Demand generation vs. lead generation: What’s the difference?

Demand generation vs. lead generation: What’s the difference?

August 18, 2022

Demand generation vs. lead generation – these are B2B marketing concepts that are often mistaken to be somewhat contradictory. Yet, few things could be further from the truth. While demand generation and lead generation are different marketing concepts, they are significantly complementary in their use.

For B2B marketers that want to create a sustainable pipeline of workable high-quality leads, there’s the need for a paradigm shift —  from demand generation vs. lead generation to demand generation AND lead generation. And the reason is simple, for lead generation to be effective, it must be preceded by demand generation. Demand generation attracts the prospects and lead generation helps steer them into your marketing funnel.

In this article, we discuss

What is the main difference between demand generation and lead generation?

The key difference between demand generation and lead generation is that demand generation is designed to create awareness about your brand and lead generation helps turn the brand-aware audience into potential customers. It’s the difference between creating demand for your brand or product and turning that interest into actual leads — demand generation vs. lead generation.

Demand happens at the top of the sales funnel when you’re creating awareness to get your audience’s attention and generate interest in your products or services. On the other hand, lead generation focuses on collecting information from interested prospects in order to convert them to customers.

When demand generation and lead generation marketing efforts are used in tandem they are a key driver of pipeline growth.

What is demand generation?

Demand generation refers to all the touchpoints, content, activities, and campaigns designed to create awareness, buzz, and recognition for a brand, its products, or services.

Demand gen is a mix of marketing activities specifically designed to provide your audience with useful information and stimulates their interest in the brand.

Key components of a demand generation strategy

Demand generation feeds into the Attention and Interest parts of the AIDA model (Attention, Interest, Desire, and Action); therefore your demand generation strategy is mostly focused on name recognition and creating buzz around your brand.

  1. Set awareness-focused goals: For an effective demand generation campaign, your goals should focus on increasing visibility for your brand. Specifically, you should consider goals such as brand lift, visibility, traffic, and share of voice.
  2. Build awareness: The marketing space is incredibly competitive and maintaining brand awareness is how you ensure that you have new leads flowing into your funnel. For brand awareness to be effective you need to leave a positive lingering impression of your brand on your audience.
  3. Explore brand-appropriate alternative marketing strategies: The goal is to grab attention, so strategies like influencer marketing, experiential marketing, product placement, guerilla marketing, lifestyle marketing, and branded entertainment can help to enhance brand awareness.
  4. Create informative and useful free content: This includes social media, blogs, webinars, podcasts, videos, ebooks, case studies, infographics, and market reports. These types of content help you build a stronger brand voice and authority in your industry.
  5. Use demand generation tools: Supercharge your tech stack with solutions like Clearbit’s B2B ad targeting tools. A smart tech stack can help you scale your activities, amplify your efforts, expand your reach, and enhance the efficiency, effectiveness, and performance of your demand generation campaigns.

Key demand generation metrics

There are lots of marketing metrics that can track demand generation efforts. Below are some important demand generation metrics to track when you’re focused on creating demand for your product.

  • Website traffic
  • Cost per acquisition (CPA)
  • Customer acquisition cost (CAC) per channel
  • Pipeline growth
  • Social engagement
  • Content performance
  • Brand sentiment

What is lead generation?

Lead generation refers to the activities carried out to build interest and earn trust in your product or service. Lead generation is focused on fostering and capturing prospects early in the buyer journey.

Lead generation marketing campaigns are often designed to collect information from the audience and pass it on to the sales team to close. This information can also be used to build an ideal customer profile (ICP), a framework for identifying similar leads that are likely to purchase.

Key components of a lead generation strategy

Lead generation is focused on the Desire and Action parts of the AIDA (Attention, Interest, Desire, Action) model. So your lead generation strategy is focused on turning someone’s interest in your product into a desire for the solution it provides — and eventually a sale.

  1. Develop a lead capture model: Without a strategic lead capture plan, you’ll find it difficult to move your prospects into a sales funnel. Your lead capture plan will rely heavily on web forms through which you collect data from the visitors on your landing page. You can improve the efficiency of your lead capture model by leveraging solutions that can dynamically shorten the number of fields on the form.
  2. Develop your lead magnets: A lead magnet refers to an offer that a brand provides to its audience in exchange for collecting their email, phone number, or contact information. Your offer — typically a downloadable resource or digital tool — is a gift to your prospects. Lead magnets include product trials, gated content like whitepapers or books, coupons, discounts, or other exclusive deals or time-sensitive deals. Lead magnets give you permission to reach out to potential leads who have shown interest in your brand.
  3. Build landing pages: Landing pages are key to the success of your lead magnets. They function as a destination for ad ctas, keep leads focused and reduce distractions, and provide a clear and incentivized call to action.
  4. Leverage social media: Social media is an important part of lead generation using either or both paid and organic channels. Sites like Twitter, Facebook, and LinkedIn provide you with tools to promote your offerings or thought leadership and include a call-to-action in your posts and ads.
  5. Use marketing automation workflows: Marketing automation workflows help you create systems and processes to expand your reach and to monitor and evaluate the effectiveness and performance of your lead generation campaigns.
  6. Develop a lead scoring system: Lead scoring systems help you prioritize your inbound leads based on the depth and quality of their engagement.
  7. Double-down on remarketing: Remarketing enables you to stay in touch with your site visitors and bring your brand to their attention across other parts of the internet. For instance, targeting customers who have visited your site through social media ads. Remarketing is a great way to recapture the attention of interested prospects, provide them with an irresistible offer, and collect their information to transform them into workable leads.

Key lead generation metrics

Lead generation strategies differ across companies, and as such, the KPIs by which they measure success vary. However, some general lead generation metrics help you evaluate the effectiveness of your lead generation activities.

  • Number of quality leads
  • Conversion rate
  • Total lead value
  • Customer acquisition cost (CAC)
  • Sales closure rate
  • Average lead response time
  • Click-through rate (CTR)
  • The ratio of MQL to SQL

Types of leads

Leads can be grouped into different categories based on the actions they took in their engagement with your brand, where they are in the buyer’s journey, and what stage of the sales cycle they are in.

  • Marketing Qualified Lead (MQL): These are contacts who engage with your marketing materials but are still at the top of the sales funnel and aren’t quite ready to talk with sales. They might still need lead nurturing until they’re ready to buy.
  • Sales Qualified Lead (SQL): These are contacts that have taken actions that indicate their interest to try or buy your product or service. Such actions include signing up for a demo or looking at a pricing page.
  • Product Qualified Lead (PQL): These are contacts that have experience with your product through a free trial or a low-feature version of your products. They are product qualified when they take actions showing their interest to pay for the product. These actions vary for different products/services, but they are often related to usage patterns that align with your current customers.

Clearbit for demand and lead generation

Demand generation and lead generation are both digital marketing strategies used to create a pipeline of qualified leads for a brand. Demand generation and lead generation are complementary in that demand gen creates awareness for the brand while lead gen transforms the brand-aware audience into customers.

Clearbit supports marketing teams in their demand and lead generation activities by providing the insights you need to turn traffic into prospects and turn prospects into paying customers.

  • Clearbit’s precise B2B ad targeting solution is designed to improve the precision of ads targeted at B2B audiences by building audiences based on your ICP firmographic and technographic data like title, employee count, and more.
  • Clearbit also helps deliver tailored email campaigns using hyper-personalization features that improve your open rates, clickthroughs, and conversions.
  • Clearbit’s data-driven prospecting solution helps you curate a list of high-intent prospects. Through our Reveal technology, you can identify anonymous prospects, get alerts when key prospects engage with your site, and retarget prospects with personalized ad campaigns.
💡 To learn more about Clearbit for demand and lead generation check out our webinar with Brian Kotlyar Senior Director, Demand Generation & Growth at Intercom.

Demand generation and lead generation are both vital components of any revenue-driven marketing strategy. Demand generation drives brand awareness while lead generation transforms their interest in your brand into a desire for your products and services. Both demand generation and lead generation strategies help to build a sustainable pipeline of qualified leads.

Learn more about how you can optimize your demand and lead generation marketing efforts with Clearbit for Advertising.

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