What's the Difference Between Demand Generation and Lead Generation?

B2B SaaS Sales page funnel

In the quest for customer acquisition, “lead generation” and “demand generation” are often used interchangeably, but there are key differences to be aware of.

In this article, we’re taking a look at both of these acquisition models to help clear up the confusion.

Lead generation 

This is a strategy for gathering the contact details of interested potential customers. Using different content and marketing tactics, you encourage these people to voluntarily exchange their email address for something that’s useful and valuable to them.

Common elements

  • Gated assets
  • Lead magnets
  • Webinars
  • Discount codes
  • Content marketing

Once this information exchange has been made, it enables you to market directly to each interested person and nurture them until they’re ready to buy. The more personalized you can make their experience, the more likely they are to move towards a purchase.

61% of marketers say lead generation is their toughest challenge. Even if you think you’ve nailed it, it’s definitely not a once-and-done solution. This is something that needs to be constantly reviewed and optimized as you move forward. Having a robust system in place to collect leads is essential for business growth. Without customers you can’t survive, and you won’t have investors knocking at your door anytime soon!

Good lead generation is the mechanism that drives qualified traffic to your sales reps, or to your self-service sign-up page where the conversion from prospect to customer takes place.

This strategy fits into the larger ecosystem of your demand generation.

Demand generation

This is a strategy put together for the purpose of creating brand awareness and building demand for your product, typically moving potential prospects from the stage of being unaware of your brand to being most aware and ready to become a customer.

Common elements

  • Paid advertisements that turn strangers into qualified traffic
  • Landing pages that turn your traffic into leads
  • Email sequences that turn your leads into warm prospects
  • Sales pages that turn your prospects into customers

Demand generation strategies can be used to grow your reach within an existing market, move into new markets, and make people aware of any new products you might be launching. It’s especially important for startups that need to show up and claim a share in the market as fast as possible.

This strategy covers every touchpoint of a buyer’s journey with your company -- from initial discovery to sign-up, and onwards to long-term retention.

How to create effective lead generation and demand generation strategies

Ditch the guesswork and talk to your customers! As in, pick up the phone. Make an appointment. Send them an email. Survey your list. And repeat -- as often as possible.

If you’re not sure exactly who your target audience is or why they signed up for your product, it’s hard to market back to a lookalike audience, and it will be more difficult to retain people that become your customers over the long term.

Talking with your existing and churned customers helps you identify and qualify potential buyers that you can target with your lead and demand generation for the best chance at conversions.

Once you’ve got the information you need, you can plan your strategy roadmaps and the elements you’ll need to include in each one to attract high quality leads.

If you’re looking for help with your demand generation funnels, send us a message here.