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

In the B2B marketing community, there’s a fair bit of confusion surrounding the terms “Lead Generation” and “Demand Generation”.  On one hand, a large part of the industry uses the two terms essentially interchangeably.  On the other hand, another portion of the industry contends that demand generation and lead generation are two entirely different entities.

So, which of these views is right one?  Neither.

Lead generation and demand generation are not entirely different.  They’re also not the same thing – at least not always.  There are certainly campaigns that serve both demand generation and lead generation outcomes.  Likewise, there are campaigns that serve one but not the other.  It’s clear that there’s at least some overlap between demand generation and lead generation, but the extent isn’t necessarily as clear.  To understand the relationship between demand generation and lead generation, you need to understand the two independently.

 

Demand Generation:

Demand generation is the process of generating, well, demand.  Demand generation is concerned with creating awareness and interest among a specified group of individuals.  The overall goal of demand gen is to educate the audience about the related product/service or category of products/services.  The direct outcomes are brand awareness and brand positioning, while, in the long-term, demand generation hopes to elicit further investigation (which eventually leads to the purchase).  HiP uses the following definition for demand generation:

Demand Generation – The stimulation of awareness and interest in a company’s offerings through the use of targeted marketing programs.

In terms of look and feel, demand generation campaigns tend to reach larger audiences and trend toward content that has broad appeal (infographics, videos, blog posts, etc.). Demand generation assets may or may not be gated behind a short form.  Demand generation can involve inbound channels, like SEO, social media, and blogging, or outbound channels, like email, display advertising, and promoted social media posts.

 

Lead Generation

Lead generation is a bit more specific than demand generation.  Where demand can be abstract and hard to measure, leads are concrete.  Lead generation seeks to collect business card information from individuals who both fit a company’s buyer profile and have demonstrated some degree of purchase intent.  Lead generation has tangible direct outcomes in the form of contact records, whether on a list or in a database.  These records are collected with the intent for subsequent communications, usually phone calls or emails.  They may be entered into more complex drip marketing or lead nurture campaigns.  Either way, once captured, these leads are put on a defined track toward conversion. HiP defines lead generation in the following terms:

Lead Generation – The collection of contact information from those with some degree of purchase intent related to a company’s offering, often offered in exchange for content.

In addition to more specific goals, lead generation takes a more specific format compared to demand generation.  In most cases, lead generation campaigns are content based, that is, they offer access to content in exchange for contact information.  As such, lead generation content is always gated with forms of varying length.  To justify this exchange, the content used for lead generation has to be substantial – something like an ebook or white paper, rather than an infographic or an individual blog post.  Like demand generation, lead generation comes in both inbound and outbound varieties.  The most common forms of inbound lead generation include content downloads, blog subscriptions, and trials, while the most common outbound lead generation techniques are email and phone calls.

 

Putting it Together

Lead generation is a more specific subset of demand generation. All lead generation campaigns will serve demand generation outcomes to some degree, while all demand generation campaigns will not necessarily generate leads – at least not directly.  For example, an email-based white paper promotion is a pretty typical example of outbound lead generation.  As is the case with most white papers, the asset discusses the company’s product, its use cases, and/or the outcomes of working with the product.  Between the white paper and the email used to deliver it, this campaign will promote some awareness and interest in the product (in addition to generating leads).  In doing so, the campaign will serve both lead generation and demand generation outcomes.

Demand Generation vs Lead Generation GraphicThe important thing to remember is that, though a campaign can produce lead generation and demand generation outcomes, it can’t focus on both.  A campaign – and its goals – should be catered to either demand generation or lead generation.

The reason behind this is pretty simple.  Maximizing demand generation outcomes and maximized lead generation outcomes often pull a campaign in opposite directions.  The kind of campaigns that generate the most demand will reach the largest possible audience through ungated, broadly-appealing content.  Conversely, campaigns optimized for lead generation will make use of more substantial, niche assets, placed behind a short form.

Choosing between lead generation and demand generation efforts is a matter of organizational needs.  Organizations that have new offerings, complex offerings, or low visibility within the industry should look at demand generation as a source of awareness, education, and positioning.  Companies with established products and a strong grasp of their target audience can use lead generation to fill their sales pipeline and put contacts on the path toward sales.

Regardless of your current focus, lead generation and demand generation outcomes are synergistic.  Demand generation campaigns help to set the stage for lead generation by informing your audience of your offering and its value.   On the flip side, lead generation and management can help to uncover key product features, questions, and confusion, which can subsequently be addressed through demand generation.  Accordingly, the most effective marketing efforts will use an appropriate combination of demand generation and lead generation focused campaigns.

 

 

 


 

Let us know what you think:

  • How do you define demand generation?
  • How do you define lead generation?
  • Do you focus on generating leads, demand, or a combination of the two?

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Comments (4)

These generation “cousins” (or are they more siblings?) go hand in hand and must be a consideration when you are creating content and doling in out in different mediums. Take this article. Which one would it lean more towards being? Demand gen, since it would be more informational than prescriptive? But if you made this into an infographic, then just being more visual, would it make the content more lead gen? Love to get your thoughts on this…

Great article Matt!

Thanks for reading, Michael. I totally agree that demand gen and lead gen should be in consideration during content development. Like you said, even something like this article is capable of being repurposed for both demand gen and lead gen outcomes. For example, the post itself is definitely serving demand gen (ungated, broad exposure, informational, easy to consume, etc.), but the blog as a whole serves lead generation through subscriptions. Not to mention, when you factor in repurposing, there are tons of additional possibilities to serve both demand gen and lead gen.

Hi Matt,
Thank you for this simple distinction of the terms “Lead Generation” and “Demand Generation.” For example, we create marketing assets from the content produced through webinars and sessions from conferences. Sometimes our clients will post the content on their website or send to attendees post-event. Other times clients will gate the content behind registration pages. The first would be to build general knowledge/brand => Demand Gen; the latter would be to capture individual contact info for sales follow-up => Lead Gen. Have I got that right?

Hi Maureen,

You’ve got it right. Putting content on a website or sharing it with attendees are good examples of demand gen, while content gated behind registration pages exemplifies lead gen.

Thanks for your question!

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