Demand Generation vs. Lead Generation - A Short Guide for Marketers

ByDanica Jovic
April 13,2022

Both demand generation and lead generation are highly valuable marketing strategies that businesses need to employ in order to generate new leads and boost their customer base. In other words, a lead generation effort cannot be effective without a demand generation component.  

As such, the demand generation vs. lead generation comparison can sometimes get a little confusing. But even though these two strategies work towards the same goal, they are fundamentally different. In a nutshell, demand generation involves activities that build awareness about your service or product, whereas its counterpart is tasked with turning that interest into leads. 

In an effort to dispel some of the confusion, our guide delves deeper into the main characteristics of both strategies.  

What Is Demand Generation?

Demand generation or demand gen is the process of getting the public interested in your company’s products and/or services. The idea is to develop a targeted marketing program that drives awareness of what your business is offering and draws visitors to your website. Most people think that this comes down solely to improving the visibility of your content on different social media channels. However, a big part of demand generation is helping your target audience identify problems and then offering your service as the solution.

For example, a demand generation strategy targeting small business owners who are uncomfortable with the idea of being their own bookkeeper will highlight the importance of focusing on growing one’s business while passing off this ‘confusing’ and ‘overwhelming’ task to bookkeeping service providers.  

Demand generation, or rather awareness, is on top of every sales funnel, followed by lead generation strategies. Think about it as the starting point of a consumer’s journey through the sales funnel.

Demand generation content comes in a variety of forms, including influencer posts that show how effective your services are or sharing free tools and articles. It’s important to note that B2B demand generation content is non-gated, meaning that your audience doesn’t need to provide personal information in order to engage with it.  

What Is Lead Generation? 

Unlike demand gen, which focuses on calling attention to the need for your product/service,  lead generation activities seek to convert your audience into leads. If implemented properly, the combination of lead generation and demand generation will bring in new clients and boost your consumer base. 

Lead generation is built on demand gen marketing strategies. If your company has a successful demand generation program, the big pool of potential prospects is then directed to the lead generation team that will nurture them into leads. Lead generation relies on strategies that include collecting names and contact details from the audience that show some interest in the company’s services. 

The contact creation process in the case of lead generation marketing involves free webinars and tutorials, product guides, whitepapers, ebooks, free trials, and other content that visitors can get access to if they disclose their personal details. 

The Difference Between Demand Gen vs. Lead Gen 

A B2B marketing strategy that blends demand gen and lead gen components enables the company’s sales team to convert more leads into prospective buyers and thus increase revenue. But if your business uses both strategies without knowing the purpose of each, you’ll probably end up with a poor audience pool. Even though demand gen and lead gen are similar processes and work hand in hand, businesses must acknowledge the clear distinction between the two in order to implement a successful funnel strategy.  

In the lead generation vs demand generation comparison, the key difference comes down to the content being used. When it comes to demand generation, the purpose of the content is to generate brand awareness and capture an audience interested in the company’s products and services. The content created for lead generation is lead-oriented, and its purpose is to turn the audience into leads. 

Simply put, demand generation produces content that is focused on demand, while lead generation produces content that’s focused on collecting information about leads. 

Another key difference between demand generation vs lead generation is the marketing funnel and the way targeting is used in both cases. The most important thing to identify is the distinction between people who don’t know about your products or services and those familiar with your brand.  

Demand generation is not about creating content that will reach as many people as possible but creating brand awareness and reaching those who actually might be interested in your products and services, and thus, most likely to become leads. 

In the demand creation vs lead generation comparison, content promotion is also different. Demand generation programs don’t pay for sharing content with people who are familiar with the brand. Once you have a base of people who know about your products and services, lead generation programs enter the fray. 

Bottom Line 

If you want to run a successful marketing campaign, both demand gen and lead gen strategies must be incorporated. It’s pointless to drive the right traffic to your site if you don’t have the necessary tools for lead conversions and following up with prospective clients. And although these two components work towards the same objective, it’s important to remember that they play uniquely distinct roles in the sales process.

What is demand generation content?

Demand gen content is a part of demand generation marketing, and it includes various materials like free trials, books, online guides, and video tutorials. The material is free and intended for an audience not familiar with your company’s products or services. The objective is to build awareness of your offering in your target market. One of the key characteristics of this strategy is to identify problems for potential customers and offer to solve them.

What are demand generation tactics?

Marketers use demand generation to raise awareness about their brand and help the audience identify problems. For example, if someone doesn’t know how to create an invoice, a YouTube tutorial with an explanation can be a good lead. If the video includes an accounting software product that can help you solve the problem, it's a demand generation strategy.

Why is demand generation important?

Demand gen is used to grow brand awareness or create a demand for the company’s products or services. It’s the first step in the marketing funnel. If you want to know more about demand gen, check out our demand generation vs lead generation guide.

About the author

Danica’s greatest passion is writing. From small businesses, tech, and digital marketing, to academic folklore analysis, movie reviews, and anthropology — she’s done it all. A literature major with a passion for business, software, and fun new gadgets, she has turned her writing craft into a profitable blogging business. When she’s not writing for SmallBizGenius, Danica enjoys hiking, trying to perfect her burger-making skills, and dreaming about vacations in Greece.

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Both types of CRM could benefit your company, but if you want to focus on pinpointing your audience’s needs, an analytical CRM is what you need. Collaborative Customer Relationship Management The third major CRM type deals with the gathered information in a different manner. Namely, this breed of CRM emphasizes collaboration and customer support services. It allows the various teams in your organization to share data and improve cooperation between departments such as marketing, sales, and support. This type of software use the following tools: Interaction management Channel management  Using collaborative CRM products will help your business better cater to its customers through different channels: live chat, e-mail, phone calls, or social networks. Determining the best communication channels isn’t the only thing this CRM type can help with: Tracking interactions between the company and its customers using logs gives all relevant departments insight into the minutiae of support processes.  Keeping in mind that 33% of Americans think about changing their provider for something after only one poor customer service experience, employing this type of CRM can be crucial for companies that are still in the process of establishing a loyal base. Campaign Management CRM One of the five important types of CRM, useful for strategies of all kinds and yet often overlooked, is a campaign management CRM. It mixes the functionalities of operational and analytical systems in the service of sales or marketing campaigns. Running campaigns wouldn’t be possible without gathering, organizing, and analyzing data to distribute the content to the right people, and these CRMs make that process much more streamlined. Strategic CRM By constantly learning about its customers and adjusting to meet their needs, businesses can boost their profits and establish themselves in a given market. To that end, the main goal of strategic CRM software is to use data for forming and implementing business strategies to foster long-term customer relationships. Instead of predicting customer needs, this type of CRM lets the customer inform the business strategy. Bottom Line Different types of CRM systems help businesses speed up operations, handle extensive data, share it among departments, and create and execute business strategies. They all serve the same purpose - helping your business grow and minimizing manual labor - but have different approaches to achieving that. In the ever-lasting competition between companies to win clients, choosing the right CRM software can be a game-changer.
By Danica Djokic · March 01,2022

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