What’s the difference between demand generation and lead generation? If you don’t know, you’re not alone.
Demand generation and lead generation are both marketing techniques that use similar language and tactics, and target similar consumers. However, they’re distinct practices that aren’t necessarily interchangeable.
As a B2B marketer, you’re off to a great start if you can recognize the value of both and are ready to incorporate them into your campaigns. To see results, it’s important to understand the distinctions between the two and how to use them together for maximum impact.
What’s the Difference?
To make B2B demand generation and lead generation work for your team, understanding their differences and similarities is key.
Demand Generation
Demand generation is the process of creating marketing campaigns that spark awareness of and interest in your product or service. Demand gen can be deployed when breaking into new markets or seeking to cultivate broader awareness and penetration in your total addressable market.
Teams across the marketing department typically work together to communicate value propositions to target audiences across demand generation channels, testing and iterating on their approaches.
Lead Generation Definition
Lead generation is the process of guiding people who’ve shown interest in your solution through the sales funnel. The goal is to convert them into qualified leads for sales to then connect with them and close the deal.
Lead generation is about nurturing leads with value-adding gated content. It’s deployed to capture essential prospect information, which is then used to qualify leads and serve them engaging, personalized experiences.
Content is a cornerstone in both marketing strategies. We’ll talk about the different types of content you can use for both in a later section.
How Demand Generation and Lead Generation Interact
Lead generation is often considered a subset in a larger demand generation strategy. But even when thinking of it as a standalone approach, getting to the lead generation stage is typically the result of successful demand generation marketing.
Demand generation attracts potential leads at various funnel stages to expand your audience. Then, lead generation helps convert the best of that audience into qualified leads who are more likely to become customers.
Neither strategy is more important than the other. They are interdependent.
Both strategies feed the sales funnel. Demand gen happens through the upper funnel during the interest, consideration, or evaluation phases, to create awareness of and interest in your brand and solution for people fitting your ideal customer profile (ICP). Lead gen uses high-value, gated content to gather prospect information, convert prospects into purchase-ready leads, and retain folks throughout their customer journey.
Related Reading: How to Optimize Your B2B Marketing Funnel: 3 Friction-Fighting Tips
Metrics for Measuring Success in Demand Gen vs. Lead Gen
Marketing strategies vary by company, which means there are a wide variety of marketing key performance indicators (KPIs) you can track to measure success. Here is an initial list, which you can add to or tailor to fit your needs.
Demand generation KPIs :
- Overall sales pipeline growth
- Cost per acquisition (CPA)
- Customer acquisition cost (CAC), per channel
- Website traffic numbers
- Social engagement rate
- Content performance metrics
Lead generation KPIs:
- Number of qualified leads
- Lead value
- Conversion rate
- CAC
- Click-through rate (CTR)
- Average lead response time
- Ratio of marketing qualified leads (MQLs) to sales qualified leads (SQLs)
Demand Gen and Lead Gen Campaigns in Action
How do demand and lead generation campaigns play out in practice?
Demand Gen Examples
Definitions can vary by company, but the general goals of demand generation campaigns tend to be focused on brand awareness and positioning. To raise more awareness, start by sharing and distributing content via easily accessible, free channels that are (mostly) un-gated.
Social Media
It’s common for B2B buyers to use social media when researching a purchase decision. Social media posts offer a free way to share your content and engage with potential buyers. Extend your social media marketing reach beyond your followers with relevant industry keywords that will make it easier for interested parties to find you.
Free Educational Content
When your audience is B2B buyers, remember that you’re talking to a group of continual learners. In fact, there are plenty of subject matter experts (SMEs) in your business who have wisdom to share. Demonstrate your know-how and willingness to enrich your audience by providing free educational content.
Email Marketing
Email marketing is a fast, simple, and cost-effective way to connect with a large audience across channels. The return on investment for email is an impressive $36 for every dollar spent.
Email newsletters may fall between demand gen and lead gen. They require some existing awareness, as an interested party has to sign up for your emails before they can receive them. And shareable and highly informative emails are a great top-of-funnel resource for generating interest. Email marketing can also be a useful nurturing channel for lead generation.
Lead Gen Examples
Lead generation marketing campaigns nurture leads with relevant content and experiences. They can create value-adding, relevant interactions by using a prospect’s professional information to inform the content development process.
To get that info, lead gen experiences are most often “gated” — meaning an information-collecting form stands between prospects and the resource they want to access.
Gated, High-Value Content
Content marketing is a big element of lead generation. You’ve very likely visited a landing page for a piece of content and found you need to fill out a form before accessing it.
That information you provide helps the company’s marketing team determine if you are a lead worth pursuing. Gated content keeps less-qualified leads out of the funnel and away from your sales team.
Gated lead generation content consists of anything, including whitepapers, eBooks, how-to guides, surveys, exclusive interviews, and original research.
Free Trials
Offering free trials can increase lead conversions, or in some cases, turn a prospect directly into a paying customer. Typically, the longer someone uses a trial, the higher the probability that they will continue using it after the trial period ends.
Highly Specific Webinars
General, un-gated webinars are an option for demand gen, but have lower ROI. However, a thoughtful, worthwhile experience driven by a subject matter expert is often something that prospects will give their personal information to attend.
There are plenty of online webinar platforms that provide sign-up forms where you can collect attendee information and feed it into your marketing CRM.
Get the Best Data for Demand Generation & Lead Generation
Why take a spray-and-pray approach when you could build successful, data-powered demand generation and lead generation campaigns?
Nothing is more important to demand gen and lead gen than high-quality data about potential customers. But is your data complete and accurate enough to identify correct buyer personas — and hit them with relevant campaigns that convert?
If it’s not, you’re wasting time and money.
Contact ZoomInfo today and we’ll show you how we help execute data-driven campaigns and start fueling your funnel with highly qualified leads.