What is Demand Generation and How is it different from Lead Generation?

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There has been considerable ambiguity over the distinction between the phrases “demand generation” and “lead generation” in the past several years. Digital marketers have begun to use both phrases interchangeably, going so far as to argue that there is no need to differentiate between the two.

But can we genuinely say that these words may be interchanged? Does it make a difference what you term the tactics you use for focused marketing?

What is Demand Generation?

The process of increasing knowledge of, and interest in, your goods or services is what marketers refer to as “demand generation marketing.” Your audience will grow, the buzz will be created, and traffic will be driven, all of which will help turn interest into action.

The marketing methods that are data-driven and are used to build awareness and interest are collectively referred to as “demand generation.”

Demand generation can be broken down into five phases:

1. Create demand (Demand Creation)
2. Capture demand (Demand Capture)
3. Revive demand (Revival)
4. Accelerate demand (Acceleration)
5. Nurture/expand demand (Expansion)

How is demand generation different from lead generation?

The primary distinction between demand generation and lead generation is that demand generation concentrates on expanding your company’s brand recognition. In contrast, lead generation works to close sales with prospects already familiar with the company.

Lead generation is the process of increasing audience interest in your business offerings through nurturing, with the end goal of converting people into customers after convincing them that your offer will help them meet their needs. Ultimately, the goal of lead generation is to convert individuals into customers.

To break down the key difference between the two even more clearly:

Demand generation

• Increase brand awareness.
• Educate your target audience.
• Builds trust.
• It sparks interest.

Lead Generation

• Captures audience contact information.
• Generate qualified leads and nurture them.
• It demonstrates brand value and differentiation.
• Converts high-quality leads to customers.

It is crucial to distinguish lead generation from demand generation within your marketing technique due to the significant distinctions in strategy and methods between the two. But it doesn’t have to be demand gen vs. lead gen. Demand generation is dependent on lead generation. The distinction between awareness and interest is crucial, despite its subtlety.

Demand generation raises awareness, whereas lead generation generates and retains interest. As a result, quality leads with a higher likelihood of making a purchase are generated.

Here’s an example from metadata.io showing how the two approaches work well together:

Demand generation: A business publishes an SEO-friendly informative blog post related to their business that begins to rank on the first page of Google’s search results page. Readers gain valuable information on the subject.

Lead generation: At the end of the blog post, readers reach a call to action that offers a free e-book on the topic they just read about with more insights. Readers click on this offer and are asked to submit their email address where the e-book will be sent. The reader then becomes a prospective lead.

Lead nurturing: The lead is nurtured via emails related to the business. These emails include information about the brand’s service or product. One of these emails catches the lead’s attention, and they click on the offer.

Lead capturing: The lead signs up for a demo from the offer in the email. The lead is routed to the sales team, and the sales process starts.

Completing the sale: The customer makes a purchase.

Key Takeaway

Demand generation and lead creation should be used in your inbound sales approach to help you expand your business and increase sales. If your demand creation techniques generate qualified leads, your lead generation approaches will nurture them into satisfied consumers.

Then again, marketing is never one-size-fits-all, so take the time to understand how your demand generation may feed into your lead generation and how your lead generation influences your demand generation. Your audience, product, and early results will fully determine the content and offers/CTAs you run.

Contact Verde today to learn how we can help you execute data-driven campaigns and start fueling your funnel with highly qualified leads.