Demand Generation Versus Lead Generation

The terms “demand generation” and “lead generation” are often used interchangeably when discussing driving more leads into a business, however, they are two different methods with different outcomes. Understanding them, and having the relevant conversations with stakeholders, can mean you’re meeting expectations more often.

Lead generation

All about quantity and the short term, quick wins.

You’ll find two views of this, the first is a request from stakeholders asking for more leads in a short time frame - they want more revenue and it has to be today. What they’re really looking for is for marketing to target prospects who are ready to buy - those at the end of the funnel. In reality though, finding these people is difficult if you’ve not had a previous relationship or interaction with them. It does happen, it’s just hard. You can also run out of an audience incredibly fast.

The second view is easier and is often the go-to for pressure bound marketers. This is when marketers use vendors who promise lead generation methods. You’ll see activities such as content syndication or paid media being used as a one-stop-shop to drive people to do a singular action, e.g. download a paper or request a call back. Each of these singular actions is then claimed to be a lead and sent over to sales. In worst case scenarios marketers may purchase “leads” and tick a box.

The issue with lead generation is that it’s a numbers game, despite the desire for quality. All of the activities you end up doing are reactive and designed to deliver quantity over quality and, at some point the opinion of the work you’re doing is going to become negative: “These aren’t leads”, “they’re not ready”, “they don’t remember downloading the paper”. This will quickly spiral into a disbelief in marketing activities, despite you ticking the initial brief of “more leads”.

Demand generation

All about quality and the long term, big gains.

The purpose is to provide enough information to the prospect that they self qualify themselves, or do so many desirable actions that they warrant a sales call. These campaigns take a lot longer to set up and will include a longer lead time (months) but will engage the audience in a much more meaningful way if the content’s right. 

If you think about the marketing you’re taught - the stuff that gets people excited, this is what demand gen can deliver. Starting at the beginning - you’re targeting your ideal customer profile/personas with some form of branding message, which means they’re aware of you. At a later stage, you pop up with some form of advice around a problem they have. When it comes to looking for a solution, you’re right there in front of them. It might take months but if you’re targeting the right people with the right messages then that demand will be created and you’ll get inbound requests. It’s bringing all of these elements together: brand, proposition, product.

Add on a layer of marketing qualification, nurturing or lead scoring and your demand results become stronger and more palatable to the sales team and business. Knowing someone’s interested but not ready to buy yet is powerful information and will help you tailor your messaging further.

Picturing the differences

In the funnel below you'll see that demand generation is responsible for driving demand throughout the whole funnel, where as effective lead generation is focused on the end - when someone knows what product or solution they want and are ready to buy. Throughout demand generation there's also a nurture sequence that occurs, where individuals can move between different funnel levels at any time - seeing the message that's most applicable for them based on their previous actions or journey.

Final thoughts

Executing either demand or lead generation in an effective way should lead to stakeholders asking for more, however, getting it right can take time which makes it a difficult sell if they're impatient and want leads yesterday.

Want to do this yourself but not sure how? Get in touch with us and let’s talk through your ambitions.