Demand generation vs lead generation — they’re not as opposed as the “vs” might have you think. Demand generation and lead generation are like peanut butter and jelly in the marketing and marketing automation world. They’re different (and tasty), but work well in tandem with one another, just like their legume and grape-based counterparts. And in the ever-changing industry of digital marketing and marketing automation software, these two concepts represent pillars of stability.
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According to HubSpot, a whopping 63% of marketers rank demand generation and lead generation as their greatest challenge. There are so many different strategies to choose from and mediums to use. We use marketing automation to make this process a little easier, but you can’t just deploy an automated marketing solution in an industry that changes daily, especially without understanding how to generate interest and sales. To put it lightly: there’s a hell of a lot to keep up with if you don’t know the basics.
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Nevertheless, marketers need to stay up to date on all of this information. In order to develop the best strategies and campaigns, it’s important to know what identifies various types of marketing strategies. Two commonly confused strategies are today’s target for our in-depth analysis. So without further ado, *drum roll* let’s compare demand generation vs lead generation.
What is Demand Generation?
Often shortened to “demand gen,” demand generation is all about getting your name out there. Let’s say you see a really wild ad; Its presentation is so far out there that you can’t help but pull up your browser and do some research about what you just saw. You’ve just engaged with demand generation — you want to know more.
The goal is to make potential customers want to learn more about you and go seek out that information. This is a strategy that’s especially important for small businesses that are just starting out. However, it’s still a very important strategy for bigger companies as well. Even the biggest brands in the world, such as Coca-Cola and Nike, employ demand generation strategies.
There are several types of demand generation strategies you can implement.
- Inbound marketing
- Content marketing
- Event planning and advertising
- Social media marketing
- Lead nurturing campaigns (using marketing automation techniques — more here)
- Optimizing landing pages and content
- Aligning sales and marketing
TV commercials are a kind of demand generation since they present your organization and what it does to an audience. Smaller companies, of course, tend to focus on smaller-scale demand gen strategies, such as sponsoring a meetup event or a webinar. Smaller businesses also want to leverage social media channels with their demand generation strategies, given that more than 50 million small enterprises use social media to connect to their customers. So, how do you best generate demand?
Possibly the most common demand generation strategy is producing branded content that’s shareable. This can take the form of a blog, infographic, video, or another piece of consumable content. You can leverage creatives to help put together engaging and informative content. This type of demand generation can be especially useful because not only are you educating and informing visitors, you’re establishing yourself as a recognized voice in your chosen industry (and doing it with style).
Explanatory videos made for the web are another kind of demand generation for the same reasons as a TV commercial. And when you distribute this kind of content using social media ads, you have yet another type of demand generation (again, especially important if you’re a small enterprise).
Ideally, demand generation entices your audience to seek information about you, leading directly to your sales team and a conversion. This isn’t always the case, however. So at the very least, your demand generation should familiarize your audience with the name of your business and what your business does. This helps propel your lead generation strategies. Speaking of which…
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What is Lead Generation?
Just as demand generation is commonly shortened to “demand gen,” a common shortening of lead generation is “lead gen.” But while demand generation entices your audience to go out and seek you, lead generation is all about bringing your audience in. To do so, your content should no longer focus on getting your name out there. It now needs to shift to how it can benefit your audience.
Lead generation content focuses much more heavily on the value that you bring to your audience. For example, if you’re a software company, you’d present how you make your customers’ jobs easier. And if you’re a discount store, you’d showcase how much money your customers can save.
The initial goal of lead generation is to collect information from your potential customers. You can do so through one of several types of signups, which content marketing can assist with. For example, you could create an ebook that prospects can only access if they provide their name and email. With this information in hand, you can start moving these prospects through the buyer’s journey (turning them into leads) with other lead generation strategies.
An example of the buyer’s journey starts with social media, one of the most common lead generation tactics. Social media ads allow you to both share your value with your target audience and include a call-to-action (CTA) that collects contact information from potential customers. For example, a social media ad could link to a page where prospects can download that ebook we mentioned earlier in exchange for their name and email.
As we described in our Marketing Automation FAQs article, “Lead generation involves aspects of drip marketing and lead nurturing to build relationships.” So, after your social media ad helps you collect contact information, lead nurturing and drip marketing take over.
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Email marketing automation is the most commonly used medium for lead nurturing since you can automatically send customized messages to your leads based on their interaction history. This helps you send the most relevant messages to your leads, moving them down the sales funnel and until they end up talking to your sales reps.
Some other examples of lead generation are:
- Content offers like ebooks, whitepapers and case studies
- Inbound marketing content on your website
- Webinars
- Paid advertising that targets customers in social media or organic
- Advertising and remarketing
- Live events like hosting or attending summits or conferences
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Similarities
As you probably noticed, both demand generation and lead generation share several similarities. There’s a reason that they’re commonly mistaken for each other, after all. For starters, they both go by shortened terms — demand gen and lead gen — respectively.
More importantly, however, both demand gen and lead gen use tactics that target a specific audience. The goal in marketing is always to target the prospects (customers who you think are ideal for your business) who are likely to buy your product or service.
Gaining a bunch of unqualified leads for the sake of gaining leads doesn’t help anyone since the vast majority are unlikely to convert. Instead, you want to bring in high-quality leads that are likely to become customers. Therefore, when developing demand generation strategies and lead generation strategies, they need to be targeted towards your potential customers.
Additionally, both rely heavily on content marketing, which we discussed above. In the industry, there’s a saying: “content is still king,” and that’s especially pertinent for your demand gen and lead gen strategies. Of course, you can’t just type out a blog in five minutes and expect it to lead to sales. You need to constantly be producing high-quality content. No matter if you’re writing a couple sentences to post to Twitter or producing a detailed piece of long-form content, quality is always essential (and much more important than quantity).
So just to recap, both demand and lead gen focus quality content and other strategies towards qualified leads and niche audiences — not trying to blanket-attract whole markets.
A Klipfolio demand generation dashboard.
Differences
Despite those similarities, there are plenty of differences between the two. First and foremost, the goal of each is different. As we mentioned, demand gen is all about increasing knowledge about your organization and what you do. Lead gen, on the other hand, is about showcasing your value to draw leads in.
The content developed for each is also quite different. Demand generation should steer clear of typical sales-related language. Since the main goal of demand generation is to inform rather than sell, you shouldn’t be trying to convert prospects right away. Instead, simply showcasing what you do and how you do it is enough. Remember, you want to generate interest and strut your stuff.
Lead generation content, however, should focus more on the sale. Creating content that connects leads to your sales reps is important, so you want to use language that’s likely to lead to conversions.
In addition, the types of calls to action (CTAs) that are included in this content also vary. The CTAs included in a piece of demand gen content relate to learning more, so that your prospects get to learn more about you and what your organization does. Lead gen CTAs are more related to signing up or trying something out. So while demand gen CTAs sound more like “Learn more,” lead gen CTAs sound more like “Access the ebook” or “Start my free trial.”
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Which Should You Use?
So now that you know what exactly demand generation and lead generation are, the question becomes: which type of strategy should you use? We believe that you should implement strategies for both. Demand gen and lead gen work very well in tandem — much like the peanut butter and jelly sandwich we mentioned earlier — which is why it’s very common for businesses to use both. What you need to be careful of, however, is keeping the two separate.
When developing content for either demand gen or lead gen, you need to keep it focused on one or the other. Don’t try to incorporate elements of both into one piece of content. This can become confusing for your audience, and in general doesn’t convert as well because it’s not focused on one specific goal. But as long as you create high-quality content that either informs potential customers or moves leads down the sales funnel, you’ll be able to benefit from both of these strategies.
When it comes to your industry, how do you use lead generation and demand generation? Let us know in the comments!