Demand Generation Vs Lead Generation – What You Need to Know

demand generation vs lead generation

Marketing is full of jargon and rubbish explanations that mean nothing.

Everyone you talk to has a different opinion, and lots of people pretend to know more than they actually do.

Today, we’ll be tackling two common bits of jargon that you may have seen floating around on the internet – demand generation and lead generation.

What’s the difference between demand generation and lead generation, when should you be using them and what do they actually do?

Here’s a clear breakdown of the two, meaning you can get on with your day happy with your new marketing knowledge.

 

What is demand generation in marketing?

Demand generation is a ‘gentle’ marketing strategy. A demand generation campaign focuses on driving awareness and interest in your products/services, creating a buzz that helps nurture potential buyers who aren’t yet ready to convert and warm them up to your business.

54% of marketers say that improving lead quality is their biggest challenge. Demand generation is the solution – by nurturing prospects, you’re proactively improving lead quality (as they better understand your business before you get in touch!).

It’s a great way for your business to reach new markets, promote a new product or service, take advantage of PR opportunities or to re-engage with existing customers.

Consider demand generation as your long-term marketing strategy – it’s what keeps you at the front of potential customers’ minds, even if they’re not yet ready to buy.
The objective is to be the first business they think of when they are finally prepared to commit.

 

What is lead generation in marketing?

Lead generation is the process involved in capturing the interest of a potential customer. To generate a lead, you need your target audience to fill out a form, give you a call or get in contact some other way. Lead generation is marketing designed to generate clicks and leads your sales team can follow up on.

A “lead” comes in many forms. Good leads include:

  • Contact details (it’s hard to follow up if you don’t have an email or phone number!)
  • Intent (why did they get in touch and what content have they seen so far?

Every business needs a lead generation strategy. Your lead generation strategy will vary depending on your industry, but will likely employ a combination of content, SEO, paid advertising and other strategies. You’ll also want a good CRM, such as HubSpot.

 

What are the differences between demand generation and lead generation?

If demand generation is your ‘gentle’, long-term marketing process, lead generation is your more ‘aggressive’ process; the one that seals the deal.

Demand generation, as the name implies, generates demand for your product.

Lead generation, as the name implies, generates leads from your nurtured audience.

This means that both work hand-in-hand. Sure, you can use them both independently and you’ll see some results, but an effective marketing strategy should couple long-term nurturing campaigns with short-term conversion strategies.

 

When is demand generation important?

Demand generation is key, especially when your target audience are unaware of your product/service’s existence.

Imagine cold calling a prospect who has never heard of you, your business or your offering. How do you think that call will likely go?

Now imagine calling them after they’ve been seeing your content and ads for the past few months. Much better conversation, right?

Demand generation should be used when:

  • You’re launching a new product or service and want to generate interest in it
  • You’re entering into a new market where you’re relatively unknown
  • You want to engage with PR outlets to help educate your audience

 

When is lead generation important?

Lead generation is essential if you want to keep your business’ pipeline full and thriving.

Any business that wants to grow needs lead generation in some form. Sure, you can rely on word of mouth and referrals (these are great sources of leads), but this will only help you grow so much.

If you want to properly boost growth, you need a dedicated lead generation campaign that’s designed to turn warm prospects into hot, ready-to-convert leads.
Lead generation should be used when:

  • Your prospects are familiar with your product/service
  • You want to add more hot leads to your pipeline for your sales team to convert

 

How are successful demand generation/lead generation campaigns measured?

Successful demand generation campaigns are measured very differently to successful lead generation campaigns.

 

Successful demand generation campaigns are measured on:

  • Volume of traffic
  • Number of clicks and impressions
  • Branded search volume growth
  • Average time on page
  • Bounce rates

 

Successful lead generation campaigns are measured on:

  • Gated content downloads 
  • Leads added to pipelines
  • Content (webinars, etc) signups
  • Contacts generated from events
  • Paid advertising conversions

 

As a general rule, demand generation is successful when it reaches lots of people and spreads the news.

Lead generation is successful when it helps your sales team close deals.

 

Looking for a complete demand/lead generation solution?

Then you’re in the right place! We are Catalyst – digital marketing specialists and experts in both gently nurturing your target audience and converting them into hot leads.

If you’re looking to fill your pipeline full of prospects that love your product/service and are ready to convert with you, then it’s time we had a conversation.

Get in touch with our digital marketing experts by clicking the button below. We’re on hand to answer any questions you may have. We’ll also take the time to learn about your business. This helps us to make specific recommendations as to what marketing tactics will work best for you.

 

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About the author

Paul Houston has been in sales and marketing for 25 long years.

In that time, he’s learned a thing or two about sales and marketing. Now, he’s imparting some of that wisdom through his crack team of marketing masterminds. He’s gathered the best talent across copy, design, SEO, PPC and strategy, providing you with the most cost-efficient way to grow your business and thrive. 

Outside of work, you’ll find Paul either at the gym, or treating himself to a well-deserved pint of Guinness at his local. He’ll take any opportunity he can to spend time with family and friends (but would usually prefer to be with Dave, his dog!).