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

Person with a megaphone conducting demand generation and lead generation
Demand generation gets people to consider your brand, and lead generation converts them to prospective customers. [Studio Science]

Learn how to turn buzz into buyers with the right full-funnel strategies.

The way we sell has changed drastically over the past few years, because buyers are better informed than ever before. In fact, our State of Sales research found that 81% of sales reps say buyers research brands on their own before ever connecting with sales. Nothing illustrates that more clearly than the way demand generation and lead generation work in the age of social media and buzz-worthy brands.

If you’re wondering what the differences are — or even what each one of these means — you’re in the right place. We’ll walk through definitions, the key differences, and how to put them into practice.

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Demand generation vs. lead generation: What are they and what’s the difference?

Demand generation is a top-of-funnel marketing strategy that drums up interest in a product or service. In other words, it creates demand. Lead generation is used to identify prospects, pull them in your ecosystem, and start a sales conversation.

Here’s a quick example to illustrate the difference:

Let’s say a popular sneaker company gives its latest shoes to a top-tier athlete. The athlete posts videos wearing them. In a flash, the videos go viral and the athlete’s fans can’t stop talking about their shoes. That’s demand generation.

A retailer sees the chatter and posts an Instagram story letting folks know they have the shoes in stock. Fans get see the shoes in their IG reels and head to the retailer’s website to buy. That’s lead generation.

Now, let’s dig into how each strategy works.

Demand generation:

  • Uses content to build awareness and interest. For example, promoting seasonal offers or new products via social media campaigns to new audiences.
  • Casts a wide net without a specific target
  • Usually works over the long term, using multiple touchpoints to reach potential customers

Lead generation:

  • Attracts potential customers who have shown interest in your product or service
  • Uses educational content to talk about a product in more detail, aligning to relevant pain points and needs in the target market
  • Focuses on products and solutions rather than just brand awareness

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What are the goals of demand generation?

Demand generation creates interest in your brand, product, or service. It can also revive interest in an old offering that’s seen a dip in sales, or bring past customers who have fallen out of touch with your brand back into the fold.

While building awareness and interest are common goals, others include:

  • Expanding your audience: A strong demand generation campaign can attract those who already know your brand (but not new products) and pull in new customers with the same effort.
  • Building brand authority: Demand generation can position your brand as a leader in your industry by spotlighting innovation and features that set you apart from competitors.
  • Driving lead generation: Your demand generation efforts should drive lead generation for your brand by getting customers excited about your offer and inspiring them to purchase.
  • Educating and nurturing: Creating a demand generation campaign teaches customers about your offer. It also gives them the knowledge they need to see it as a solution to their problem.

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What are the goals of lead generation?

Lead generation is about closing sales and increasing revenue for your business. You are converting prospects brought in by demand generation activities. As a salesperson, this means reaching out early in the buyer’s journey to build trust and develop a relationship, then nurturing that relationship until the prospective buyer is ready to close. The ultimate goal? A done deal.

Other goals include:

  • Building up your lead generation database: Every sales organization needs a steady influx of new leads to generate more sales, grow, and scale.
  • Improving trust and loyalty: Build and strengthen customer relationships by getting to know your target audience. Lead-generating campaigns are partly about volume — the number of leads in your pipeline — but these leads should be properly qualified so you can easily connect and build trusting, solution-centered relationships.
  • Gathering customer insights: By looking at how your leads behave and working through the qualification process, you gain a clearer picture of their needs, preferences, and pain points. From there, you can personalize future touches and interactions.
  • Engaging quality leads: When people sign up for a webinar or download a white paper, they provide their contact information. Follow up with these leads afterward to learn more about their experience, recommend other products or services, and increase your chances of converting them into buyers.

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How they work together

Demand generation drives lead generation, and both work together to move prospects through the sales funnel. While the two strategies often work in tandem, there are times when you should prioritize lead generation to achieve certain outcomes and times when demand generation is a better choice. Let’s take a closer look.

When (and how) to focus on demand generation

There are many reasons people don’t pull the trigger and make a purchase: The price is too high, they don’t understand exactly how your offering will help them, or they aren’t sure your product even exists. You can use demand generation campaigns to capture their interest and turn them into leads.

Here are opportunities to use demand generation strategies and how they might play out:

  • You want to connect with your audience: Your audience is evolving, your products are new, or your brand was recently introduced to market, so you need to connect with target buyers.
    Demand generation solution: Use targeted emails and display ads to get your company or product in front of potential prospects. The goal here is to make sure your messaging is clean, compelling, and hits on audience pain points.
  • You need to build credibility: Your audience is waffling or unsure of how your solution ranks compared to competitors.
    Demand generation solution: Give them proof your product is the best one. Customer testimonials, endorsements, awards you’ve won — anything that provides credibility — can hook buyers who are on the fence. As a salesperson, ask your marketing team to help create case studies, for example, to send out to interested customers.
  • You’re not on the right channel(s): You’re unclear which channels and what content to publish to help get your message out.
    Demand generation solution: Look at current customers and see what channels they used to engage with you (e.g. social, website, etc.) and what content they interacted with right before they raised their hands. Use that information to develop your next demand generation campaign.
  • You’re ready to launch a new product: You’re a new brand or are launching a new product, so you need to create demand.
    Demand generation solution: Find the right channel, then position yourself in a way that grabs attention, creates buzz, and builds trust with your intended audience. Start by sharing your benefits rather than selling your product.

Tactics for lead generation

When you’ve built your brand and spun up interest, it’s time to shift to finding qualified leads who want to buy. Use lead generation to build your pipeline and find more seasoned prospects. Here are a few common tactics:

  • Create lead generation assets: Your marketing department started the process by getting prospects interested and capturing their contact information (demand generation). Now, create materials you believe they would want to read or use — like ebooks and reports. Put these on your website, social media accounts, and other channels your target audience frequents. Once they download an asset, follow up via email and schedule calls to learn more about their needs and how you can help address those needs with your product.
  • Cross-promotion: More lead generation means more chances to sell. Partner with a brand that complements yours, and you’ll both benefit by extending your reach and capturing new leads. FYI: Sales should always get the go-ahead from marketing before making any partnership deals.
  • Rewards programs and brand ambassadors: Another way to generate new leads is by offering incentives to your existing customers or recruiting ambassadors to promote your brand. You can offer your customers discounts or freebies when they convince friends and family to sign up for your offer.

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Find the right balance and close more deals

Demand generation and lead generation accomplish different goals, but help you boost brand awareness and generate sales. They work together to inform and pique the interest of potential buyers to move them through your sales funnel. While you can use lead generation strategies on their own, it’s typically better to run a demand generation campaign at the same time; this creates the demand that results in outreach. Create buzz for your offer, attract qualified leads, and nurture them into satisfied, long-term customers.

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