Demand Generation Vs. Lead Generation: What’s the Difference?

Lead Generation- What’s the Difference

Many people use the terms Demand gen and Lead gen interchangeably, probably because they share similar traits. However, we’re here to tell you there’s a clear distinction between the two. In fact, understanding their goals, purposes, and tactics is essential to creating a full-funnel marketing strategy that keeps your sales pipeline full. Protect the lifeblood of your business and discover what the difference is between demand generation vs lead generation below, and start applying their tactics to your strategy today.

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What is Demand Generation?

Demand generation is a marketing process of creating awareness and demand for your offering. It’s a method businesses use to help prospects identify a problem they are having and in a way that suggests that they can help solve it. Overall, the overarching idea is that it expands your audience, generates excitement and drives traffic to transform prospect’s interest into tangible actions.

Without a demand generation strategy, sales teams struggle to have the inbound leads necessary to generate the required sales numbers. To use a fishing analogy to illustrate demand gen, think of it as bait that you’re throwing in the water; the goal is to attract as many fish as possible.

What Is a Demand Generation Strategy?

A demand generation strategy refers to the encompassing tactics that help educate prospects, create brand awareness and build trust in your offering. Both B2C and B2B demand generation strategies include four essential components:

  • Brand awareness: refers to how you create positive associations between potential buyers’ experiences and your product or service.
  • Educating your audience: helps your audience discover whether they have a problem, how to overcome it and the best options for doing so.
  • Building trust with thought leadership: is a simple yet highly effective way to connect deeper with prospective customers by humanising your c-suite and brand.

What is Lead Generation? 

Lead generation is the process of turning suspects or prospects who have shown interest in your product or service into customers. It’s the natural progression from demand gen where you help prepare prospects by getting their attention – but lead gen is where you’ll actually convert them. To use the fishing analogy again, lead generation is like the process of using the best bait available to ensure you hook a specific and valuable fish.

What Is a Lead Generation Strategy?

A lead generation strategy refers to the encompassing tactics that attract your prospects and convert them into leads and eventually customers. Both B2C and B2B lead generation strategies include four essential components:

  • Lead capture: is a process of gathering leads information, such as their name, contact information and any qualifying details about them such as their position, company and number of employees.
  • Lead magnets: are a type of incentive that compels prospects to become new leads.
  • Lead qualification: a process that helps salespeople determine how likely a prospect is to buy.
  • Lead segmentation: refers to the process of categorising leads based on information such as their job title, habits, activities, pages they’ve visited on your website or even a lead magnet that attracted them.

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

While both generation strategies may seem to be fairly interchangeable – they’re two very different things. In short, demand gen grows your audience while lead gen converts it. Demand generation focuses on prospects’ brand awareness and education about your product at the top of the funnel – building trust and sparking an interest that will carry them through the buyer’s journey.

Lead generation is a natural progression and is more concerned with converting prospects into qualified leads ready to be nurtured into fully-fledged customers at the bottom of the sales funnel. Usually starting by capturing audience contact information, then demonstrating brand value and differentiation on a multi-channel sales cadence to turn high quality leads into customers.

Infographic on what's the difference between demand Vs lead generation

Do Demand Generation and Lead Generation work together?

Yes – both lead generation and demand generation serve the same goal to keep the sales pipeline full, engaged, and healthy, ideally structured by a well-considered sequence. Without a full-funnel digital marketing strategy, salespeople will struggle to convert any leads and reach sales targets.

You need a Marketing to Sales Alignment to help prospects move through the sales funnel and help sales reps lead conversations to closed deals

However, to successfully apply a full-funnel strategy, you must focus on diversifying communication channels because not all prospects discover information in the same way but rather, several ways. Whether that’s through branded videos, social media posts, webinars or paid advertising, you’ll need to consider how they will all work together to create a consistent message to ensure you don’t leave prospects on the table.

Examples of Demand Generation Tactics

Demand generation tactics focus on connecting with prospects wherever they are – because, like most prospects, regardless of whether they’re B2B or B2C, they gravitate towards multiple platforms. Therefore the success of these tactics relies on you having multiple communication channels, both direct and indirect. Discover the best demand generation tactics below:

Lead scoring

Lead scoring for demand generation is the process of determining prospects “sales-readiness” by examining them according to your sales criteria, assigning point values to each, and then tallying a final score for each lead. By doing so, your sales and marketing teams will know where to place their efforts – for example, if a prospect regularly engages with your social media posts, that may contribute to the lead score. 

However, once leads take action that indicates more intent – like downloading content in return for the email address they become a Qualified Marketing Lead passed onto the sales team to start the lead generation process in the hopes of converting into a paying customer. Unsurprisingly, businesses that implement lead scoring to measure lead viability enjoy up to a 77% boost in lead generation ROI.

Free Resources

One of the easiest ways to create excitement around your offering is to let prospects use it. By getting up close to your product or service, they can assess its quality and get a taste of how it will work for them before committing to buying it. The types of free resources you can offer are trials, demos, free-to-use features, audits, estimation tools, calculators, or walkthroughs of self-service tasks.

Content marketing

People will buy into your message only if they think of you as an authority. The word authority derives from the word author, so if you want to be an authority, be an author. Authors write. You have to be generating and sharing content.

Tom Abbott, Social Selling: 10 Essential Strategies to Prospect, Position and Present using Social Media

Content marketing is the engine of any successful demand generation strategy. So much so that in the Demand Gen 2020 B2B Buyer Behavior Survey, 70% of buyers ranked “relevant content that speaks directly to our company” as “very important”, with 76% of respondents saying the winning vendor’s content significantly impacted their buying decision.

Overall, content marketing fuels your inbound sales and marketing activities by attracting prospects to enter your sales funnel with blog posts, case studies, ebooks, infographics, emails, videos and even press releases that address their pain points. 

To help inform your content marketing activities and ensure you create content that’s relevant to your audience – regularly ask yourself and your sales team:

  • Who are our ideal customers?
  • How do they make buy decisions?
  • What are their pain points?
  • What are some of their common objections?

Social media

Social media is an invaluable tool when it comes to building rapport with your audience. You use it to become their problem solver, answering their questions on challenges you know they’re experiencing, which helps them build trust in your brand and ultimately position you as a thought leader on the subject, which means that when they’re ready to solve the problem – they’ll come to you. What’s more, it’s not just a B2C channel either; according to Forrester’s B2B Social Technographics, a complete 100% of business decision-makers use social media for work purposes. Therefore, your social media lead gen activities are helping influence your prospects’ vendor selection and buying decisions

People crave fresh content. They’re interested in receiving timely, topical, relevant updates, and they want to hear a well-informed, individual take on industry news and trends.

Tom Abbott, Social Selling: 10 Essential Strategies to Prospect, Position and Present using Social Media

Examples of Lead Generation Tactics

Lead generation tactics tend to be more in-depth than demand generation tactics, mainly because they’re customised and created specifically with the buyer’s persona, pain points and needs in mind. Let’s explore some of the best lead generation tactics available to marketers and salespeople alike:

Gated content

Capturing e-mail addresses from prospects helps to fill your sales funnel. Link back to your opt-in page by offering and delivering something of value in exchange for their contact details.

Tom Abbott, Social Selling: 10 Essential Strategies to Prospect, Position and Present using Social Media

Gated content is content that website visitors or prospects can only access by exchanging valuable information about themselves; it’s often referred to as a “lead magnet” for this reason. Usually, this information comes in the form of email addresses, titles, company names, and phone numbers, which are then taken and given to the sales team to connect. Types of gated content include white papers, e-books, guides, reports, mini-courses, worksheets, video tutorials, surveys, online tools and templates. Overall, for this lead generation tactic to be successful, you’ll need to ensure that visitors receive something worth handing over important information about themselves to you.

Retargeting Campaigns

Retargeting is the process of leveraging the attention you’ve already received from prospects to keep your brand and product top of mind after they’ve expressed interest by visiting your website. It works by serving as an automated series of touchpoints or as a follow-up sales cadence that nurtures them until it’s the right time for sales to step in and request a call, demo or commitment. It’s so successful that customers who receive retargeted ads are 70% more likely to convert, making this lead generation tactic invaluable and highly effective.

Social media

Some of your followers may be highly engaged and sharing your content. Be sure to reach out to them and reward them for talking positively about you by profiling them, inviting them to special events or giving them something of value.

Tom Abbott, Social Selling: 10 Essential Strategies to Prospect, Position and Present using Social Media

Help educate prospective customers on your unique service offerings and updates by using social media to humanise your business and act as a direct point of contact for prospects looking to solve their problems and have their questions answered.

Discover a New Way to Generate Leads

Like blood to a body, a full sales pipeline is necessary for your business to survive. The thing is, prospecting has evolved, and old methods just aren’t effective anymore. 

In our Prospecting Power training we teach participants how to ensure your customer acquisition strategy is creative, persistent and, most importantly, generates real results.

Prospecting Power Course Booklet
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