Generating demand for a product or service is different from generating leads. Converting leads? Now that’s an entirely different challenge. All three pieces of the puzzle must be in place to build a steady revenue stream. Here’s a quick look at the differences between lead generation vs demand generation.
Demand Generation
Though demand generation is often used in place of lead generation, the two are quite different. Demand generation is the process in which a sales professional or a marketer generates the need or desire for a specific service or product. The need or desire constitutes demand.
The manner in which the company’s value offering is communicated through advertisements plays a significant role in shaping ensuing demand (or lack thereof). The best demand generation marketers accumulate a substantial amount of data, sort through that data for refinement purposes and conduct additional analysis.
Instead of attempting to create leads, demand generation centers on generating opportunities for customer connections that translate to revenue. Demand generation essentially boils down to the process of generating demand for a business’s value offering through the creation of intriguing and sometimes interactive content.
As an example, elite demand generation professionals are skilled at artfully communicating how their product or service helps people overcome specific problems.
Lead Generation
Lead generation is often mystified simply because it has inherent challenges, is difficult and requires skill as well as expertise to execute. Though lead generation is only a minor component of the overarching demand generation effort, it is vitally important to generate consistent sales and loyalty. The best lead generation marketers gather as much information about the target audience as possible, whittle down that information to what is most important and identify prospects for sales leads.
The lead generation process centers on piquing the interest of potential customers to move them through the sales funnel for eventual conversion. However, generating leads is inherently complex, requiring that sales professionals and marketers zero in on the target personas most likely to need or desire the business’s value offering.
Lead generation is successful when it trims the metaphorical fat of the audience, focusing on those who are inclined to fork over their hard-earned money for the product or service. Lead generation strategies are unique in that they differ by target audience, business and nuanced marketing aims. Such strategies include but are not limited to:
- Providing target audience members with no-cost eBooks.
- Informative blog content.
- Free whitepapers for customer education purposes.
- Additional inbound content offers.
From providing interested parties with the opportunity to enter their email address into mailing lists to free educational webinars and paid social media targeting, the number of lead generation strategies is seemingly endless. Some businesses even go as far as employing retargeting advertising to touch base with those who demonstrated an interest in the product or service by visiting one of the company’s webpages.
Lead magnets are especially important in lead generation. Lead magnets are initiatives or products that marketers dangle before target customers. The objective of the lead magnet is to collect information about the customer. In particular, it helps to obtain the target’s email address to share additional information in the future.
Lead Generation Complements Demand Generation
The two forms of generation work symbiotically. Lead generation is merely a portion of the larger demand generation picture yet the two are essential for business marketing success. Though some businesses have attempted to create demand without generating leads, such efforts typically fail as lead nurturing is central to economically efficient marketing efforts.
If you are like most business owners, managers and advertisers, your thoughts have undoubtedly shifted to whether it is in your interest to prioritize lead generation or demand generation. The answer to this question hinges on the nuanced goals of your business.
If your aim is to heighten marketing strategy effectiveness, both lead generation and demand generation will prove important. Demand generation is fundamental to business marketing success as it heightens awareness of the value offering, planting a metaphorical seed that sprouts in due time. Most business owners find it prudent to fund demand generation efforts prior to shifting the focus to lead generation.
Lead generation convinces those who have been made aware of the brand’s existence to become even more interested in the product or service and eventually convert into paying customers. Awareness leads to additional consideration and purchase. Both demand and lead generation are essential to reach the target end point of conversion.
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