Battle of the Gens: Demand Generation vs. Lead Generation
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Demand generation vs. lead generation — what's the difference? Which is better? B2B marketers should make both work together for results.
B2B marketers are experiencing more pressure than ever to increase the quantity and quality of leads, outsmart the competition, and prove ROI in the process. The challenges can seem overwhelming, right? You need to know where to focus your marketing efforts to reach your goals. If it’s demand generation vs. lead generation, which helps the most? Or are they really the same thing?
While some may use the terms interchangeably, confusing demand generation with lead generation can dilute your strategy and lead to disappointing results. You need to note key differences between the two activities before you can tackle either effectively. As the Content Marketing Institute puts it, “Demand generation is focused on shaping the audience’s perspective, while lead generation is focused on capturing their information.”
Demand generation is the set of marketing activities focused on attracting an audience and drawing them toward your product or service. Lead generation is the harvesting of that demand. It’s the set of activities required to engage buyers who are actively trying to resolve their problem.
In essence, demand generation tries to pull buyers into the very top of the funnel and keep them moving to create pipeline opportunities, while lead generation is about gathering contact details for Sales to close.
It’s and, not or.
So in the unending battle for time and resources, which tactic should win the demand generation vs. lead generation battle? The answer is that you’ll need a combination of both strategies to accomplish your objectives and impress your sales team.
Demand generation alone, without lead generation, will make it difficult to measure how the demand you’re creating is translating to opportunities for the company. On the other hand, lead generation by itself limits your reach. If you bury all your great content behind a form — ensuring only a small audience is actually getting it — then you have to focus more energy on creating buzz for your content than for what you actually want to sell. That’s not to say there are no companies effectively focusing on lead generation alone, but it’s like putting all your eggs in one basket. Trying to pick a winner in the battle of demand generation vs. lead generation leads to wasted time and energy. Instead, you need to make both work together.
I might sound like a lot, but to be effective long term, you’ll need a strategic demand generation program and a complimentary lead management strategy that work together to meet your goals.
What makes a good demand generation strategy?
A comprehensive demand generation strategy supports the full customer lifecycle:
Creating demand (or desire) for your product or service
Harvesting that demand to create pipeline opportunities
Creating ongoing demand in existing customers through marketing aimed at retention or upsell
That’s what you need, right? But wait, there’s a catch…
Demand gen is all about sharing content with as many people as possible, as freely as possible. That means limiting your gated content (gasp!), which means missing out on contact information for new leads Sales can follow up on. Not so fast on impressing the sales team, huh? Well, the good news is that you can nest a lead generation strategy within your broader demand generation plan to help create distinctly measurable leads alongside the broad engagement you’re getting through your demand generation efforts.
Demand generation is more about your buyers and less about you.
Demand generation is about reaching buyers who aren’t yet looking to solve a problem. These are buyers at the very top of the funnel, who may need to be pulled along to identify that they have an issue to solve. Or they may need education that your solution is viable for their particular issue. Successful demand generation is all about reaching those potential customers. In a sense, demand generation creates an “aha moment” for the buyer, helping them see an issue they may not have thought about before.
Demand generation is rooted in a distinct and influential brand voice and enables the self-service journeys of today’s buyers to experience your brand, products and solutions on their terms.
To do this, your demand generation strategy needs to focus more on the needs and realities of your buyer and less on your product or service. At this stage, your goal is to create that “aha moment” where your buyer envisions a better future for themselves, their department and their company.
Fostering the “aha moment.”
For one of our clients who sells pre-employment testing, this “aha moment” often happens at a time of high turnover. Owners and HR managers may be looking at employee onboarding, engagement or compensation levels as the culprit, but our client knows that high turnover often stems from the quality of the hiring process. By getting their potential buyers to understand that changing their hiring and selection process may correct the turnover problem, our client is creating demand for their solution.
That’s how our client reaches top-of-funnel buyers: focusing their demand generation strategy on the buyer’s problem (high turnover) and not on a particular product or service. At least not at first. Once they’ve created demand for their solution, they transition to a lead generation strategy that gathers contact details through an offer for a product demo or trial. The demand generation strategy continues after the initial trial period, connecting digital and offline strategies to draw prospects deeper into the funnel to create pipeline opportunities.
Five key ingredients for effective demand generation:
A well-defined target audience. Before you can work on messages and tactics, you need to get crystal clear on your buyers. If you have buyer personas, that’s a great place to start. If not, work with internal stakeholders to make sure you have a very strong understanding of the buyers you’re trying to attract. If, as with many B2B buying decisions, your product or service requires a buying committee, make sure you understand the whole ecosystem. Define targets by title, role, company type, industry, etc. And make sure you differentiate between your top targets and influencers.
Documented message priorities. Once you’ve defined your buyers, it’s time to map the key topics and themes that will connect that audience to your product or service. At MX, we think of these as pillars. You’ll want to identify the key pillars that would help generate demand, and then map sub-topics that connect to those topics. Prioritize pillars with your target audience in mind. In many cases, you’ll want to focus on educating your audience and creating interest for your category of products or services before you begin talking about your offerings specifically.
Value-oriented content. Remember, demand gen is about helping to shape your buyer’s perspective and create a desire for your product or service. These interactions often happen before buyers know what they’re looking for, or even that they have a need. So in order to hook them, you need to create content that provides value. Start with the critical needs your buyers may be facing, and create content that helps them address their challenges or identify opportunities.
And audience-centric focus. When it’s time to reach your target audience, make sure you’re using the tactics and channels that are most likely to reach them. Consider a balanced mix of inbound and outbound marketing tactics, such as content marketing, social media, direct mail, telemarketing, digital and social advertising, SEO, and emails. Online is where buyers primarily first conduct their research, so offering a digital experience of ease and value, ensures you can differentiate your brand and engage new audiences. Think audience-first and you’re more likely to make a trustworthy, positive lasting impression with your potential buyers.
Frictionless engagement. Though demand generation is different from lead generation in that it’s not focused on capturing contact details for leads, it doesn’t mean that you shouldn’t give your audience a way to respond. While lead generation brings the form front and center, the call to action in demand gen often comes toward the end of content. Make sure you’re giving your audience an easy way to raise their hand by providing simple conversion paths for customers that want to learn more, request a quote or speak with an expert. B2B demand generation marketers are continuously innovating engagement opportunities by offering e-commerce for B2B, community design, social community building, digital assistants and chatbots, and AI-powered personalization and predictive analytics.
Plan for best-in-class demand gen and lead gen.
By focusing on these five keys, you can build a knock-out demand generation strategy that ultimately draws buyers toward your solutions, helping you to beat the competition and meet your goals. But results won’t happen overnight. Demand generation has a long tail, and it can take years to achieve ROI. And remember that demand generation is not lead generation. Demand generation is about stimulating demand, not delivering sales-qualified leads. If you want the best of both worlds, make sure you’re ready to build a strong lead generation plan to work in tandem with your B2B demand generation program.
Success isn’t about picking a winner in the demand generation vs. lead generation comparison; it’s about making the two work together — and well. That can be a tough job, but it’s the best way to generate more high-quality leads, prove ROI and get ahead of the competition. As you look to the future, just know the best B2B sales and marketing teams are integrating both under a strategic experience engine that balances brand, pipeline and long-term growth.
