Demand Generation vs Lead Generation

In today's marketing landscape, "Demand Generation" has taken center stage. Influential figures like Chris Walker and companies like Cognism have harnessed its power for substantial marketing gains.

But what does Demand Generation actually mean, and what about Lead Generation?

What’s the difference between Demand Generation and Lead Generation?

Can the two marketing strategies co-exist, and how do you do this as a marketer? Who can benefit from Demand Generation, and who should keep the focus on the oh-so-known Lead Generation.

Let’s dive in.

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What is demand generation?

Chris Walker defines it clean and simple: A buyer-centric strategy to create awareness and educate a market so more people come to your Sales team to buy.

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The result of Demand Generation; lead volume is lower but quality is super high, with significantly better win rates and shorter sales cycles than cold outbound.

In essence, Demand Generation is about educating your audience, generating awareness and a genuine interest in your company.

The people you reach might not be ready to buy yet, but once they do, you will become their choice of preference. It’s about creating trust, and making sure that when they are looking for a partner, you pop-up in their heads first.

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So what’s lead generation again?

Demand Generation is about generating awareness and trust.

Lead Generation is about capturing those who are ready to buy.

Your audience knows your company, but at a certain point, they want to know how and where they can actually buy your product or service. That’s where Lead Generation comes in.

Lead Generation is about capturing those who are ready to buy, turning them from a prospect to a hot lead for your sales team.

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So, should you focus on Demand Generation or Lead Generation?

Long story short, both.

Taking into account a classic marketing funnel, demand generation will take place at the top of the funnel. You are creating awareness for your company, your brand, your products and services.

Lead Generation is towards the bottom of your funnel. Your target audience has become aware of a problem and they are looking for a solution. That’s when you want your prospect to become a hot lead.

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With Demand Generation it becomes easier to turn your prospect into a lead (and also a customer, yes). They already know you are capable of providing the solution, they have heard good things about and see you as an expert in the field. Of course, you will be one of the first they talk to.

80% to 90% of B2B-buyers have a specific vendor in mind, even before they start their research in the market (depending on the product or service they are looking for).

Even better, 90% of B2B-buyers will go for a vendor who was on their day-one list.

So being on that list, becomes extremely important these days. If you are on that list, which will take time and effort, will eventually make your sales cycle shorter and easier. Your closing rates will increase and your sales-team will have more time on their hands.

All because you decided to invest in Demand Generation, in combination with Lead Generation.

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Why you should start with Demand Generation

Most companies want to grow. But most companies rely on short-term lead generation campaigns to achieve it.

They prioritize top-of-the-funnel lead generation, effectively searching for individuals unfamiliar with their brand to schedule an appointment for a conversation, demo or content download. They often overlook the crucial step of demand generation.

Result? For each campaign they launch, they see a peak in the amount of the leads, and a temporary increase in sales, but they don’t see significant, sustainable growth over time.

Why is that? They keep fishing in the same pond. These companies keep going after the low hanging-fruit they have been going after for years. The ones that convert, are the ones who know and trust you. But if you don’t invest in generating trust, then nobody will know you and sales will decline again after your lead generation campaign.

Essentially, you are picking apples from a tree that doesn’t get water to grow new apples.

That's why we call lead generation in this context demand capture.

For us, sustainable growth is equal to Demand Generation added to Demand Capturing.

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With demand generation, in combination with lead generation, you put your focus on the top of the funnel. The ones you put in on top, will dribble down to the bottom all the way to your customer base.

Don’t expect to get anything out, if you don’t put anything in.