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Demand Generation vs. Lead Generation: The Main Difference

The main difference between demand generation and lead generation is that demand gen is focused on increasing your brand awareness while lead gen aims at converting brand-aware prospects into customers.

If you’re trying to decide which one is more valuable for your business—

I’ll stop you right here.

Instead of pitting demand generation vs lead generation, the two should be used together for maximum effect. 

If you try to do one without the other you could miss out on significant rewards. 

Don’t worry, though. We’ll help you figure everything out.

This article explains:

  • The differences between lead gen and demand gen
  • What they have in common 
  • How to put them together for the best B2B marketing results
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What is demand generation vs. lead generation?

Demand generation creates awareness and interest in a company’s products and services. You can also use its techniques to penetrate new audiences. Whereas lead generation is when you turn prospects’ attention into hot leads -those who are ready to become customers. 

Unlike lead gen, demand gen is less transactional. Here’s why—

Demand gen and lead gen activities take place at different stages of the B2B sales funnel. Creating demand is at the very top of the funnel. It’s when you bring prospects into your buying process. For example, when they visit your social media profiles or your homepage.

Lead generation happens once the prospects pass through that stage. They show enough interest in your brand or product to exchange their personal information to learn more. For example, via a landing page.

Demand generation is higher up the sales funnel and encompasses lead generation. So if you don’t generate enough SQL leads, it can mean you have a problem with generating demand.

It’s simple really—

If people don’t know your brand exists or what problems your solution can fix, it is hard to convert a prospect into a lead.

Let’s look at the key differences between lead generation and demand generation:

Main differences between demand generation and lead generation.

1. Goals

  • Demand generation aims to build awareness about your company and the problems your company solves. Even if people who learn about this don’t need your solution at the moment, it is important that they know who can provide the solution when the problem arises. 
  • For lead generation, it’s to transform this demand into leads. As the buyer journey continues, it’s natural that your target audience learns about your product. You can then offer to solve prospects’ issues with your product.

2. Engagement

  • Demand generation builds trust among your audience and your brand authority. The more you position yourself as a thought-leader in your industry, the more people want to engage with your business. 
  • Lead generation helps to differentiate your brand and solutions from those of your competitors. It presents all the benefits of using your product.

3. Impact

  • Demand generation is about educating your target audience. It typically involves creating free resources to answer questions your prospects have. 
  • Lead generation takes it up a level, with content that’s more explicit about nurturing leads and positioning your brand. It uses gated resources that require contact information.

How to bring demand generation and lead generation together?

Modern marketing shifts from generating as many leads as possible, to generating demand. The reason behind this is that buyers spend more and more time evaluating purchases. What’s more, they often make decisions outside easily measured channels, for example in the dark social

Without solid demand generation, lead generation is cost-inefficient and doesn’t provide the value needed for growth. If your sales team tries to convert leads before they are fully aware of your solution, the conversion rates (e.g. via Facebook or LinkedIn ads) will be low. 

That’s why demand generation, unlike demand gen, focuses on constantly providing potential customers with valuable content for free. This ensures capturing existing market demand and on top of that expanding your audience.

💡Why don't you listen to Alice de Courcy, CMO at Cognism, who discusses the changing marketing landscape and the need for creating direct demand?

But it’s essential to have a lead scoring system in place, so you know the right time to start targeting leads with more impactful content. This way, the sales team isn’t chasing leads that are not interested in purchasing.

Creating demand needs different content strategies and different content distribution channels than lead gen. Unlike lead gen, demand gen uses lead sources where there’s low intent to buy, e.g., podcasts or community events. 

Being able to differentiate demand gen vs. lead gen, also improves alignment between marketing and sales teams. It lets the marketing team develop qualified leads that can be handed over to sales. Hence, it’s easier to set and deliver targets for both teams.

In other words—

Imbalanced lead vs. demand generation results in:

  • Unsatisfied customers
  • High customer acquisition cost
  • Misaligned targets for marketing and sales teams 
  • Less productive teams
💡Learn about types of lead generation companies and services available on the market.

Key takeaways

  • Demand generation is about educating people about problems your product can solve, through creating free content, without always commercial intent. The aim is to engage a wide audience and increase your brand awareness.
  • On the other hand, lead generation focuses on highlighting your product's features and differentiating it from competitors. The aim is to engage a specific group of people who are most likely to convert into paying customers.
  • Instead of focusing on lead generation vs demand generation differences, modern marketers should focus on who one can complement another for maximum results.

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