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Demand Generation vs Lead Generation for B2B

Demand generation and lead generation are two different marketing strategies, but they’re often used interchangeably because they share the same goal: To generate a qualified pipeline of new customers for your business.

To add insult to injury, they also share many of the same tools and tactics. 

But don’t get me wrong, they are different.

In this blog post, we'll explore how these two techniques compare to one another, the tactics each method uses, and when to use them.

Let's get right to it!

TL;DR — Demand Generation vs Lead Generation: what’s the difference?

It’s tempting to use demand generation and lead generation synonymously, but we shouldn’t. 

Demand generation focuses on brand awareness and product education, while lead generation focuses on converting prospects into qualified leads that can be nurtured into paying customers. 

Lead generation may fall under the general demand generation umbrella, but it’s a separate and specific part of the process that involves taking that buzz and enthusiasm for your products and services and turning it into revenue. 

I’d love to dive a little deeper, though. 

Let’s explore each one separately.

What is demand generation?

Demand generation, at its core, is the umbrella term for all marketing activities that promote your company’s products or services. Demand gen initiatives can help your organization expand into new markets, launch new product features, create buzz, generate press coverage, and re-engage existing customers. 

Read literally, you may think it’s only about generating some vague, unmeasurable interest.

In reality, demand gen is much more than that. It’s more than just a quick fix, a simple banner ad, or an email blast. 

Demand generation strategies are touchpoints throughout the conversion optimization and sales cycles.

It’s a commitment.

Demand generation is a commitment to forging long-term customer relationships with a strategic mindset. It’s an ebook, a newsletter, SEO-driven content, thought leadership, or subject matter interviews.

Examples of demand generation strategies

All B2B prospects, just like B2C, engage on a variety of platforms to socialize and get information. It’s only natural. We’re all humans. 

It’s critical your demand gen efforts don’t focus on just one or two channels. 

Providing a broad range of outlets ensures that you’ll be wherever your ideal customer goes, either directly or indirectly through retargeting. 

Let’s take a look at a few different strategies.

SEO-driven content

A compelling on-page and off-page SEO strategy built into your demand gen efforts will likely improve your rankings, bring in more visitors, and build authority with prospects just beginning their buyer’s journey — what we call top-of-funnel. 

Maintaining first-page rankings in search engines for your highest-value keywords takes lots of time and effort, but it can establish trust before a prospect even visits your site. 

And trust, well, trust is priceless. 

Customers who trust your business find you credible and will want to do business with you. This means greater advocacy, loyalty, and engagement. It sets the tone for your business.

Convinced yet? I hope so. 

Build your content strategy around your most important keywords to maintain your hard-earned high search rankings. 

Free trials, freemium subscriptions, and demos

After you create awareness and educate your audience, consider giving them a sneak peek into your product or service. 

Think about how many times you’ve signed up for a free trial, a freemium subscription, or a demo. 

You probably lost count, right? Me too.

This strategy is especially important in two scenarios — either your product is of high value or you’re new in the market. 

In both cases, demand gen is tricky because prospects aren’t entirely sure if the investment is worth it. To this end, offering up free trials and demos prove great demand gen strategies. 

As a matter of fact, big players like HubSpot still offer free trials. It’s a great opportunity to nurture prospects with informational emails during the trial, it makes them feel valued, and it educates them about your product’s best features. 

Guest posts

Guest posting is a phenomenal strategy if you’re looking to build authority. It’ll create more opportunities to get in front of viable prospects while also demonstrating your expertise in their area of interest. 

Remember I said trust was priceless? 

Well, building contacts with high-authority sites and posting content on their outlets helps readers in the awareness stage begin to know and trust your work more, moving them closer to becoming a lead and then a customer. 

I want to be crystal clear about something, though.

The value of guest posting is for brand building, not link building. Google’s own John Mueller said so himself. It results in unnatural links and you really don’t want that. 

Ad campaigns, retargeting, and lookalike audiences

I want to draw special attention to paid ad campaigns. 

Paid promotion is critical for attracting members of your specific target audience who don’t know you or aren’t following you. 

If you’ve been working on your marketing tactics for a while, you’ve likely advertised on major platforms like Google, Facebook, or LinkedIn. If not, it’s time you reevaluate. 

And remarketing? Well, that’s a whole other ball game. 

Remarketing is hugely important when it comes to demand gen — it helps increase awareness and subtly reminds past customers and visitors to come back. 

For example, you can upload your audience list to your ad platform and target people who, say, abandoned their cart before checking out. 

You can even take things a step further with a smart targeting strategy like Facebook’s Lookalike Audience, LinkedIn’s Lookalike Audience, or Google’s Similar Audiences. 

I call it smart because it builds a bigger audience base for you, one that shares certain characteristics with your existing customers and most engaged followers. 

Neat, huh?

What is lead generation?

Lead generation is the process of drawing prospects to your business and piquing their interest through nurturing, all with the end goal of converting them into bonafide customers. 

Think job applications, blog posts, coupons, events, and lots of other online content. The fruits of your demand gen efforts. 

Lead gen is a way to provide prospects with enough goodies to get them interested in your products or services so they eventually warm up enough to want to hear from you. 

There are a plethora of strategies you can use.

Ultimately, though, what dictates the one that works best for you depends on the overall goal of your campaign. 

Examples of lead generation strategies

Lead generation content is usually more in-depth than demand gen, and more tailored to the specific needs of the individual customer. This is especially true in B2B lead gen

I like to think of it as content created specifically with your ideal customer profile’s pain points in mind.

Let’s check out a few examples.

Gated content

Gated content is content on your site that can only be accessed or downloaded after a user or visitor fills out a form with specific information about themselves. 

This information is typically passed on to your sales team. But that’s not what I want to get into here. 

Gated content is a wonderful way to capture important information about your site’s visitors — think email addresses, titles, company names, phone numbers, etc. 

This type of content marketing is also referred to as a “lead magnet.”

So, in exchange for this very valuable information your lead just gave up, they now get access to your infographics, case studies, newsletters, videos, and anything else you want. 

I must highlight, be mindful of the fact that visitors will be expecting something highly targeted and worthwhile. 

Failing to do so is the quickest way to lose that hard-earned trust we talked about earlier. 

Ebooks, reports, and other downloadables 

These resources are often included as gated content, but I wanted to address them separately because of their importance. 

In-depth, downloadable resources like ebooks, reports, and other educational content can be highly effective in conveying thought leadership and helping the reader navigate the consideration stage. 

These resources typically dive much deeper into a subject covered in a demand gen piece of content.  

Again, we don’t want to treat these resources as elevator pitches.

Readers today are too good at sniffing out sales pitches for you to get away with slapping it on. They’ll be immediately turned off if they sense the entire document is designed solely to sell them on a service. 

The best resources walk the fine line between informative and persuasive. 

Someone who wants your content may not necessarily be a lead yet. Make sure you address their pain points and use objective data to show them your brand is trustworthy and looking out for their best interests. 

Webinars, podcasts, and other live events

There’s no way around it, for your lead gen strategy to succeed, you need to think about producing dynamic content. 

What I mean by dynamic is, think beyond copywriting. 

Audio and visual content like webinars and podcasts aren’t just good for accessibility reasons, they’re also easily digestible and help you capitalize on the power of personal connection. 

It’s an effective way of forging a stronger relationship during the consideration and decision stages of the funnel and can continue to nurture customers once they sign on. 

For example, you can design a webinar to help with specific parts of a prospect’s pain point, leading to more full-scale assistance in the form of a paid resource, freemium feature, or sign up. 

I also love that this is a powerful method of generating leads at volume — as many as 500 or 1000 at a time. 

Demand Generation vs Lead Generation metrics

To measure the ROI of your demand gen or lead gen efforts, you must keep track of multiple data points. 

What I mean by this is you should look beyond just downloads. For example, how do you know if a certain ebook reached the right audience or if it motivated them to take action? 

Well, there are certain metrics and KPIs you can use to track how well a certain campaign performed. They’ll help you deconstruct each of your acquisition and referral channels to get the full picture of your inbound generation performance. 

Though certainly not exhaustive, here’s a list of ways you can track performance for your demand gen and lead gen campaigns. 

Demand generation metrics:

  • Cost per acquisition (CPA) — measures the cost to acquire a single paying customer through a specific campaign or channel.
  • Customer lifetime value (CLV) — used to project the revenue that a single customer will generate throughout their lifetime for your business. 
  • Close rate per channel — helps determine how many of your prospects and leads (per channel) are actually turning into customers.

Lead generation metrics:

  • Click-through rate (CTR) — the percentage of viewers that click your CTA on any ad, link, email, landing page, etc. 
  • Conversion rate — the percentage of leads that perform a specific action on an ad, email, landing page, etc. This can be anything you define as a goal, like subscriptions, downloads, clicks, or purchases. 
  • Time to conversion — the time it takes between key conversion steps in your buyer journey. A very helpful metric to get a clear picture of the length of your sales cycle. 

Prep your demand gen and lead gen for success

Demand generation and lead generation are both fundamental marketing strategies, especially in B2B. 

You can’t generate leads effectively and sustainably if you’re not also generating demand — and generating demand loses its value if you can’t translate it into leads. 

Right?

Both must work together to provide a healthy pipeline and healthy conversion. 

On top of that, I’m glad we got a chance to make this distinction. Understanding the difference in your marketing strategy will help you drive more leads that are more likely to be qualified and convert to revenue — and at a lower cost. 

 

About the Author

Carlos Silva is an SEO Content Manager at Chili Piper. He's passionate about the craft of writing and the power of storytelling. You might find him trail running through the mountains of Valencia, Spain, or writing in his journal at home, but you'll always find him reading something new!

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