Demand Generation and Lead Generation: Not the Same!

We often hear marketers use the terms ‘demand generation’ and ‘lead generation’ interchangeably. It makes sense at a high level: both activities are performed with the goal of driving new leads. However, there are distinct differences between the two.

In the simplest of terms, lead generation is just one type of demand generation. While the two activities are related, many marketers don’t understand that you cannot do lead generation without a strategic demand generation program in place first. Understanding this relationship is key to achieving objectives, especially as marketers are increasingly expected to drive revenue rather than just leads.

To make matters even more complicated, the explosion of marketing technology also confuses the two terms. Today’s marketers are getting so specialized that their functional activities can be attributed to a distinct part of the funnel. Many marketers believe that demand generation is solely a top-of-funnel activity, but that’s no longer the case. McKinsey & Company found that,

“The buyer’s journey is no longer linear. It is a continuous loop from research to evaluation to purchase, which now includes the sharing of the purchase experience. This influences repurchase rates and additional purchases from other buyers in their own research phase.”

Demand gen programs touch every point of the conversion and sales cycle, but still, many organizations tend to skip demand generation activities because of limited budget and pressure to see an immediate ROI. While it is absolutely important that today’s marketers prove the value of their activities in the form of sourced revenue, it’s important not to forget the principles of marketing. If your goal is to generate marketing qualified leads, the best place to start is demand generation. Let’s dive into the specifics of demand generation and lead generation.

Demand Generation

Demand generation can be defined as all marketing activities that create demand or awareness about your product or service, company and industry. Hubspot refers to demand generation as the “umbrella of marketing programs within an organization.” An effective demand generation strategy not only increases brand awareness, but also opens the door for sales territory expansion and re-engagement of existing customers. These programs enable a measurable buzz in the market through marketing centric activities.

Activities that are found under the demand generation umbrella are content or thought leadership driven with the goal of establishing your company as a leader. Demand generation content is not gated, and exists to establish a relationship with prospects and customers. Examples include:

  • A PPC Campaign
  • A product video hosted on YouTube
  • A Booth at an industry event

Some of these activities may be considered lead gen activities at your company, and it’s true that they could be – but they shouldn’t be. Read on to find out how lead generation differs.

Lead Generation

Marketo defines lead generation as the marketing process of stimulating and capturing interest in a product or service for the purpose of developing sales pipeline. With the shift in the buying process and technology, there is an increase importance for marketers to focus on lead generation functions. Lead generation strategy should focus on the collection of leads usually in exchange for content using tools like forms and website tracking software. These leads would then be added to your company’s database for further marketing or sales follow-up.

Types of activities that are found under the demand generation umbrella would include:

  • A form ahead of your whitepaper or webinar
  • A form on your PPC landing page
  • A form kept at your booth in an industry event

Therefore, while demand generation establishes your company as a leader, lead generation is the act of collecting information in exchange for content as a result of that demand. You can’t effectively do B without A. When you get to the lead generation portion of your demand generation strategy, your audience will be more willing to exchange information for valuable content, and thus more likely to become a customer.

Differentiating the two can be confusing, and with the rise in digital technology it only increases the complexity around the two topics. In conclusion, if you are tasked with developing lead nurture programs in effort to provide higher qualified leads to sales, the first place to start that process is to look at your overall demand gen activities.