Lead Generation vs Demand Generation

Generating leads for your business is an essential ingredient for achieving growth in the digital age. However, it’s critically important to understand how Lead Generation vs Demand Generation programs work to be able to cost-effectively build sustainable demand for your products and services.

While both marketing tactics share similarities, including a common goal of growing the number of people who interact with your brand and ultimately convert into quality customers, there are key differences when considering the best way to utilize Lead Generation and Demand Generation programs. 

In this article, we break down Lead Generation vs Demand Generation, exploring each of these strategies as very distinct but related marketing techniques. We outline the benefits of each and share examples so that your business can begin immediately implementing these powerful tools to build brand stickiness and drive revenue at scale.

Defining Lead Generation and Demand Generation

Let’s start by defining what each of these means. 

What is Lead Generation?

To many growing businesses, Lead Generation means buying an email list or engaging a company, a person, or a software tool that promises to target a group of potential prospects and attempt to engage them immediately in the sales process. The goal of Lead Generation is to convert and close. 

Examples of Lead Generation activities include meeting setters, pay-per-click advertising, automated 1:1 email campaigns, and other forms of cold outreach. The revenue impact of Lead Generation can be very hit-or-miss, depending on whether a targeted prospect is truly ready to buy at the time of the outreach. But Lead Generation strategies can work well when companies already have marketplace name recognition and an engaged audience.

What is Demand Generation? 

Demand Generation is an ongoing process of consistently engaging with your target audience so that when they need your product or service, they think of you and your company. The goal of Demand Generation is to engage with and educate your target audience. Demand Generation strategies help your company build name recognition and grow and maintain an engaged audience of potential customers over the long term.

By using a Demand Generation program, businesses build an ecosystem of value-driven touchpoints through content-focused marketing initiatives delivered consistently over time. Examples include informative newsletters, blogs, educational webinars and networking events. These initiatives increase reputational value and incentivize target audiences to interact with the brand now and in the future, without pressuring them to immediately convert to a sale. 

Watch our webinar: How to Scale Revenue With Demand Generation

Primary Differences of Lead Generation vs Demand Generation 

When deciding whether to implement Lead Generation vs Demand Generation programs, it’s very important to understand the way these strategies differ when building demand for products and services throughout the buyer’s journey.  

While the ultimate goal of the business is to generate leads and close deals that drive revenue and sustain the company into the future, Lead Generation and Demand Generation go about this in varying ways. That’s because the primary goal of Demand Generation is to engage and educate, while Lead Generation’s ultimate purpose is to convert and close.

Demand Generation uses campaigns that are specifically intended to create value, such as educational content, so that a person will innately think of your business as a thought leader when they’re looking to solve a challenge that’s within your realm of expertise. 

Lead Generation has a much shorter timeline in the sense that it’s more in the here and now, attempting to generate leads by reaching out directly to the audience, who will then immediately be targeted through conversion sales techniques. 

Lead Generation vs Demand Generation: Which Is Better? 

For Lead Generation to be successful, Demand Generation must come first. This is especially true for smaller companies and brands that lack name recognition in the marketplace. Demand Generation creates awareness, value, reputation and brand stickiness so that Lead Generation meets warmer, more qualified leads that are more likely to buy. When sales strategies include both, companies vastly increase their chance of scaling revenue and achieving success.

Low-quality leads are one of the biggest (and most expensive) clogs in a company’s marketing effort. In fact, data shows that only 56% of B2B organizations verify leads before they’re passed over to sales, creating tension between these two departments. This ineffective approach to lead gathering ends up costing companies time and money.  

Higher quality leads are generated over time by using Demand Generation strategies. By providing value to potential customers during the awareness stage, Demand Generation creates an ecosystem of already engaged and interested potential customers, who can be targeted with conversion incentives further down the funnel. 

FounderScale: A Partner In Quality Demand Generation 

At FounderScale, we help companies build successful Demand Generation programs that increase brand value and authority. From customized sales strategies to SEO-optimized content creation, FounderScale is a comprehensive partner helping marketing teams optimize and scale efforts that maximize engagement and revenue.

Contact us today and schedule a free 30-minute discovery call!

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