Demand Generation Vs. Lead Generation – Which One Do You Need?

Demand generation and lead generation are both integral parts of a successful B2B marketing strategy. To generate sales leads effectively, your marketing strategy must generate demand. And an important measurement of demand generation success is how the demand translates into leads generated and ultimately, sales. The two work hand in hand. Demand generation and lead generation are often confused as one and the same, interchangeable terms and strategies – which couldn’t be further from the truth. Lead generation is a specific (and very important) piece of the demand generation process. Demand generation and lead generation should be viewed as sisters, not twins, and there are a specific set of skills and tactics involved with each. Let’s discuss the difference between demand generation and lead generation, and how you can use both to gain marketing and sales success.

What is demand generation?

Demand generation is vital to the lifeblood of your organization’s growth. It is the place where all of the players in the marketing department come together – Communications, branding, operations. It is also the place where tools like Pardot and Salesforce shine.

Demand generation is a strategy developed by both marketing and sales that aligns to buyers at every stage of their purchase path using buyer-centric content and channels.

A complete demand gen strategy goes beyond brand awareness and includes a process to reach buyers through content, design, data strategies, and inbound lead generation.

What is lead generation?

You’ve likely heard of (and executed) lead generation. In fact, 53% of marketers are spending at least half of their budget on lead gen.

Lead generation is the marketing-led process of driving potential customer interest in a product/service, then collecting sales lead data (like name, email, phone number…) to support sales efforts.

Successful lead generation programs are built through a partnership between sales and marketing to drive more quality sales leads over time.

Demand Generation or Lead Generation – Just get started!

As you can see, demand generation and lead generation are not an either/or. Marketing strategies that successfully drive sales and revenue include a full-scale demand generation effort with an element of lead generation. Is your organization currently running a demand generation strategy? Whether you’ve already started or not, it’s always a good time to assess your demand generation strategy. Here’s how to get started:

  • Strategy – Did you start with a plan? The first step is always to make a plan. The reality is you must have a defined and documented marketing strategy before you can envision any other demand generation steps.
  • Measurement – Do you have current reporting to make data-based marketing decisions? Every organization needs current reporting to know what a demand generation strategy should look like. Start with the “easy” metrics. For example, if you are running social media ads, start with the number of impressions and clicks. Of course, there are plenty more metrics to decide upon. Being able to analyze something will lead you to more questions (like “What does this mean? Where did they go when they clicked? Did they buy?…”)
  • Organization Adoption – What are you doing to encourage adoption? As demand generation touches so many areas of an organization, adoption across functions is critical for success. According to a study by MIT Sloan Management Review and Capgemini Consulting, 63% of executives and managers said the pace of change in their workplaces is too slow, primarily due to a “lack of urgency” and poor communication about the strategic benefits of new marketing automation tools. As a marketing leader, it’s your responsibility to plan demand gen next steps and communicate why it matters to encourage adoption.
  • Budget and Technology – How are you asking for money? Trick question – don’t ask for money! Show your plan for how increasing marketing spend will in turn improve brand awareness, lead generation, and revenue. Then show the results. When you hit the limits of the solution, ask for more – it’ll be easy once you’re measuring successful results.
  • Sales and Marketing Integration – Are sales and marketing working together? Sales and marketing should be more than in-tune – they should function as one cohesive group, especially when it comes to demand generation strategy. When everyone has one set of goals, they work together to the same end. Ask your sales team what they need, what a good prospect looks like, what else marketing can be doing to support them. The questions will give marketing teams valuable insight and solidify a partnership with sales.

Want some help getting started? First, check out our white paper – A Guide to Building a Successful Demand Generation Framework – for more information. And reach out if you have questions. At Invado, we provide lead generation services to help clients develop and implement metrics-based demand generation marketing strategies that grow sales pipelines and increase revenue, and we’d love to help you!


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