Demand Generation vs. Lead Generation: What’s the Difference?


Sep 02, 2020

The terms “demand generation” and “lead generation” are used interchangeably, so it can be confusing to understand how they differ.

Moreover, both demand generation and lead generation are relatively similar, although their goals and processes make them distinct. So, they look similar, sound similar, and share similar characteristics… but they’re not the same thing?

The short answer is no.

Both processes are vital when it comes to creating a successful marketing strategy, but you’ll only be able to maximize your efforts if you understand the differences between demand generation and lead generation.

Need a refresher? Here’s everything you need to know about the differences between demand generation and lead generation.

Demand generation defined

Demand generation is the bulk of all marketing. It’s bringing attention and awareness to your brand or product through various processes.

Demand generation can be broken down into three phases: create demand, identify demand, and nurture demand.

Each phase feeds into the next and creates a never-ending marketing loop whose ultimate goal is to get people interested enough in your product or service to buy it. How you create demand will depend on your business.

For example, you might create informative blog content on your brand’s website in hopes that someone who might need your product will see it. Or, you may consider paying for advertisements on the web.

There’s no right or wrong way to pursue demand generation, but it may take some trial and error to find the most effective route for your business.

Lead generation defined

Lead generation is a part of the demand generation process. However, although it’s a part of demand generation, they are not necessarily the same thing. 

On its own, lead generation leverages the awareness generated by successful demand generation strategies and helps to transform them into real ‘leads’ or those who are interested in your product. 

These leads are then nurtured and aided in the process of moving through the sales funnel.
It’s easier to think of it in terms of a road trip. If demand generation is the trip, then lead generation is the vehicle.

Together, demand generation and lead generation help get customers from point A to point B, from awareness to interest.

There are many strategies that can be employed for lead generation. These strategies often include creating “gated content” for those who are aware of your business.

Gated content serves the primary purpose of getting contact information from interested parties.

For readers, the price of content can be as simple as an email address. However, for marketers, that email address is invaluable as it presents a direct line of communication with a potential lead.

Demand generation vs. Lead generation

It’s obvious to see why demand generation and lead generation are often confused for one another. They both utilize similar methods such as content creation, and both rely on brand awareness.

So, should you prioritize demand generation or lead generation?

Well, if your goal is to maximize the effectiveness of your marketing strategy, then you’ll need to master both demand and lead generation.

Demand generation makes people aware of your business’s products and services.

It essentially plants a seed in their head, they may not do anything with the information at first, but eventually, they may use it.

Demand generation is broad, though people may know about your brand, there’s no guarantee that they will actually pay for your services or product. 

That’s where lead generation comes in. 

Lead generation takes those who are already aware of your brand and transforms the awareness to interest. From awareness and interest, customers move through the processes of consideration, decision, and purchase.

In short, demand generation and lead generation are the fundamental starting steps to making a sale.

How do demand generation and lead generation work together?

Lead generation depends on successful demand generation. Though subtle, the difference between awareness and interest is significant. 

Demand generation creates awareness, and lead generation creates interest. The result is qualified leads that have a greater chance of making a purchase. 

Here’s what that looks like in action:

  1. Demand generation: A business puts out an SEO-friendly informative blog post related to their business that begins to rank on the first page of Google’s search results page. Readers gain valuable information on the subject.
  2. Lead generation: At the end of the blog post, readers reach a CTA offering a free e-book on the topic they just read about with more insights. Readers click on this offer and are asked to submit their email address where the e-book will be sent. The reader then becomes a prospective lead.
  3. Lead nurturing: The lead is nurtured via emails related to the business. These emails include information about the brand’s service or product. One of these emails catches the attention of the lead, and they click on the offer.
  4. Completing the sale: The customer makes a purchase!

Though there are many more factors to consider in this idealized portrait of successful marketing, it’s clear that the two most important aspects of this marketing strategy are demand generation and lead generation. 

Key takeaways

Marketing is never straightforward. In fact, it’s quite chaotic! 

Demand generation and lead generation are two extremely valuable features of any successful marketing strategy.

The goal of demand generation is to generate awareness, and the goal of lead generation is to take that awareness and transform it into interest.

With both of these strategies in place, businesses have a chance to turn leads into paying customers.

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