In this day and age, it’s surprising that quite a number of B2B marketing folks still get the terms “lead generation” and “demand generation” mixed up. Although these two activities remain inextricably linked, they’re not the same thing. That’s why if you’re out on the market looking for lead generation or demand generation services, it’s important that you know the differences between them and find out how to choose which one you need.
Demand generation and lead generation share some similar goals, but successful marketers use each of these to achieve different sets of objectives. According to the Content Marketing Institute, demand generation creates interest on your brand or product, while lead generation captures information from interested prospects once demand has been established. The outcome of demand generation services is increased reach and conversions, while that of lead generation is new qualified contacts available for marketing or sales.
In other words, demand generation precedes lead generation. Demand generation hauls prospects into your sales funnel, while lead generation ensures that these prospects actually make it inside. That means if you’re looking for an outsourced marketing partner, you need to be sure you’re getting the right services. Here’s a few questions to help you find out whether you need lead generation or demand generation services:
- What are your present priorities and objectives?
Customer acquisition and brand awareness typically vie for marketers’ time and budget. But achieving either or both these end-goals requires having clear processes in place. What’s more is that these processes vary depending on whether your current strategic situation call for a revenue-oriented or a branding-focused approach (or a combination of both).
If you’re leaning toward customer acquisition, then lead generation activities should probably make up a significant chunk of your marketing efforts. Otherwise, going for demand generation services is most likely your best path forward.
- How much does your target market know about your product or solution?
Keep in mind that demand generation services help you create buzz and awareness about your solution or company. It’s the right tool for the job if your target buyers aren’t very familiar with what you’re offering and you need to let your audience know about its capabilities and benefits.
On the other hand, if your target prospects already have a good idea about your product, then they’re potentially ready to proceed toward the next stages in the sales funnel. That’s where lead generation can really help.
- What prospect qualifications are you looking for?
Here’s one way to think about the differences between lead generation and demand generation services. Demand generation is like casting as wide a net as possible, while lead generation helps keep only the most interested prospects, setting the rest aside. This is why demand generation tactics often use content that’s freely available (such as blog posts), whereas lead generation relies on gated content assets (such as whitepaper downloads).
Lead generation needs a more specific (and oftentimes narrower) set of prospect qualification criteria. BANT, buyer profiles, and lead scores make up prospect qualifications in lead generation. Demand generation, meanwhile, works with a broader set of prospect characteristics.
- What are your target outcomes?
Demand and leads are obviously different things, although you could argue that a lead is what demand looks like once qualified. Unless we’re talking about demand in a microeconomics context, quantifying demand for your product or solution is trickier than measuring lead generation outcomes.
With lead generation, it’s easy to find universally agreed-upon metrics to measure results (e.g., record counts for lead quantity, lead scores for lead quality). For demand generation services, it takes a little creativity to find the right yardsticks to use.
By now, you’ve possibly gotten the impression that lead generation and demand generation go hand in hand. That’s exactly the case. Deciding between lead generation and demand generation services is actually finding the right balance between which initiatives to do in-house and which ones to outsource to a third-party provider. Define what you want to achieve and determine how your current capabilities and resources stack up against your objectives.