Demand generation vs lead generation: what’s the difference?

Digital Marketing | Lead Generation

One of my kids asked me yesterday, “Mum if I’m trying to say something nice to someone, is it spelt compliment or complement?” Do you know, I had to stop and think for a second before I answered…and I write for a living! 

In the realm of digital marketing, two terms frequently bandied about are “demand generation” and “lead generation.” These are related, but distinct concepts in marketing. 

Just like words with only one-letter differences, understanding the difference between demand generation and lead generation is crucial for crafting an effective marketing strategy that drives sustainable growth and fosters long-term success. 

After all, if we don’t know what we are trying to achieve, how can we possibly succeed? 

So if you have ever asked yourself the questions: “What is lead generation in digital marketing” or “What is demand generation in digital marketing”, then read on because this blog is for you. 

What is lead generation in digital marketing?

The focus of lead generation campaigns is the capture and nurture of potential customers (or leads) who have already expressed an interest in your brand’s product or service. 

These strategies are geared towards encouraging leads to take action, such as filling out a form or making an enquiry.

As such, lead gen sits at the end of the customer journey. It is focused on getting the prospect to take action. 

What is demand generation in marketing?

Demand generation, on the other hand, is a broader strategy focused on creating awareness and generating interest in a product or service among a target audience. 

Unlike lead generation – which targets prospects who are aware of your brand or are actively searching for a solution – demand generation aims to stimulate interest and desire in a product or service among those who may not be actively seeking it. 

Demand gen is positioned at the start of a customer’s journey – at the stage where prospects are becoming aware of their problem and begin looking for a solution. 

Where are demand gen and lead gen positioned along a customer’s journey?

As demand gen is designed to educate, inform and build awareness of a brand amongst a target audience, it is positioned at the start of a customer’s journey.

We call this stage the Awareness phase, and it is when the customer becomes aware of their problem and begins looking for a solution. They might start using search engines to ask questions or visit forums for advice. 

Lead generation is all about getting contact information or a warm lead, so it is positioned at the end of the customer journey, at the stage we call “Action”.

Here, prospects might download a guide (in return for an email address) that they’ve seen advertised in their social media news feed, or make an enquiry on a business’s website. 

You can see where demand generation and lead generation sit when mapped against a standard customer journey in the diagram below.

There’s a grey area in between – the evaluation phases of “interest” and “desire”. Types of content which would sit within this phase (such as case studies) can be used to generate leads directly when done well, but can also be used to generate awareness. 

As the best marketing strategies utilise both demand gen and lead gen strategies, it is best to not draw hard lines, and instead view the two strategies as complementary and at their best, seamlessly blending into one another. 

What marketing strategies can you use for demand gen and lead gen?

The tactics that are used for both lead generation and demand generation are generally the same. They include:

• content marketing,
• email marketing, 
• Search Engine Optimisation (SEO), 
• Pay-Per-Click (PPC),

What tends to change is the messaging within the content. The easiest way to explain this is by giving some examples.  

	Commercial cleaning company
Marketing tactic	Demand gen example	Lead gen example
Content marketing	Information blogs based on search queries prospects use when they become aware of their problem, such as “how to get coffee stains out of a carpet”	Information blogs based on search queries prospects use when they become aware of their problem, such as “How to get coffee stains out of a carpet”
Email marketing	Advertise weekly blogs on how outsourcing your cleaning is good for business.	Cold emails advertising a special offer on carpet cleaning.
Search engine optimisation	Informational blog posts based on Top of the Funnel search queries that generate traffic.	Sales pages that are optimised around search terms prospects use when they know the solution they need, such as “cleaning company birmingham”
PPC	Brand awareness campaigns to target locations such as “Introducing our cleaning company”	Google Ads for keywords such as “cleaning company birmingham”

Ok, so there’s a difference between demand generation vs. lead generation…but does it really matter?

In a word, yes. 

1. Get leads who are more likely to convert

In years gone by, the general approach to advertising was to focus on lead gen and simply get as many leads as possible. There was rarely any thought about qualifying those leads and weeding out the “tire-kickers”. 

There is a logic to this – put more into the top of the funnel, and you’ll get more out. 

But, this can lead to lots of wasted time. The sales team end up wasting time talking to leads who are not really the target audience. Done at scale, this is wasteful. 

Today, the emphasis has switched from lead gen to demand gen. 

Demand gen helps you qualify the leads that you get. Meaning your sales team doesn’t waste time, and only speaks to those leads that are likely to convert. 

2. Long-term impact

A lot of lead-generation campaigns often involve paid advertising. After all, how can you constantly get in front of new leads unless you pay for the privilege?

Now if you are a big business with money to burn and a marketing budget the size of a small country’s GDP this isn’t a problem. You just pay to get to the top of Google. 

But if you are a small to medium enterprise, this is problematic. You will always be outbid by bigger competitors.  

A demand generation marketing strategy, although potentially taking longer to implement, tends to be cheaper and if well executed brings in leads long-term once the money stops.

3. More cost-effective

The consequence of weeding out poor leads before they make contact, and opting for a strategy that doesn’t require you to sell a kidney is a more cost-effective marketing strategy that brings in leads long after you’ve implemented it. 

When to use demand gen and lead gen.

The decision between using lead generation (lead gen) and demand generation (demand gen) strategies depends on a range of factors, from your business objectives at any given time to the buying process of your target audience. 

Here are just a few examples:

When to use demand generation strategies

• When you’re launching a new product or entering a new market and need to build brand awareness.
• In B2C environments or when selling lower-cost products that require less consideration.
• When your goal is to educate the market about a problem and your solution, without necessarily capturing detailed lead information.
• To create a foundation of interest and awareness that can fuel your lead gen efforts.

When to use lead generation strategies

• When you have a clear understanding of your target audience and you’re looking to directly engage with them.
• In B2B environments where sales cycles are longer, and purchases require more consideration.
• When you’re aiming to build a database of potential customers for personalized communication.
• For high-value products or services where individual follow-up and tailored solutions are necessary.

Combining both strategies

Most successful marketing strategies involve a combination of both demand gen and lead gen. 

• Demand Gen First: Start with demand gen to build awareness and interest in your product or service. Use content marketing, social media, and advertising to educate your target market and create a desire for your offerings.
• Lead Gen Follow-Up: Once you’ve built up interest and educated your audience, implement lead gen strategies to capture information from interested prospects. Use targeted offers, webinars, and downloadable resources to gather leads for further nurturing.

The KnowShowGrow framework: Empowering sustainable growth

If you’ve got a budget (and let’s face it, who hasn’t) your marketing strategy needs to be built in such a way that you’re seeking out leads, but also nurturing demand. 

Our KnowShowGrow framework offers a holistic marketing approach that integrates these strategies seamlessly, empowering businesses to attract and convert leads effectively.

It combines the aims of both a demand generation and lead generation strategy to ensure you generate leads long-term. 

1. Know your target audience 

The first aspect of our framework. 

To effectively sell your service, you need to understand your target audience’s needs and pain points. You also need to know who you, as a business, are; and what sets you apart from the competition. 

Once you know the pain points that your target audience experiences, you can create content that will answer any questions that they may have. 

This content can form part of your demand gen campaign or your lead gen campaign. You can either give away free content on your website in the form of blogs or promote more valuable content using PPC campaigns targeted to your target audience. 

The possibilities are endless!

But, as the content is based on a solid understanding of your target audience, it is more likely to resonate and generate results. 

2. Show how great you are 

Once you’ve gained a deep understanding of your target audience, the next step is to showcase your product or service in a compelling and engaging way using all your digital touchpoints (e.g. your website). 

This involves creating a visually pleasing website that is structured in such a way that it encourages your users to move along their customer journey and make an enquiry.  

The content on your website needs to: 

• Explain the benefits of your product or service, 
• Explain how it will solve the consumer’s problem, 
• Eliminate doubts and risks,
• Compel them to take action. 

In short, the website should be where the demand gen and lead gen aspects of your campaign work seamlessly together. In a perfect world, users should move from Awareness, through Interest and Desire and then take Action. 

3. Grow with SEO 

All of this is underpinned by great SEO. 

SEO helps the content of your demand and lead gen campaigns rank well online (thereby helping prospects find you in the first place). 

Whilst you can conduct PPC lead gen campaigns without SEO, demand generation is very hard to do without a website that is optimised for search engines, as none of your content will be discoverable online.

By embracing the KnowShowGrow framework, your business can create a cohesive marketing strategy that combines the power of demand generation and lead generation to drive sustainable growth and long-term success. 

Whether you’re looking to build brand awareness, generate leads, or nurture prospects through the sales funnel, our comprehensive approach ensures that you’re equipped to meet your marketing objectives effectively and efficiently. 

And the great news is that we have compiled all our know-how on driving more demands and more leads, into a comprehensive guide that you can download for free right now. 

Demand gen vs lead gen: different but complementary

Although demand generation and lead generation are two completely different beasts and are great strategies to employ for your business, their true value only comes when they work together. 

Use demand gen to capture your target audience’s interest and educate them about how your service helps, then employ lead gen tactics to capture their contact information and generate a lead.

By leveraging the strengths of both strategies and integrating them into a cohesive marketing plan, you can engage your audience at every stage of their customer journey, from initial awareness to final purchase decision. Embracing the complementary nature of demand gen and lead gen is key to building a robust pipeline, accelerating sales, and achieving sustainable growth.