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

There is more than a semantic difference between lead generation vs. demand generation. However, only those with experience in the field of marketing understand what these two terms really mean and why they carry such significant importance in the context of the metaphorical sales pipeline. Here’s the inside scoop on demand generation and lead generation.

Demand Generation

Demand generation constitutes marketing that heightens target customers’ awareness of the value offering, be it a service, product or something else. The aim of demand generation is customer engagement that transitions to entry into the customer relationship management (CRM) database for a transition through the sales funnel. Use demand generation to establish a rapport with the brand, continue to tap into your target market and it won’t be long until your sales increase. 

There is a common misconception that demand generation is completely centered on heightening brand awareness. Brand exposure has the potential to result from demand generation. But, creating meaningful demand that helps your business stay in the black necessitates artful communication. Every business owner, manager and marketer is tasked with communicating how the value offering solves customers’ problems. 

Demand generation is not “gated”, meaning it is available to prospective consumers at no cost. Prospects do not have to pay a penny to access the content in question, creating an invaluable opportunity to establish potentially lucrative inroads with an audience that desires or needs the value offering. 

When done successfully, demand generation highlights the prospects’ pain points and steers them toward the solution. Demand generation ultimately sets the stage for prospect conversion through lead generation as described below.

Lead Generation in Simple Terms

Let’s shift our attention to lead generation. Lead generation is centered on the use of content that is considered “gated” to catalyze leads through the sales funnel. The hope is that tapping into the expansive pool of prospects through lead generation will create an opportunity for targeted marketing and eventual conversion into paying customers. The gated content component of lead generation is a reference to web-based materials such as blog posts, embedded videos and even white papers that necessitate the submission of consumer information prior to the point of access. 

Even if your lead generation effort includes a basic contact form with fields for the prospect’s name and email address, it has the potential to pave a path toward continued engagement and gradual conversion into paying customers. Lead generation is a bit more challenging than demand generation as it is time-consuming. A company’s lead generation efforts are likely to range from inbound marketing retargeting that maximizes the utility of previous efforts to connect with target customers to webinars, online events, electronic books and more. 

Demand Generation and Lead Generation are Complementary

Demand and lead generation are interdependent on one another. Fail to execute one and the other will falter. There is no sense steering online traffic to your website or other components of your online presence if you fail to convert at least some of those leads into paying customers through nurturing. Each of these unique marketing activities occurs at specific segments of the sales funnel yet both are equally important. 

As an example, demand generation occurs at the sales funnel top, creating an opportunity to convert prospects into paying clients. Demand generation that moves online traffic toward your blog, a service page or even social media pages creates an avenue for lead generation. Such prospects will be inclined to transition through the online content, develop an interest in the value offering and eventually convert.

In summary, demand generation is best thought of as an educational process that informs target customers about how the value offering can improve utility, comfort, efficiency or another aspect of life or business. Demand generation casts a wide net to make customers aware of the business’s existence and the merits of the overarching brand. Demand generation can occur across a plethora of online channels ranging from social media to blog posts, video content and even eye-catching infographics featured on a homepage or another part of your company’s online footprint. 

Lead generation is more focused on the nuances of the value offering and how they are distinct from those of the competition. Recognize that demand generation bolsters awareness of the brand while the generation of leads focuses on conversion, combine those pieces together and you’ll escalate your business to new heights. 

You can’t do it all on your own. Tap into the expertise of inbound marketers along with the latest tech innovations and your business will ramp up both demand generation and lead generation, maximizing conversions and ensuing sales.

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