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Demand Gen vs Lead Gen

Discover how these distinct marketing strategies contribute to successful customer acquisition.

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Iain Jones, Digital Marketing Executive

Graphic comparing Demand Generation and Lead Generation, with icons representing marketing tools like email, social media, and funnels on a split green background.

Demand generation vs. lead generation - these B2B marketing strategies are often viewed as being in conflict, but in reality, a flourishing sales funnel will have both working in harmony. Demand and lead generation are both marketing strategies that aim to get the attention of consumers and transition them into paying customers. Demand gen aims to do this by creating awareness for the brand while lead gen transforms the brand-aware audience into customers.

If you are a B2B marketer and want to create a sustainable pipeline of workable high-quality leads, there’s the need for a paradigm shift - from demand generation vs. lead generation to demand generation AND lead generation. For lead generation to be truly effective, it must be preceded by a comprehensive demand generation strategy. In this article, we will detail each strategy and assess how their distinct roles implemented in tandem, contribute to successful customer acquisition.

What is Demand Generation?

Demand generation is a well-known umbrella term in marketing that refers to activities specifically designed to generate attention and interest in a brand.These initiatives can originate from a range of different types of content such as Paid Advertising and webinars to any method that provides an audience with useful information. A marketers task is to come up with ever-more creative ways to generate this demand with the ultimate objective of creating a predictable pipeline that will grow your business. To do this, demand generation marketers aim to identify their target audience based on behavioural data and guide them through a nurturing process so that the sales team receives high-quality, highly-qualified leads.

Demand generation strategies cover all your marketing and sales initiatives at every touchpoint in the customer’s journey — whether you’re generating interest among potential buyers or upselling to existing customers.

Flowchart showing the stages of demand generation, lead nurturing, and sales, with arrows indicating lead flow, feedback, and opportunity routing.

Source: Drift

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Demand Generation Strategy Metrics

It is important to use key metrics to track your demand generation strategy to determine success. Below are some important variables to track when you’re focussing on creating demand for your product or service:

  • Website traffic
  • Brand sentiment
  • Social engagement
  • Cost per acquisition (CPA)
  • Customer acquisition cost (CAC) per channel
  • Content performance
  • Pipeline growth

What is Lead Generation?

Lead generation is a blend of marketing activities designed to cumulatively increase a consumer’s interest in a brand, nurturing them until they convert into customers. The main objective is to foster and acquire prospects as early as possible in the buyer's journey.

A typical lead generation marketing campaign collects information from the audience by sharing gated content. This will normally be done by creating a piece of content such as an ebook or educational guide that requires an email address to access which can be passed onto the sales team to close. They can also use this information to build an ideal customer profile (ICP), a framework for identifying similar leads that are likely to purchase.

Lead Generation Strategy Metrics

Lead generation strategies differ across companies, and, as such, the KPIs by which you choose to measure success for your company will vary. However, here are some of our tried and trusted lead generation metrics that will help you evaluate the effectiveness of your lead generation activities:

  • Number of quality leads
  • Conversion rate
  • Total lead value
  • Customer acquisition cost (CAC)
  • Sales closure rate
  • Average lead response time
  • Click-through rate (CTR)
  • The ratio of MQL to SQL

Types of Leads

It is important to categorise your leads based on the actions they took while engaging with your brand, and where they are in the buyer’s journey.

  • Marketing Qualified Lead (MQL): These contacts are engaged with your marketing materials but are still at the top of the sales funnel and therefore aren’t quite ready to talk with sales. They may still need lead nurturing through the sales funnel.
  • Sales Qualified Lead (SQL): These contacts take actions that indicate their interest in buying your product or service. Such actions include signing up for a demo or looking at a pricing page.
  • Product Qualified Lead (PQL): These contacts have experience with your product through an entry-level version of your products or a free trial. They become product qualified when they show interest to pay for the product.
Comparison of demand generation and lead generation strategies, highlighting key tactics for building awareness and capturing leads.

Source: Clearbit

What is the Main Difference Between Demand Generation and Lead Generation?

Demand typically happens at the top of the sales funnel when you’re creating awareness, to get your audience’s attention and generating interest in your products or services. Conversely, lead generation is in the middle of the funnel and focuses on collecting information from interested prospects to convert them to customers.

Funnel graphic showing demand generation at the top for brand awareness, and lead generation below for capturing engaged prospects.

Source: Gartner

When you use demand generation and lead generation marketing strategies in tandem, they can instigate significant growth of your sales pipeline.

  1. Purpose and goals: Demand generation strategies exist to drive interest in leads, while lead generation exists to get contact information from leads.
  2. Position in sales funnel: Demand generation fits right at the top of the sales funnel, while lead generation is progressively further in.
  3. Outcome: Demand generation’s ideal outcome is planting seeds of desire in leads, while lead generation’s ideal outcome is collecting usable contact information.
  4. Common strategies and tactics: Demand generation involves website, content, social media content and more. Lead generation involves strategies like scraping LinkedIn event attendee lists or using newsletter signups.
  5. Gated Content: Gated content tends to be used as a strategy for inbound lead generation, while ungated content is often used for inbound demand generation.
  6. Case Studies: The lead generation power of case studies is one that’s measurable. 73% of B2B marketers use their customers’ stories to help with customer acquisition and to drive sales.
  7. Thought leadership content: Content created by subject matter experts that inform, educate, or entertain. It differs from average search engine optimised (SEO) content because its purpose isn't to promote the brand and help generate leads.

How Demand Gen & lead Gen Create a Business Strategy

For a business, it’s not a question of which method to focus on first, but how can demand generation and lead generation work together to create a seamless customer acquisition strategy.

Even though these generation methods are two distinct processes, they should work in tandem to create a harmonious system that turns consumers into interested prospects, and interested prospects into customers.

For example, a business could decide that they want to produce some informative and useful free content, such as an eBook. This demand generation strategy works well to produce interest in a brand, and it would be prudent to pair it with a lead generation strategy to make the most of the marketing efforts. In this situation, it may be wise to give away the eBook through an email link, thereby capturing the email address of an interested consumer in the process.

Overall, establishing successful strategies is a process of trial and error. Constant experimentation and growth are key for a business to succeed with its demand and lead generation methods.

Key Takeaway

Staying ahead in the digital marketing landscape demands flexibility and an awareness of changing consumer preferences amid technological advancements. Put these trends and tips into action to strengthen your marketing efforts, ensuring that your business remains relevant and impactful in the realm of digital marketing.

Need assistance in navigating the ever evolving digital landscape? Get in touch for expert advice and tailored solutions.

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