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The Difference Between Demand Generation vs. Lead Generation

What is Demand Generation?

Demand generation is the means by which marketers help their prospects identify a problem they are having. In turn, it suggests that a company or individual can help them solve it. For example, someone with a leak under their sink might Google for an answer, and finding the likely problem through a piece of demand-gen focused content (such as a YouTube video, blog, or Infographic) is then introduced to the possible solution (the licensed plumber who posted the content).

Demand generation activities can take place across multiple channels like social media posts, videos, blogs, infographics, PPC ads, or other social media activities. The defining characteristic of demand generation is that the content is free to consume (not gated or paywalled). Demand generation is geared toward building awareness for both the pain point of the reader, and the content provider as a solution.

Examples of Demand Generation Tactics

B2B prospects, just like B2C prospects, tend to get information and socialize on a variety of platforms. Therefore, it’s important that your demand generation efforts not be limited to one or two channels. Building a robust mix of channels ensures that wherever your ideal customer tends to gravitate, you will be seen there (either directly, through publishing content, or indirectly through retargeting, etc.)

SEO-based Content

Building an effective on-page and off-page SEO strategy into your demand generation efforts can improve your search rankings, bringing in more traffic, and creating authority with top-of-funnel prospects just beginning the buyer’s journey. Maintaining first-page rankings in search for your highest-value keywords takes time and effort, but can establish trust before a prospect even visits your website. All content should be built around your central keyword strategy to maintain high search rankings.

Guest Posts

For marketers looking to improve their search rankings while simultaneously building authority, a program of guest posting across social media channels can give you more opportunities to get in front of viable prospects, while also demonstrating your expertise in their area of interest. Building contacts with high-authority sites and posting content to these outlets is effective for link-building to build organic traffic, and can help readers in the awareness stage of the journey begin to know and trust your work more, moving them closer to becoming a lead and later a customer.

Trends Articles with Subject Matter Expert Interviews

For many businesses, trend-spotting and analysis is another important facet of demand generation. Trend-focused pieces operate on a few different fronts. First, they are an excellent means of building authority in an area of expertise. They demonstrate both your knowledge of the industry and foresight into its potential upcoming changes. Second, much like guest posting, this type of content most often operates by sharing knowledge from other industry experts. This widens the net of potential readers organically, as each contributor shares the content with their respective audiences. That reach can similarly drive organic site traffic.

To draw from our previous example, a plumber might feature a trend article about improvements in fixtures or materials used in the trade, bringing in outside experts to comment on specific materials or installation techniques. Those experts will share the finished product, which could in turn attract the attention of local clients seeking an installer.

Offering Free Resources

One of the easiest ways for prospects to understand the quality of your product or service is to allow them to experience a portion of your offering before they commit to buying. These experiences may include free trials or free-to-use features, audits, estimation tools, calculators, or walkthroughs of simple, self-service tasks.

For example, the plumber looking to connect with prospects for installation services might provide a free walkthrough of an easily-accomplished fix (such as remedying a slow-leaking tap or adjusting a water heater temperature). This provides an opportunity for the prospect to benefit from the content provider’s expertise, making them more likely to know, like, and trust that professional when they encounter a problem they can’t solve independently. This type of lead nurturing throughout the funnel is one of the top priorities for marketers in 2020.

Lead scoring

Though not a content-based tactic, lead-scoring is a strategy many companies use to make efficient use of their resources based on intent data demonstrated by prospects. In essence, lead scoring is the process by which marketing “takes the temperature” of a prospect based on what actions they take as a result of your demand generation efforts. For example, if a prospect regularly engages on social media posts or free offers, that may contribute to the lead score.

Once they take action with more intent (for example, signing up for a webinar or downloading a piece of content in return for contact information) this shows marketing that there is sufficient reason to pass the contact along to sales (sometimes called Marketing Qualified Lead or MQL in the pipeline). That hand-off to sales is the start of the lead generation process. By using this process of measuring lead viability, companies enjoy up to a 77% boost in lead generation ROI.

What is Lead Generation?

Lead generation is considered the natural progression of your demand generation efforts, moving a prospect down the funnel toward a potential sale or signup. Where demand generation relies upon engagement with non-gated content offered through social media channels, lead generation then builds on the interest developed during the awareness stage and moves the prospect into the consideration and decision stages.

For instance, a customer reading about bathroom installations and engaging with demand gen media might then progress to the lead generation stage by signing up for a free (gated) downloadable guide on how to estimate a budget based on the work they’d like to have done. This intent data would then trigger the sales team to reach out and further explore the customer’s needs and pain points, with the intention of offering solutions and nurturing the lead down the funnel.

Lead generation tools include more investment than simple demand gen content. These efforts might include live or virtually-hosted events, webinars, ebooks, retargeting efforts, etc.

Examples of Lead Generation Tactics

Lead generation content tends to be more in-depth than demand gen, and more tailored to the needs of the individual customer—content developed specifically with their buyer persona’s pain points in mind.

Ebooks, Reports, and Whitepapers

Depending on the industry, in-depth, downloadable resources such as ebooks, reports, whitepapers, and other thought leadership and educational content can be highly effective in demonstrating knowledge and helping the reader navigate the consideration stage. This gated content typically dives deeper into a subject covered in a more demand-focused piece of content.

For instance, a blog post discussing popular bathroom finishes may lead to an in-depth ebook that explains finishes in detail: their pros and cons, most popular applications, and the price considerations of selecting one quality or type of finish material over another. While the demand gen content gets the prospect thinking about what might work for them, the ebook or report will take them more thoroughly through the decision-making process. This can give them a baseline of understanding for further discussions with the sales team, and may even pre-qualify them before the demo or discovery call by helping them understand the budget or specifics of an install.

Direct Mail Marketing

In a world of digital and phone communication, this form of lead generation that is gaining traction works by making a tangible, valuable connection with a prospect. Based on lead scoring, the lead generation team might use direct mail marketing to forge a stronger relationship. This could take the form of handwritten notes to say thank you for the inquiry, a sweet treat to enjoy during a demo or webinar, or even a personalized gift for a prospect getting close to making a buying decision. Marketers report a 40% response rate when digital and direct marketing are combined.

Webinars

Capitalizing on the power of personal connection, webinars can be an effective way of forging a stronger relationship during the consideration and decision stages of the funnel, and can even continue to nurture customers once they sign on. Webinars can help with specific parts of the prospect’s pain point, leading to more full-scale assistance in the form of a paid resource, freemium feature, or sign up. Webinars are a powerful method of generating leads at volume—as many as 500 or 1000 at a time.

Live events

Several industries—especially those with long sales cycles, complex buying decisions, or high dollar-value—rely on in-person events such as trade shows, conferences, summits, and keynote events. These events allow sales professionals to make human connections with their prospects, answer their questions in a thorough and personal manner, and even get to know their prospects socially through networking events or booth chat. When asked about their primary reasons for attending live events, half of the respondents to one study cited lead generation and community-building as prime motivators.

Note: In the face of COVID-19, most live events are on hiatus, causing challenges for sales professionals whose business model heavily relies upon in-person lead-building. As a result, many companies have pivoted to virtual events and tradeshows. With the right approach and omnichannel campaign strategy, these events bring the benefits and appeal of live events directly to prospects and customers.

Retargeting Campaigns

Retargeting is capitalizing on the attention you’re already getting from a prospect and keeps your brand, product, or resource front and center after they’ve expressed interest in your service by visiting your website. Through retargeting, prospects not yet ready to commit to a product or service can be served automated touch-points and follow-up offers, nurturing them until the time is right for a call, a demo, or a commitment. Customers that are served retargeted ads are reportedly 70% more likely to convert, making this practice valuable and highly effective.

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

While demand generation and lead generation would seem interchangeable, demand generation focuses on brand awareness and product education at the top of the funnel, where lead generation is focused on converting prospects into qualified leads that can be nurtured into becoming customers.

While lead generation depends on your demand generation activities to create and educate the pool of prospects, lead generation is a separate and more focused effort to take that buzz and enthusiasm for your products and services, and turn it into conversion events and revenue. That process relies on good segmentation, data analysis, and alignment between content, sales, and customer teams to create resources and offers that will lead to conversion.

How Do Demand Generation and Lead Generation Work Together?

While both lead generation and demand generation ultimately serve the same goal, they must work well in sequence to provide healthy conversion and keep the pipeline healthy. Without a solid demand-gen strategy, your sales teams won’t have the volume of inbound leads necessary to generate sales numbers.

The diversity of the demand generation is another important factor in the health of your funnel. Prospects browse and work on a number of channels, and each prospect prefers to obtain information in different ways. For this reason, having a strong offering of branded video, social media posts, guest opportunities, speaking engagements, and paid advertising is the most effective way to ensure you’re not leaving valuable prospects on the table.

In addition, strong offers and CTAs in the demand gen stage can make prospects more confident to direct their attention to a company, giving lead generation the best possible chance of getting them to entrust contact information and proceed with the buyer’s journey.

Take Your Demand Generation and Lead Generation to the Next Level

When you understand the difference between demand generation and lead generation, it’s possible to craft programs that complement and support the ultimate goal: driving more attention to your website and your products and services, and converting that attention to high-quality leads and customers that will spur growth and stability in your revenue.

Incorporating direct mail marketing into your lead generation mix can build on the effectiveness of this approach, yield those desired outcomes faster, create longer-lasting relationships with customers, foster evangelism, improve the ROI of your campaigns, and increase the lifetime value of your customers.

If your demand and lead generation programs could benefit from the added power of direct mail marketing, reach out to set up a demo of the Sendoso Sending Platform.

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Peter Tarrant, Account Based Marketer, Tipalti

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