Lead Generation, Demand Generation, and Your Sales Funnel
When you dive into sales strategy, you’re going head-first into a pool of slang, lingo, and idioms that eventually start to blend together.
It’s hard to keep your vocab organized when you’ve been floating in the sea of jargon and relentlessly ambushed by “low-hanging fruit,” “building rapport,” “bant,” “BOFU,” and “MQLs” for a while, but there are two terms you should always keep straight: lead generation and demand generation.
Too often, this duo is used interchangeably in sales conversations, but it’s time to clear the air. Come out of the sales phrase haze, take a deep breath, and let’s hammer out how these two ideas are distinct and how they work together when it comes to sales.
Lead Gen Vs. Demand Gen: What's The Difference?
You may be wondering how these ideas can be so different if it's pretty typical to hear them used synonymously. The simplest answer is that humans are fallible and words get mixed up all the time (especially since language is constantly evolving). But aside from our own grammatical imperfection, another reason these words get tossed around so carelessly is because they are intrinsically connected.
You rarely, if ever, see one tactic without the other—and if you do, well, something may be amiss in that sales funnel. After all, both are tools used to achieve the same end goal. They also both rely on similar marketing content, such as ebooks, guides, surveys, events, and more. Despite how often you hear either tossed around in the same sentence to refer to the same idea, though, don’t be fooled.
Demand generation and lead generation are different levers to be pulled at different times in the customer journey. One pulls people into your product while the other helps turn them into a lifelong fan. Read on to learn the subtle differences and when to deploy each strategy in your sales process.
What Is Demand Generation?
Demand generation is all about creating an appetite for your product or service. This sales and marketing initiative lives at the top of the sales funnel (or TOFU on your sales vocab sheet), and its goals include:
- Generating interest in what you’re selling
- Building authority in your industry / against competitors
- Expanding your audience
Demand generation is akin to casting a giant net into a sea of folks who all have a problem that, conveniently, your product solves. Leverage the content at your disposal—blog articles, social media posts, videos—to bring their problem to the forefront and undeniably tie your company to the solution.
Wait, wait, wait. Is demand generation really just the same as brand awareness?
While these two ideas do share a few similarities, brand awareness is an even more top-of-funnel play than demand generation. The goal of brand awareness is to maintain a visible presence between a company and its target consumers, while demand generation’s goal is to create measurable demand for the product. Both brand awareness and demand generations share a goal of pushing people further down the sales funnel through conversion.
Demand generation tactics
Drumming up demand for your product or service is rarely achieved in one shot. In other words, no matter how badly a person needs your offering, there’s a slim chance they’ll hear about your company one time and convert on the spot.
Demand generation is a long-term strategy that needs to strategically place your company in the path of prospective buyers. To create persistent touchpoints with your ideal audience, you’ll first need to build a collection of content you can pull from and distribute. Some of the most common types of demand generation tactics include:
- Blog posts that describe your audience’s pain points and offers up useful insights or solutions. Demand gen posts should be optimized for search engines and should feel more helpful than transactional. Plus, don’t forget the power of guest posting and clever partnerships with other companies that cater to your same audience.
- Videos are highly digestible, shareable, and searchable. YouTube is the second-most popular search engine after Google, and video makes for a great opportunity to put a personality to your brand. Once posted to YouTube, TikTok, or anywhere else, cross-post and distribute your highly appetizing video across channels to engage even more people.
- Podcasts inherently position you as an authority in your industry. Whether it’s a production you’re controlling or you’re hopping as a guest from podcast to podcast, the more your audience can hear from you, the more they’ll trust you when it’s time to tap into your solution.
- Events and trade shows can be massive opportunities to get in front of an engaged audience. And today, there is seemingly an endless variety of in-person shows, digital webinars, and hybrid events that you can speak at, booth at, or sponsor to get in the mix.
When it comes to tackling your demand generation strategy, start with one tactic to focus on and spread from there. The main takeaway is to try and appear in front of your target consumer as often as you can (the Rule of Seven is alive and kickin’ in B2B sales) so that when they finally understand the issue they need a hand with, they’ll come to your company first. Demand generation is an ongoing strategy that you can optimize and finetune over time, but the most important part is simply getting started.
What Is Lead Generation?
When it comes to sales, the term “lead” can be pretty loaded. On a typical day, you may find yourself talking about cold leads, warm leads, hot leads, information-qualified leads, marketing-qualified leads—woof. All of these leads have something in common to you, though: You know how to get in touch with them.
Lead generation is the phase of your funnel that follows demand generation. Through all of your demand efforts (remember all that sweet content you created?), you’ve been able to attract people who want to finally take the next step and have given you some identifying information. Leads are people who may have landed in a database full of folks who are actively in the market for your solution, signed up for your email newsletter, attended your virtual round table, and beyond.
If your company was a brick-and-mortar corner store, leads would be all the passersby who finally come through your doors after seeing your billboards, hearing your radio ads, and reading your tri-fold pamphlet. Then, once they’re in your store, you can crank up the schmooze factor and try to land the sale.
Lead generation relies on a strong demand generation strategy to pave the way. Demand gen primes your audience with information about your company, products, and services before passing the sales baton to lead generation and converting prospects into paying customers.
Lead generation tactics
While content continues to play a massive role in this stage, it’s just a touch different in that it ultimately wants to gather someone’s information, like an email address or phone number. Because of this, lead gen-specific content may look like:
- Blog posts that are fully or partially gated, contain downloadable assets called lead magnets, or have calls-to-action throughout that drive people to schedule a demo or consume more content. This content can also lean bigger, such as extended ebooks or case studies.
- Videos that are only partially available before a lightbox appears and asks for more info such as an email address or company website. Videos are also a tempting perk to entice people to sign up for the weekly newsletter or join your company’s online community.
- Podcasts are a great channel for talking about in-depth content or assets. Starring as a guest on a podcast to talk about your latest case study or piece or research is a great way to drive people to beefy pieces of gated content.
- Events and trade shows are rock-solid ways to collect consumer information. If you’re hosting the event, odds are good that every attendee has willingly handed over their contact info so you can keep the conversation going after the event. And if you’re hosting an event with partners or you’re sponsoring the whole shebang, work it into the agreement that you can take a peek at the attendee list afterwards.
The difference with lead generation content is that it leans more transactional. You’re clearly asking for more information about anyone consuming that content, whether it’s a gated blog post or a downloadable ebook, so that your sales team can keep in touch and continue the conversation toward conversion.
When it comes to lead generation, you do have to make sure you’re not asking for too much information too early or asking for information on content that simply isn’t worth it. Since this is a more transactional phase of your funnel, your leads are going to weigh if it’s worth forking over their deets in exchange for your content.
If you ask for too much information before trust has been established, they will bounce. If you ask for their info in exchange for content or answers they can find in hundreds of other places, they’ll also be running toward the exit.
Keep in mind that asking for someone’s information is inevitably an added piece of friction to their journey. Your goal here is to make this friction seem valuable and seamless so your funnel doesn’t get all clogged up.
How Do Lead Gen and Demand Gen Work Together?
Lead generation is part of the demand generation motion. With persistent touchpoints provided by demand generation, you create the baseline awareness of your company and product necessary to establish authority, trust, and interest.
Lead generation then leverages that groundwork and turns all that interest into real names and contact information that sales teams can use. With a fat stack of information, sales teams can really crank up the impact and get to work. Not only are salespeople armed with info to help make email intros, exclusive offers, and tailored deals, but they can also offer a more personalized journey.
Creating a personal experience in sales fosters trust and connection—two factors that are crucial on the road to conversion yet increasingly hard to come by. Helpful, informative, and engaging content throughout your demand and lead generation strategy builds toward a tighter relationship with every prospect.
Generating Your Best Sales Funnel Yet
The common thread connecting demand gen and lead gen is your content. Sales teams and marketing should work closely together to create impactful and desirable case studies, whitepapers, and blog articles that can be used to gain attention and draw in leads.
When you understand the differences between the broad net of demand gen and the more precise CTA of lead gen, you can cater better to your target consumers and start building your finest sales funnel yet.