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Introduction & Strategy: Demand Gen. vs. Lead Gen.

Demand Gen. vs. Lead Gen.

Lead generation and demand generation are both common approaches in online sales, and while they share similar traits, they accomplish different things. As an advertiser, it’s crucial to understand both of these methods in terms of the results you hope to achieve from your campaigns.

In the simplest terms, demand generation occurs at the top of the funnel and is the process of generating initial awareness and demand in what your brand has to offer, while lead generation is the act of converting that initial interest into customer names or contact information that your company can follow up on, otherwise known as leads. However, there’s much more to these two concepts than our definitions, so let’s explore a little further.

Demand Generation

The goal of demand generation is to create demand for your product or service by building awareness of what your company offers. There is no “silver bullet” or precise formula for demand generation. Rather, you should employ various efforts to tell the story of your brand and demonstrate to your audience why your product solves a specific issue in their lives. In short, you are creating demand for your product or service by educating prospective customers on a challenge that exists in their lives and making a case for why it is worthwhile for them to invest in your solution.

One of the most effective ways to educate consumers about a challenge that exists in their lives is by providing quality content that is informational, accessible and free. Demand generation content can come in many forms, including ads, blogs, infographics, social media channels, press releases, case studies, podcasts and more. These materials should clarify the problem faced by consumers, and make a clear case for the solution (i.e. your product). Once the consumer is convinced that a solution is needed, it sets the stage for you to further make the case as to why your solution is the best one. 

Demand generation often requires significant thought and creativity, as companies need to build a convincing case for why a consumer has an issue that can only be solved by your product. When done right, demand generation both builds and hones your target audience, helping to generate interest and establish trust.

Lead Generation

With lead generation, on the other hand, the consumer already has a specific problem in mind and is searching for a product or service to fix it. As consumers search, marketers benefit from gathering consumer information, such as an email, phone number or home address. Once the initial connection is made, this info can be utilized to guide the consumer through the marketing funnel

When a consumer visits your site, there is no guarantee that they will return — thus, it is essential to capture their information for follow-up. Obtaining a functional email address is the goal, but consumers are wary of freely offering their email, knowing it will most likely result in their inbox being flooded with promotional offers. In order to make that “Sign Up Here” box more enticing, brands need to offer something of value in return. This can come in the form of a discount, free trial, video series, webinar, eBook, white paper or similar content –  as long as it is something tangible and complementary to your brand.

Another avenue for lead generation is your product’s landing page. Consumers access landing pages by clicking on an ad or another online marketing asset. Just like email sign-up boxes, lead generation landing pages should attempt to collect consumer info in exchange for an offering of value. Landing pages should only contain one clear call to action — too much information might cause the reader to become overwhelmed. It is also important that the landing page deliver on the promise of your ad, be it a discount code, free trial or educational resource. 

Once leads are secured, marketers need a way to sift through them to find those most likely to convert, termed “qualified leads.” Marketers should adopt a lead scoring technique to assess the customers who are most ready to buy based on their level of engagement. For example, someone who downloads an eBook could be classified as a good lead, someone who watches an entire product overview video a great lead, whereas someone who unsubscribes from your mailing list might not be worth any further investment. This ranking of leads allows companies to focus their efforts on consumers who demonstrate a predisposition to making a purchase — teeing themselves up for success.

Remember, one strategy isn’t better than the other; they simply lend themselves to different goals and occupy different levels in the marketing funnel. If you are more focused on the top of the funnel, demand generation is an excellent way to build awareness. If you are more focused on moving customers through the middle and down to the bottom of the funnel, we recommend opting for lead generation. Both demand generation and lead generation are excellent to have in your playbook, and it’s up to you to decide which one will serve your overall game plan best.