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

Mark Huber

Plenty of marketers and salespeople use “demand generation” and “lead generation” interchangeably. 

But they’re not.

The key here is that lead generation is a subset of demand generation. 

There’s a lot to cover, but here’s our tl;dr version: 

  • Demand generation is the process of building an audience across channels. 
  • Lead generation is the process of turning your audience into sales prospects.

If you want to have any long-term success with lead gen you have to get your demand gen strategy in place first. You can’t generate quality leads (via demo requests or social ads) without first generating demand (via content.) 

In this article, you’ll learn the key difference between demand gen and lead gen, how you can make them work together, and which one you should prioritize for your marketing strategy. 

  1. What is demand generation?
  2. What is lead generation? 
  3. Should you prioritize demand gen or lead gen?
  4. How do demand generation and lead generation work together?

What is demand generation? 

Demand generation is the bulk of all B2B marketing. 

It’s bringing attention and building awareness to your brand or product through your content marketing strategy, event marketing, social media marketing, and more. Everything from the top of the funnel down to customer marketing.

Demand generation can be broken down into five phases: 

  1. Create demand (Demand Creation)
  2. Capture demand (Demand Capture)
  3. Revive demand (Revival)
  4. Accelerate demand (Acceleration)
  5. Nurture/expand demand (Expansion)

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

You can use different types of content depending on your target audience. 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 might create thought leadership content from subject matter experts. Or, you may consider paying for ads on Facebook or LinkedIn

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.

What is lead generation? 

Lead generation is part of the demand generation process. 

On its own, lead generation leverages the awareness generated by successful demand generation strategies and helps to capture them into real ‘leads’ or those who are interested in your product by getting them to “raise their hand” on an offer.

These leads are then nurtured and moved through the sales funnel (generally measured by the sales cycle – or time it takes them to move through the funnel from lead to customer).

In marketing, this is moving them through various awareness stages: from problem aware, to solution aware, to product aware.

It’s easier to think of it in terms of farming. If demand degeneration is the sowing & watering of the soil, then lead generation is the harvest.

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

The most common lead generation strategy is still to drive leads from gated content. And while we skip this traditional lead gen strategy at Metadata, gated content serves the primary purpose of getting contact information from interested parties.

For readers, they can get a piece of content in exchange for an email address. And, for marketers, that email address gives you a direct line of communication with a potential lead.

Instead of using gated content, we give everything away for free (ungated) and track demo requests. We definitely get fewer “leads” this way, but the ones we do get convert at a much higher rate.

Learn more about shifting away from leads to pipeline and revenue.

Should you prioritize demand gen or lead gen?

It’s obvious to see why demand generation efforts 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 in your marketing efforts?

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 prospective customers 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 captures the awareness to interest. From awareness and interest, prospects move through the processes of consideration, decision, and purchase.

Consider a few scenarios:

  • If you’re a brand spanking new startup without an audience and awareness, consider focusing most of your marketing energy on demand gen activities. You’ll build trust by creating content instead of going right for the pitch.
  • If you’re seeing a lot of interest in your product, but running into trouble with the marketing team passing MQLs to your sales team, it’s time to pay more attention to lead gen. You can optimize what you have in place to start tying demand gen and lead gen closer together.
  • If you’re currently siloing your demand gen efforts (read: content marketing, social media posts) from your lead gen efforts (read: social ads), look for ways to tie the two together. This isn’t an either/or scenario. 

In short, demand generation and lead generation are the fundamental starting points to making a sale. Just make sure you’re taking your audience’s needs and interests into consideration on both fronts. 

How do demand generation and lead generation work together?

It doesn’t always have to be “demand gen vs lead gen.” 

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 and captures 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 call to action that offers 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. Lead capturing: The lead signs up for a demo from the offer in the email. The lead is routed to the sales team and the sales process starts.
  5. Completing the sale: The customer makes a purchase!

Implementing demand generation and lead generation 

By now, you should have a straightforward understanding of the difference between demand gen and lead gen: the goal of demand generation is to generate awareness, and the goal of lead generation is to take that awareness and capture it into interest.

Acting on it is a different question altogether. 

Anyone who says marketing is straightforward is probably selling something. 

(I mean…we’re selling something, too, but shhhhh…)

Demand generation and lead generation are two valuable features of any successful marketing strategy. With both of these strategies in place, businesses have a chance to turn leads into paying customers. But getting to the point where you’re effortlessly creating demand and then seamlessly generating leads from your audience can be a chaotic fun process. 

Instead of taking Google results as gospel truth, we’ll leave you with one word: experimentation. 

Marketing is never one-size-fits-all, so take the time to understand how your demand gen can feed into your lead gen, and how your lead gen reflects on your demand gen. The content and offers/CTAs you run will depend entirely on your audience, your product, and the initial results you’re seeing. 

Looking for ideas to get started? Check out our six demand generation campaign examples to level up your marketing.

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