Demand Generation Vs. Lead Generation: What’s The Difference and Which Is Better?

Can demand generation and lead generation be used interchangeably? Or are they distinct practices that come under the large umbrella of inbound sales?

Is it important to name your focused marketing techniques and what they are? Continue reading to learn the distinction between demand generation and lead generation.

What is demand generation?

Demand generation is a process that helps create demand for a product or service. It’s the term used to describe all data-driven strategies marketers use to generate awareness and interest in their company, product, or service. The goal is to attract as many potential consumers as possible to convert them into paying customers.

There’s no right or wrong way to pursue demand generation – finding what works best for your business may take trial and error. However, most companies should follow some general best practices when creating demand. For example, generating buzz through social media and driving traffic through search engine optimization (SEO) are great ways to expand your audience. Producing top-of-funnel content like blog posts, infographics, and videos can help attract potential customers who might not have heard of you.

What is lead generation or customer generation?

Lead generation is getting someone from point A to point B. This could be signing up for a trial, registering for a webinar, or downloading an e-book. Any action moves a potential customer closer to becoming a paying customer.

There are many ways to generate leads, but SEO, social media marketing, and content marketing are some of the most common methods. Lead generation can also happen offline through events or personal interactions.

One of the most important aspects of lead generation is capturing leads’ contact information. This can be done in various ways, such as through forms on your website or by requesting their email address in exchange for something valuable like gated content. Once you have their contact information, you can move them through the sales funnel until they become paying customers.

What’s the difference between demand and lead generation in a sales strategy?

Demand generation is making potential customers aware of your company and its products. At the top of the funnel, it focuses on brand awareness and product education. Lead generation is nurturing potential customers until they’re ready to buy. At the bottom of the funnel, it focuses on converting prospects into qualified leads.

Lead generation is a specific part of demand generation that takes customer enthusiasm and turns it into revenue. It happens after you’ve generated interest in your product but before you’ve closed the sale. Leads can be nurtured with content marketing, email marketing, or social media marketing.

How do you generate leads?

Generating leads is essential for any business, but it can be challenging to know where to start. The first step is putting yourself in front of potential customers. This content should be free, enabling you to step into the potential relationship as seamlessly as possible.

This content can include “SlideShares”, “visual presentations”, etc. Once you have their attention, funnel them toward signing up for newsletters and email exchanges. This will create a positive feedback loop between the company and its potential consumers, leading to conversions.

But how do you get people’s attention in the first place? A lead magnet is an offer of value exchanged for leads. It could be an ebook, whitepaper, template, or anything else of value that helps someone take the next step in a sales process.

Positive reinforcement through a lead magnet exchange will help keep your brand top-of-mind with interested prospects.

How do you generate demand?

Now that we’ve covered demand generation let’s discuss how you can create a strategy to generate demand for your products or services.

There are a few key things to keep in mind when creating a demand generation plan:

• You should start generating demand as soon as possible. It takes time to create quality content and get it in front of the right people.
• Use a variety of mediums for your blog posts, including tutorials and case studies. This will help you reach more people with different interests and needs.
• Posting on social media is easy to get the word out about what you have to offer, with paid advertising options like sponsored posts or paid Instagram advertisements coming next in terms of effectiveness.
• Offering value or solving problems can generate demand. When you provide something of value for free, people will want to learn more about what you offer.
• You must offer a way for your audience to sign up for more information and create a pathway to lead generation. This is essential if you want potential customers to become actual customers.

Lead magnets are one way to engage both sides of the lead-demand relationship.

Lead magnets can create positive feedback loops to increase demand. When people sign up for your lead magnet, they’re more likely to become customers later.

Demand generation vs. lead Generation: metrics

You need to track various data points to understand the success of your demand generation or lead generation campaigns. This will help you measure these campaigns’ return on investment (ROI) and determine their success. Some useful metrics include:

• Top-of-funnel responses: This measures how many leads or potential customers you capture at the beginning of your marketing process.
• Conversion rate: This indicates how many people who responded to your campaign became customers.
• Cost per conversion: This tells you how much money you spend to generate a customer.
• Engagement rates: Measuring how engaged potential customers are with your content can give you valuable insights into their level of interest in your product or service.

Other important metrics to consider include CPM (Cost per Mille), the cost of reaching 1,000 people through your marketing efforts, and Organic traffic and market share percentage, which indicate the amount of traffic and market share generated through unpaid means.

Demand generation examples

Your marketing team can employ numerous kinds of demand creation material. But they all have the same goal: to familiarize the appropriate individuals with the correct issues with your brand and its solution.

These strategies must be used in moderation to boost your demand-generating efforts.

Brand awareness

To begin, potential buyers must be aware of your brand. Your aim throughout the process of generating demand is to attract the prospective consumer at the top of the funnel. Once they’ve progressed farther down the funnel, you may share relevant content that would potentially qualify them as leads.

Brand awareness creates positive linkages between potential purchasers’ experiences and your product or service.

Assume you sell sunscreen, for example. Your target market is rather diverse. The majority of the world’s population would benefit from using sunscreen. So, to raise awareness, you want people to link the need for a sunscreen with your particular brand. You’ll want your brand name to be so well-known in the sunscreen industry that customers no longer use “sunscreen” to describe the product they’re using to protect their skin.

Map buyer personas to the customer journey

Brand recognition is excellent. However, to maximize conversions, you must connect with the appropriate target audience. The initial stage is to develop buyer personas. Personas assist you in segmenting various clients and understanding their distinct pain issues.

Then, create journey maps for your customers to see how each persona group interacts with the buyer’s trip.

Progressive Auto Insurance’s “Afraid of Becoming Your Parents?” ad campaign is an excellent example of creative, targeted marketing.

In response to an increase in Gen Xers and Millennials purchasing their first houses, Progressive created Dr. Rick, a psychotherapist who assists wayward, aging millennials in avoiding the misery of becoming their parents.

It’s a great example of well-defined personalities in action.

Progressive was front and center in the highly competitive home insurance market thanks to the demand creation campaign.

“Progressive can’t help you avoid becoming your parents, but we can save you money on house insurance,” the narrator adds at the end of each commercial.

It’s quotable and so successful that people have dressed up as Dr. Rick for Halloween and costume parties.

You can watch a more recent commercial below.

There are several innovative digital marketing approaches to connecting with your target market. Personas and empathy maps are excellent places to start.

Thought leadership

This marketing strategy is an excellent approach to generating leads. Take Gravity Payments CEO Dan Price, for example.

Dan Price rose to prominence after slashing his income to give every Gravity Payments employee a base wage of $70,000 per year. The move was highly contentious and polarizing in the media. Some reprimanded him, while others praised him for taking such a personal risk to do the right thing for his staff.

Dan has become an active thought leader on social platforms, sharing his CEO triumphs with thousands of followers. This appears to have had a significant impact on the company’s revenue. Gravity’s revenue in 2014 was $150 million, with sales growing by 15% yearly.

Dan does not shy away from contentious subjects, which may be dangerous. However, most of his fans (and potential clients) appreciate his candid style.

This content strategy is a simple yet powerful technique to interact with prospective consumers more deeply. It can potentially humanize your C-suite and, as a result, your brand.

Lead generation campaign examples

In contrast to the broad net of demand creation, lead generation campaigns are far more specialized and focused. Gated content marketing with optimized landing sites, such as webinars or technical documents, may be included. Alternatively, businesses might concentrate on longer-term lead-nurturing email drip programs.

Gated content

Gated content can only be viewed or downloaded once an internet visitor (or prospective customer) visits your website and provides you with certain personal information. This contact information is often given to make a connection with a business.

Gated content is an excellent way to collect vital information about the individuals visiting your online assets. This information often includes email addresses, titles, corporate names, and/or phone numbers. A “lead magnet” is another term for content marketing.

In exchange for this incredibly useful information, users have access to various resources, including webinars (which we shall discuss shortly), video lessons, polls and studies, ebooks, newsletters, and much more. The most crucial thing to remember is that if consumers provide you with personal information, they will want something focused and valuable.

Social media

Social media marketing is another fantastic strategy that many B2B marketers miss. Social network platforms have generally been considered a B2C marketing channel. Still, more B2B firms than ever are leveraging the power of platforms such as Twitter and LinkedIn to educate their consumers on their unique service offerings and updates.

The more innovative your brand’s social media presence, the more likely you will stand out to CMOs and other decision-makers looking for answers. Social media posts featuring your customers and/or your team might help humanize your company. Your company profiles can also serve as a direct point of contact for prospects wanting to solve difficulties and get answers to their concerns.

White papers

These tend to be highly technical documents that teach the reader about a specific topic or issue. Because they frequently target decision-makers, these downloadable documents make good lead magnets.

White papers, like case studies, are often gated resources that might emphasize only an issue or highlight a problem and its solution. The former is an excellent tool to employ early in the purchase process. It confirms a prospect’s suspicions that something is wrong and encourages them to move immediately to correct it.

White papers emphasizing a problem and a solution are also excellent downloadable resources for those farther along in the lead nurturing process.

However, it is crucial to stress that these are not elevator pitches. Readers will be quickly put off if they think the document was designed to hard-sell them on a service. Effective white papers tread a narrow line between informing and persuading. Using unbiased statistics can tell readers your brand is trustworthy and prioritizes their interests before profits.

Video, webinars, infographics, and other content

It’s critical to go beyond copywriting to lead generation strategies. Audio and video information, like webinars and podcasts, are not only useful for accessibility but are also easily digested by prospective consumers.

A busy CMO might not take the time to read your 2,000-word blog. She could, however, be willing to view a 2-minute captioned video provided by email marketing.

Some marketers may share an infographic you designed, while others may listen to your podcast throughout their daily commute. Customers cannot download lead magnets but may view product demos or instructional videos.

Terakeet SEO Manager Jonas Sickler, for example, attended the following Clearscope webinar on establishing subject clusters.

There is no getting around that. If you want your demand generation strategy to succeed, you must consider creating dynamic content that can be consumed almost anywhere.

Demand generation vs. lead Generation: metrics

You must track several data points to determine the ROI of your demand-creation strategy or lead-generating content. Your 90-page whitepaper, for example, may have a high download conversion rate. But how can you know whether it reached the intended audience or pushed them to act?

Fortunately, metrics and key performance indicators (KPIs) may measure campaign performance. You’ll need to examine your acquisition and referral channels to understand your inbound marketing effectiveness.

This is not an entire list, but here are a few methods for tracking performance for each strategy.

Demand generation

• Cost per mille (CMP)
• Organic traffic
• Market share percentage

Lead generation

• Marketing ROI per campaign
• Customer acquisition cost per campaign
• Conversion rate
• Time to purchase (length of the sales funnel)
• Number of email subscribers
• Number of marketing or sales-qualified leads

Combine demand gen and lead gen for greater marketing impact

On the demand generation side

Demand gen is creating and nurturing customer interest in a product or service. It’s an essential part of any marketing strategy, as it helps to drive sales and revenue. Often, lead generation is a necessary step in this process. Lead generation is the act of generating leads or customer interest. Once leads have been generated, sales follow-up refers to an email sent by a business to a lead after making a purchase, asking them if they are satisfied with the product and soliciting future purchases from them.

While demand gen is important for any organization, it’s especially critical for businesses that sell products or services online. To remain competitive, these businesses need to generate traffic and convert that traffic into customers. This can be done through various methods such as search engine optimization (SEO), paid advertising campaigns, and content marketing initiatives like blog posts, infographics, and videos.

On the lead generation side

Lead generation identifies and qualifies potential customers for a business’s products or services. It differs from demand gen, which is focused on increasing brand awareness and consideration. Lead gen is important because it helps identify potential customers interested in a company’s offerings.

Terakeet is a great tool for lead generation. It helps you find the right audience for your marketing message and makes it easier to generate leads than paid advertising alone. Additionally, leads generated through Terakeet can be used to build lists for remarketing and sales follow-ups. Ultimately, lead gen is an essential part of any content marketing strategy.

Where Demand Gen And Lead Gen Can Fall Short

Demand Generation typically focuses on the top of the funnel, whereas Lead Generation usually focuses on the bottom. But here’s the problem: The funnel is an old metaphor that can lead to a plethora of potentially disastrous marketing blunders.

First and foremost, the all-powerful MQL – Marketing Qualified Lead – is a good aim.

This is one of the main reasons conventional demand generation and lead generation are continuously competing ineffectively in the SaaS industry. The normal SaaS buyer’s long life cycle and the necessity for multiple pre-close marketing interactions make attribution practically hard.

What moment in this continually developing brand experience was your company’s critical value point? If you merely divide the experience into “first half” and “second half” views, you will overlook some significant insights.

This isn’t the only way the SaaS industry’s diverse consumers make life difficult for this twin-coined couple.

How Demand Generation In SaaS Differs From Other Industries

Demand Generation for SaaS products is different from other industries. The primary components of demand for SaaS products are:

• Discoverability: This means that potential customers must be able to find your product amidst their vast number of choices.
• PR, events, and advertisements: You need to generate positive sentiment around your brand and get people talking about your product.

How Lead Generation In SaaS Is Different From Other Industries

In the SaaS space, consumers have more opportunities to compare your brand against competitors and can, therefore, extend their buying process longer. This also means that lead-generating programs are not the end-buyers that sales must reach.

Sales teams are often disappointed with leads generated from lead generation programs. For demand gen and lead gen teams to work together effectively, there needs to be a better understanding of what each team is trying to achieve. One solution is to merge these two teams into a single team.

Why SaaS Brands Utilize Demand Generation Strategies

There are a few reasons why SaaS brands utilize demand generation strategies. First and foremost, the long lifetime of SaaS means it is ideal for maintaining a consistent brand presence with demand generation tactics. Paid media campaigns provide a way to maintain and grow brand awareness outside the traditional sales cycle, which can be incredibly valuable for companies looking to scale. Additionally, SaaS marketers tend to lean on-demand generation strategies because they are meant to maintain and grow brand awareness throughout an extended sales cycle. Ultimately, this leads to more opportunities for qualified leads and increased revenue.

How do demand generation and lead generation work together?

In the end, Demand Generation and Lead Generation serve the same purpose. So, why are they often seen competing? The problem with most attempted demand generation and lead generation combinations is mismatched goals and KPIs.

Because each approach is based on various North Star Metrics unrelated to the same clear goal, there’s no way to seamlessly hand off demand generation, lead generation, and alignment with sales.

Unsurprisingly, these old-school processes generate much waste compared to newer customer-centric alternatives.

Aligning your whole Growth Department around the single aim of creating clients is a smart place to start when improving your demand generation and lead generation techniques.

You can’t merely optimize everyone for their particular performance if you want to progress beyond pointless efficiency. You must also ensure that everyone is working toward the same goal.

How to target demand generation on LinkedIn

Targeting is key. You may make demand creation and lead generation much more efficient if you can identify between folks who don’t know enough about your brand and items and those who do.

The finest demand generation efforts focus on generating interest among those most likely to convert into leads. They also don’t pay to share free information with individuals who already know everything about your company. You need a campaign that generates leads to get those folks to go to the next step and share their details.

It is important to connect all your data sources to discover prospects who need enhanced awareness and interest. Then, you need to use this data to target your demand-generating audience so that they will engage with you.

LinkedIn profile data is great for discovering qualified leads. You can target the right individuals by searching for particular industries, job titles, seniority, or talents. You can also create ads for diverse categories, prevent hyper-targeting, and achieve the scale you need to generate demand.

LinkedIn profile data is just one way to achieve your objectives. LinkedIn’s Matched Audience feature might help you generate more demand. Here are some suggestions for how you use these tools to engage prospects who are likely to become leads:

Use website retargeting to deliver the most relevant content to interested prospects

For example, you may utilize LinkedIn Matched Audiences to segment website visitors depending on which pages they read and then use those segments for LinkedIn targeting. This gives you a great tool to target prospects based on their level of interest in your company. You can focus your efforts on those who have read specific content on your blog, for example.

Reach decision-makers and influencers at your target accounts

Account-based marketing (ABM) tactics target firms that are more likely to buy what you sell – and worth more to you when they do. You may utilize LinkedIn Matched Audiences to submit a list of ABM-targeted firms. Including this in your LinkedIn targeting guarantees you focus on your most valued prospects.

Use email matching to exclude the people who are already leads

Your efforts at generating demand should not be wasted on people already in contact with your company. By using email matching in your targeting, you may avoid spending to build awareness and interest in people who already exist in your CRM database. Because LinkedIn profiles have precise email contact information, email matching is a great approach to adding or removing groups from your targeting.

Increasing the effectiveness of lead generation

Like a good demand gen strategy, a lead generation strategy could also use many of the same methodologies and targeting possibilities. You’ll use them for numerous objectives, including segmenting prospects ready to buy. A lower CPL may be achieved by targeting individuals who are more likely to convert into leads – and you will have more of these prospects if you focus your activities properly.

The first step to enhancing the efficacy of your lead-generating activities is reducing data collection friction.

Removing friction from lead generation forms

Generating leads will require data collection forms. Most B2B marketers have had to make compromises in the past by gating content. They had to account for a drop-off in engagement when they gated material, and they frequently discovered that leads they claimed to have gotten had filled out fake contact forms.

For these reasons, LinkedIn created Lead Gen Forms. These are in-app forms that are automatically created and optimized for LinkedIn mobile users. Pre-filled with prospects’ LinkedIn profiles, they may be sent promptly. Engaging with your content while providing you with detailed contact information. It all adds up to a game-changer in lead quantity and quality.

Adding Lead Generation Forms to LinkedIn campaigns to generate leads is simple and improves lead quantity and quality. Marketers employing the forms have raised lead conversion rates by 3x LinkedIn standards, and 90% have lowered CPL objectives. Several clients report higher lead quality and revenue conversion as more high-value prospects make it through the lead-generating process.

How to target leads on LinkedIn

Acquiring leads is intended to produce more high-quality leads that sales will take and turn into money, confirming the ROI of your marketing. These goals are simpler to attain when you can target relevant people who understand your business and are at the correct decision-making stage.

Here are five audience categories you may target using the Matched Audiences feature:

1. Use website retargeting to pick up on intent

Visitors to product pages on your website are providing one of the clearest indications that they want to buy from you. A campaign’s primary priority in acquiring leads is to reach as many prospects as possible. Because LinkedIn Matched Audiences categorizes your website visitors by the pages they view, you can target them directly on LinkedIn. Their better conversion rate allows you to produce more relevant leads at a reduced cost.

2. Target the people who have shared contact details – but aren’t yet leads

Those who have already contacted your company but have not yet qualified as leads for your items should also be prioritized. To target them, submit emails using LinkedIn Matched Audiences. LinkedIn’s email matching accuracy (some B2B marketing experts estimate a 75 percent match success rate compared to 15 percent on other platforms) provides you confidence in your click-through rate.

3. Set up sequences for target accounts

After uploading your ABM target list to LinkedIn, you can leverage the targeting precision to offer a series of content to decision-makers at these firms. Follow your demand generation strategies with lead acquisition activities to enhance lead conversions.

4. Cross-sell new products to existing customers

Current customers may be a significant source of potential leads for new product or service launches. Due to their current association with your company, you’re likely to have a high click-through rate when you target them with precise email matching and uploading relevant CRM segments.

5. Don’t pay to market to existing leads.

One of the easiest methods to improve lead generation initiatives is to avoid targeting existing leads. Email matching may exclude these folks from your marketing strategies, lowering your total CPL.

What types of content work best for demand and lead generation?

The presence of a lead capture form should not distinguish demand generation content and lead generation material. Your material must represent the many goals you intend to achieve.

Lead-generating material must be valuable to prospects and warrant sharing their contact information. If it doesn’t deliver this, you may have someone’s data, but you won’t be setting the basis for sales. Leaving someone disappointed is never a good start.

A content piece can be significantly more successful if the value it provides corresponds to the buyer’s journey stage. They are interested in your business and items since they know they are buyers. Try to provide useful material that helps them understand their demands for your category or how to use the solutions they might buy from you. Beyond the topline, be specific in your responses.

The goals and nature of demand creation content are typically distinct. Ensure your content represents your audience’s current priorities. Engaging images and unique concepts will draw attention. Focus your headlines on a single point and use formats (like video) to make them stand out. Don’t be scared to use strong ideas and humor.

Keep in mind that certain content assets can drive demand and leads. In-depth research or an eBook filled with value for your audiences are wonderful assets for teaching and establishing authority, and prospects will willingly offer their contact information. Even if you have a multi-tasking asset, you should still structure and present the material differently to create demand and leads.

Make infographics and blog articles from your eBook rather than hiding them behind a lead capture form. Convert facts into attractive infographics that stand out in the LinkedIn feed. And provide links to the whole lead-generating asset.

Optimization for demand gen and lead gen campaigns

The more insight you have into your leads’ quality and conversion path, the more room you have to optimize your lead generation activities, apply lessons, and maintain boosting ROI. LinkedIn Lead Gen Forms provide a more detailed look at your campaign’s CPL. Conversion tracking, which correlates LinkedIn advertising exposure to specified website actions, exposes the effect of all demand-generating and lead-generation activities.

Using data like this, you can find the most successful demand and lead-generating techniques, test them, and improve around them. Lead generation marketers now have more tools than ever; testing is the best method to utilize them fully.