To make a customer, you first have to attract potential customers. But if all you ever do is attract them, and not engage and sell to them, your company won’t grow fast enough. This is why, when you hear about demand generation vs lead generation, your reaction should be that you need both, not one or the other.
Neglect either one of these, and your revenue will eventually feel the effects. You’ll either shrink your pool of qualified leads and potential customers, or you’ll fail to convert as many as you should have the ones you have.
In other words, both lead generation and demand generation play huge roles in business growth. You need to commit to and succeed in both if you want to see sustained revenue increases.
Let’s take a look at each concept.
What is demand generation?
Demand generation focuses on attracting new potential customers. In funnel speak, the focus here is on top-of-funnel marketing. You’re creating interest and curiosity about your products and services. You’re making people lean in.
When we talk about how marketing is about getting attention amid the intense competition and chaos of the digital world, we’re talking about demand generation. Getting noticed. Being memorable. Becoming part of the conversation in people’s minds.
“Did you hear about….” is a demand generation question asked by someone who was successfully marketed to.
Key components of demand generation
Demand generation refers to any type of marketing whose objective is to gain attention, interest, or curiosity. You’ll ask people to do things like click, read, open, watch, and comment.
Your goal is to position a product, service, or brand as something positive, helpful, useful, or trustworthy in your particular industry.
Demand generation marketing could be:
- Helpful
- Informative
- Memorable
- Trust-building
- Educational
- Free
- Easily-accessible
You’ll use tactics such as social media marketing, influencer marketing, email campaigns that aren’t directly selling, giveaways, webinars, and free content. Larger companies might also use legacy media channels like TV and radio.
The role of demand generation in the buyer’s journey
Not every potential customer is ready to buy right now. But if you’ve done effective demand generation marketing, when the time comes for them to buy, your company or product will be at the top of their mind.
At the top of the sales funnel, people are just shopping around. They’re not ready to make decisions. They’re not ready to fill out forms, sign up for consultations, or give you their contact information.
Demand generation marketing engages people who aren’t even looking, and those who are looking but aren’t necessarily that serious about it yet.
For example, a customer may be happy with their current car insurance. But they know they’re planning to buy a new car in the next couple of years, and when they do, they might take a fresh look at their insurance. Demand generation marketing gives them a direction to go when that time comes.
KPIs and measurement of demand generation
Demand generation marketing, broadly speaking, gets measured with broad metrics. You’re focusing here on reach more than engagement.
That means things like visibility, social mentions and shares, opens, click-through rates, and webpage traffic.
What is lead generation?
While demand generation is about creating desire, spurring positive feelings, and being remembered, lead generation is about inspiring action. With demand generation, no one has to commit to anything. With lead generation, someone is going to call you or fill out a form — and you’re expecting them to do so.
Now, we’ve moved down the funnel a bit. Desire has grown, and the motivation to act, engage, and possibly buy has taken over. Now, the lead is thinking, “I need this, or I want this, and maybe this is the direction to go.”
You’ve got their attention. Now, you’re converting that attention into something you hope results in a sale.
Key components of lead generation
Lead generation refers to any type of marketing whose objective is to collect customer data, initiate follow-up, nurture a relationship, actively engage with prospects, or make an offer and complete a sale. You’ll be asking potential customers to do things like sign up, join, request, try a sample, start a free trial, or make a purchase.
Lead generation always comes with some sort of offer, and usually that’s in exchange for their contact information. This is the goal — to obtain their information so you can follow up and pursue the relationship and an eventual sale.
Lead generation marketing could be:
- Direct
- Specific
- Helpful
- Empowering
- Solution-oriented
- Offer-driven
- Urgent
Media for lead generation marketing can overlap quite a bit with demand generation media, but it’s more in how you use it. You can use social media, but the call to action will be more specific than “learn more.”
Lead generation tends to be much more effective when done with the help of marketing automation. With automation, you can develop follow-up processes and sequences that you can track for people at all sorts of stages in their customer journeys.
Lead-gen marketing uses assets like landing pages, paid ads, live chat, and lead magnet tools like white papers, eBooks, free trials, and time-limited coupons and discounts for new customers.
Pro tip: Minimize friction at conversion points by reducing the number of fields that prospects must fill out. The quickest way to boost your results is to eliminate CAPTCHAs and other anti-spam checks. Instead, use Akismet to block 99.99% of spam without interrupting the user experience.
The role of lead generation in the buyer’s journey
With lead generation, you’re requiring a decision that carries some sort of consequence.
The prospect thinks, “Either I engage with this, and then I can expect certain things to follow, or I can choose not to engage.”
Lead generation presumes a pre-existing level of interest. If someone complains about being “sold” by your marketing, in the negative sense, that simply means this person hasn’t yet experienced enough of your demand marketing. You’re pushing them too far, too early. They aren’t ready to give you their contact information. They feel “pressured.”
But a potential customer who knows what they need, knows what they’re looking for, and wants to find a good solution won’t respond to lead generation marketing like that at all. They want it. They want helpful content, answers, customer service, and the opportunity to move forward with someone they believe can help.
KPIs and measurement of lead generation
Lead generation gets measured by the sorts of metrics you can more directly link to revenue. This includes things like signups, responses, quote forms filled out, demos requested, free trials started, and conversions. Other lead generation metrics include cost per lead and lead response time.
All these metrics lead to money. More signups mean more sales. Lower lead response time means more leads engaged more efficiently.
Key differences between demand and lead generation
As you’ve probably picked up already, while some overlap exists between demand generation and lead generation, these are very different types of marketing. Let’s explore the differences in more detail.
Core focus and purpose
Demand generation marketing focuses on building an audience. When this type of marketing has worked, if you speak, people listen. If you make an announcement, people pay attention. You have their trust, or at least their awareness.
Lead generation marketing works at converting the audience you’ve already built through demand generation. If you have 100,000 people who have expressed or felt some level of interest, how many of those can you motivate to give their contact information or request your lead magnet offer? That’s the question lead generation marketing is answering.
Timing and stage in the buyer’s journey
The timing of both of these types of marketing can vary dramatically.
On one hand, this can all happen in a single session with a new lead.
Suppose a person already knows they need something you sell, but they haven’t acted on it yet. This person could be called a “warm unknown prospect.” Maybe they’re the type of person who makes fast decisions.
This person sees a post on social media. Their interest is piqued because they’ve already been thinking about something they need related to the content of the post. So, they engage with the post by clicking on it, which takes them to an article on your site.
From there, they explore your site, look at your products, and then come across a lead magnet offer for a 30-day coupon for new customers. They sign up. Now, the clock is ticking. In less than 30 days, this person could travel through all stages of the buying journey and make a purchase, becoming a customer.
In fact, it could go even faster than that. They could make a purchase the same day.
However, the same process could be drawn out over months, even years, for another potential customer.
Some industries have shorter sales cycles, and others have longer ones. Sometimes, you continue to nurture and develop the relationship merely to sustain interest. During that time, you also continue to make lead generation offers. Some in your audience will act on those offers.
Strategies and tactics
Strategies for demand generation marketing include things like:
- Attention-getting language or multimedia imagery
- Humor
- Trust-building content
- Low-stakes offers like reading reviews and consuming free content
- Consistent content and media presence
- Low or no-pressure content
Strategies for lead generation marketing include things like:
- Targeted and measurable offers — including free ones
- Lead magnets that collect contact information
- Follow-up emails
- Demonstrations, consultations, free trials
- New customer discounts, promotions, and giveaways
- CTAs that demand a decision
Measurement and metrics
When demand generation works, your audience grows with people who are open to becoming a lead. You’re not reaching out directly to them yet, but if you did, they’d be more likely to be responsive.
When lead generation works, your engaged audience is ready to consider becoming a customer.
You measure the metrics that support each of these outcomes.
Demand generation gets measured with visibility, likes, opens, shares, web traffic, views, and seconds or minutes watched, for something like a webinar or a YouTube ad.
Lead generation gets measured with form submissions, demos and consultations scheduled and attended, redeemed coupons, converted free trials, as well as the process-metrics like cost per lead.
Why you need both lead and demand generation
You need both because each type of marketing fills missing gaps in the other.
If all you do is demand generation, you’ll build an audience, but you won’t convert nearly as many of them into paying customers as you should have. If all you do is lead generation, you’ll have too small a pool to draw from, and will be constantly trying to attract new leads from people who’ve never heard of you.
Generating leads from total strangers takes a lot more work and money than generating leads from people who are at least familiar with you.
The analogy would be like trying to irrigate a field with water from a trickling stream, rather than an abundant river.
Demand generation provides the river. Lead generation waters the field.
FAQs
Can lead generation work without prior demand generation?
Yes, but it requires a lot more effort, and will usually produce a lot less revenue. With sufficiently targeted marketing, you can create leads from a cold audience. But that target audience, which has to be pre-existing, needs to already be large enough to generate enough quality leads.
What are common challenges in lead generation, and how can I overcome them?
Common challenges include not knowing where to look, not having sufficient follow-up marketing, and being timid in making or closing the sale — letting good leads languish on the vine.
As for knowing where to look, with demand generation marketing, you can build your own audience and then find leads from there. Other than that, look for pre-existing media where your audience already congregates, such as an industry event. Or, use targeted online advertising.
For the follow-up problem, you want to create the plan before launching the lead gen campaign. Otherwise, you get a bunch of leads, but you miss the opportunity to convert them. Create a plan and a process for how you will contact your leads. Have a phone script. Have an email welcome series. Send them something in the mail.
To inspire confidence in prospects to take action, you must first have confidence in your own ability to sell and the essential role your product or service will play in their lives. For larger companies, it takes a highly-trained sales team and a process that works, and that adapts to the needs of the moment for each prospect.
How can Akismet help in improving the quality of my lead generation efforts?
A big part of lead generation is online form submissions. And this is where you run into the annoying problem of bots and scammers filling out your lead generation forms. To prevent this, many companies turn to CAPTCHA and other visual puzzles to verify people are humans. But this just passes on the annoyance to your leads. Making them solve puzzles doesn’t set them up to be converted into customers.
Akismet helps improve lead generation by securing your forms from scammers without forcing your leads to slog through silly puzzles they can’t read and can barely see just to get a hold of your lead magnet or sign up for your free demo or consultation.
No puzzles. No roadblocks. And, no spammers. Your forms just work, and it all happens in the background so no one even knows it’s a thing.
What types of companies generally use Akismet?
Over 100 million websites currently use Akismet, including enterprise clients such as Microsoft, Bluehost, and ConvertKit.
Here’s more about ConvertKit’s experience with Akismet.
Where can I learn more about integrating Akismet with my marketing efforts?
Find out more about how Akismet works in the background to create a zero-friction web form experience for your leads.
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