t ready to convert and higher costs.
To understand the difference between demand generation and lead generation – and the importance of keeping them separate – keep reading.
Table of Contents
- Demand Generation vs. Lead Generation: Defined
- What’s the Difference?
- Demand Generation Examples
- Lead Generation Examples
Demand Generation vs. Lead Generation: Defined
What Is Demand Generation?
Demand generation is a data-driven marketing approach that aims to build awareness (and demand) for your products or services. When you want to expand your audience and create urgency around a problem your company solves, you should utilize demand generation tactics.
What Is Lead Generation?
Lead generation is a targeted marketing approach that identifies potential customers and guides them down your sales funnel until they convert. Instead of trying to raise awareness about your products or services, you leverage lead generation tactics to transform qualified leads into actual clients.
Demand Generation vs. Lead Generation: What’s the Difference?
The difference between demand generation and lead generation is subtle but significant. Demand generation creates demand and interest in your products or services, while lead generation collects information about potential customers and nurtures them into buyers.
To really understand the difference, you have to look at a sales funnel. The top of the sales funnel is broad – casting a wide net to a general, potentially interested audience. The middle and bottom of the sales funnel is where that interest is transformed into action.
So, demand generation sits at the top of the funnel and lead generation settles at the bottom. Ultimately, you need to raise awareness for your offering before you can successfully convert an audience into leads that are ready to make purchases – and that’s the key difference between demand generation vs. lead generation.
With that in mind, demand generation content is usually purely informational and provided for free. On the other hand, lead generation content is a bit more robust and gated (that is, requiring users to fill out a form before they can download content). Lead generation is all about collecting contact information from a targeted audience that’s more likely to buy what you’re selling.
Because of these differences, it’s essential to give both demand generation and lead generation their own time to shine in your marketing strategy. Let’s look at some examples of each.
What Are Examples of Demand Generation Tactics?
Mapping Buyer Personas
Before you can dive into any specific demand generation campaign, you have to first understand who you want to generate demand from. While it may be tempting to try and get your brand in front of every single person on the planet, the truth is that conversions typically happen when you connect with a specific target audience.
To do this, start by developing buyer personas. Buyer personas are representational descriptions of stakeholders who represent your target audience. They help you determine who you need to message, when, what you need to say, and how to go about it.
A buyer persona typically includes:
- Behavioral notes
- Sources of information
- What they care about
- What questions they ask
- How you reach them in their organization
Increasing Brand Awareness on Social Media
Before you can start successfully selling your products or services, buyers need to know who you are. To increase this brand awareness, teach a wide audience about a problem they face and explain how you resolve their issue.
But how do you actually get in front of the people facing these problems? Start by posting on social media platforms that your ideal audience is using.
For example, LinkedIn may be a good fit if you’re appealing to manufacturers because 93 percent of manufacturing marketers use the platform.
Providing Thought Leadership
Another great way to get prospects interested in your company is to offer thought leadership. This means you provide valuable insights into what’s happening in your market and answer questions that folks in the industry are asking.
Organizations can leverage content marketing to get their thoughts out into the world. This includes everything from blogs to trade magazine articles. When you provide free value to potential clients, they are more likely to engage with you, increasing your chances of turning them into leads.
What Are Examples of Lead Generation Tactics?
Digital advertising puts your brand front and center. The goal is to provide eye-catching copy and imagery that entices a user to click on your ad and fill out a form so you can later contact them with a sales opportunity. There are various ways to accomplish this; two of the most common are through Google Search ads and social media ads.
Google Search Ads
A popular form of advertising is Google Search ads. Google mixes your headlines and descriptions with its algorithm to create the most relevant ads for your audience. As a result, users are more likely to click on relevant ads, saving you time and money because you can see what kind of phrasing works better faster.
Social Media Ads
Social media ads are another way to advertise your products or services because you can meet your audience where they are. For example, if your audience uses LinkedIn, advertise there to get your message in front of the right people.
Premium assets are resources you offer potential clients in exchange for their contact information. To increase your chances of someone giving you their information, it helps to offer resources that provide value. For example:
- eBooks: a comprehensive guide that educates the reader about a complex issue. It usually offers a solution or helps the reader come to a decision.
- Case Studies: an in-depth example of how you solved a complex problem for a client. It allows you to emphasize your client’s success thanks to your help.
- Infographics: an eye-catching visualization that’s easy for viewers to comprehend. It may include graphics, pie charts, bar graphs and a little text.
What Are the Metrics Involved?
So far, we’ve discussed how demand and lead generation work. But how do you measure success? Here are some metrics you should track.
Demand Generation Metrics
- Cost per mille (CPM): The cost you pay for one thousand views or impressions of an ad.
- Organic traffic: Any non-paid traffic that comes to your website from a search engine like Google.
- Market share percentage: The percentage of total revenue generated by a specific company.
Lead Generation Metrics
- Qualified leads: The number of prospective customers who have engaged with your marketing efforts or are ready to discuss your products or services with your sales team.
- Conversion rate: The percentage of users who have performed a specific action, like filling out a lead generation form.
- Marketing ROI per campaign: A measurement of how much money each marketing campaign generates.
Now that you know the difference between demand generation and lead generation, you can create an enticing marketing campaign that builds interest in your brand and generates leads. While the line between demand and lead generation is often blurred, treating them separately is essential so you can engage your prospects at the perfect time.
Demand generation creates demand and interest in your products or services, while lead generation collects information about potential customers and nurtures them into buyers.
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.
Leverage social media platforms like LinkedIn, YouTube and Twitter to get your message out to the right audience. To create graphics for your content, try Canva or Creatopy. Then, schedule and track posts using Sprout or Hootsuite.
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.