Demand Generation vs Lead Generation: How & Why to Use Both

It's easy to confuse demand generation and lead generation. Although some sales and marketing teams use the two terms interchangeably, they don't mean the same thing.

The biggest difference between lead generation and demand generation is that demand gen increases awareness and interest in out-of-market prospects, while lead gen focuses on nurturing in-market leads.

But this explanation only scratches the surface. In this article, we'll take an in-depth look at demand generation vs lead generation and explore how to use both approaches in your sales and marketing efforts.

What is demand generation?

Demand generation is the process of improving brand awareness and driving interest in your product or service. It's all about getting the attention of your target audience and staying top of mind when they need the solutions your business offers.

This strategy targets prospects who fit your ideal customer profile (ICP) but who aren't yet in-market. According to the 95-5 rule, around 95% of your target market isn't ready to buy at any given moment.

As a result, demand generation tends to be critical for creating positive first impressions and getting your brand in front of prospects regularly over time. In other words, it's a long-term strategy.

What is lead generation?

Lead generation is the process of connecting with engaged prospects and guiding them through your sales cycle. It's all about leveraging the awareness and interest you created via demand generation marketing and working toward a conversion.

This strategy targets in-market prospects. Unlike demand gen, lead gen focuses on the 5% of your target audience that's actively seeking a solution and that's likely to buy in the near future.

As a result, lead generation is important for nurturing leads and prompting them to convert into customers. Although it doesn't produce immediate results, lead generation is more of a short-term strategy.

Demand generation vs lead generation: What's the difference?

Now that you have a basic idea of what lead generation and demand generation mean, let's take a deeper dive and compare the two strategies side by side.

The different goals of lead generation and demand generation

Demand gen targets these top-of-funnel objectives:

• Increase brand awareness within your target market
• Generate demand for and interest in your product or service
• Educate and engage prospects about your brand and its solutions
• Keep your brand top-of-mind among your target audience
• Introduce new prospects into your sales funnel

Lead gen targets these middle-of-funnel objectives:

• Nurture prospects who are engaged with your brand
• Collect contact details for more personalized follow-ups
• Identify qualified leads and guide them toward a conversion
• Pass qualified leads to the sales team to close the deal

Timing is key for both strategies

Many sales and marketing teams run demand and lead gen campaigns simultaneously. However, they target prospects at different stages of the sales funnel.

Think about timing in terms of the sales funnel. Demand gen comes first, as it aligns with top-of-funnel marketing activities like building awareness and creating demand for your product or service.

Because it's a long-term strategy, demand gen tends to take more time. While there's no standard timeline, demand gen often includes several touchpoints across multiple channels over many months.

Lead gen comes later in the sales funnel. It aligns with middle-of-funnel marketing activities like collecting contact details, nurturing leads, and guiding them toward sales conversions.

Compared to demand gen, lead gen takes place over a shorter time frame. But in many cases, lead gen also involves multiple touchpoints on the path to a conversion.

The different tactics for lead generation and demand generation

Demand generation for brand awareness

To generate demand for your product or service, you’ll want to share educational, engaging, and authoritative resources with a wide audience. Focus on building awareness and generating interest rather than getting conversions.

Use demand generation tactics across channels and formats like:

• Video marketing: Educate and entertain prospects via short- and long-form videos or webinars. At Livestorm, we use our own software to share automated webinars that engage viewers asynchronously.
• Social media marketing: Introduce your brand to your target audience via engaging social media posts. Use tools like HubSpot to create posts that resonate with your ICP and grow your community.
• Search engine optimization (SEO): Capture prospects' attention as they search for relevant topics. Use demand generation tools like Ahrefs to optimize your website and attract potential customers.
• Content marketing: Publish helpful content that answers prospects' questions and builds trust. Use tools like Semrush to create content plans and do keyword research.
• Pay-per-click (PPC) ads: Reach a wider audience with search, display, and video ads. Use tools like Optmyzr to manage paid keyword lists and maximize the value of your ad campaigns.

Lead generation for capturing leads

To transform demand into leads, you’ll want to share personalized resources and gated content with engaged prospects. Focus on driving smaller transactions like collecting prospects’ contact details as you identify qualified leads and convert them into customers.

Optimize your sales funnel with lead generation best practices like:

• Hosting live webinars: Invite interested prospects to online events with exclusive material and in-demand hosts. At Livestorm, we engage with prospects during real-time webinars. Then, we follow up with them via email afterward.
• Promoting lead magnets: Create high-value lead magnets with original research and in-depth solutions. Distribute them via social media, PPC ads, and SEO in exchange for prospects' contact information.
• Sharing social proof: Position your brand as a trustworthy solution by sharing your awards, press mentions, and customer testimonials. Publish social proof on your website and share it on social media.
• Developing follow-up sequences: Reengage prospects after they attend your webinar or download your lead magnet. Continue to provide value and prompt them to take the next step toward a conversion.
• Personalizing website content: Show custom website content to various buyer personas or prospects from different companies. Create personalized experiences to drive more signups.

How to measure lead generation and demand generation

Because demand generation focuses on brand awareness and audience engagement, marketing teams typically measure metrics like:

• Social media reach, impressions, and engagement
• Video views and webinar signups
• Website impressions and click-through rates
• Website engagement rates and bounce rates

Since lead generation focuses more on lead nurturing, qualification, and conversion, teams generally measure metrics like:

• Contact form submissions
• Demo requests and free trial signups
• Lead qualification rates
• Conversion and closure rates
• Customer acquisition costs

How to leverage lead generation and demand generation

For many sales and marketing teams, the conversation around these two approaches doesn't focus on demand gen vs lead gen. Instead, a typical B2B marketing strategy includes both.

Why lead gen and demand gen complement one another

Think of great demand generation as a precursor to successful lead generation. Without demand gen, your lead gen efforts and customer acquisition costs will be too high. Before you can identify interested prospects and guide them to a conversion, you have to introduce them to your brand and educate them on your solutions.

For example, say your demand generation team publishes a series of social media posts that link to your company's latest blog posts. After reading several of these posts over the course of a few months, a prospect might eventually sign up for a webinar featured in one of the posts.

Then, suppose your lead generation team coordinates the webinar and follows up with all the prospects who attended. After a couple of follow-ups, an engaged prospect might agree to register for a demo or sign up for a self-service trial. From there, the lead gen team would hand off the lead to sales.

When to prioritize one approach over the other

Demand and lead gen often work best in tandem. However, sometimes it makes sense to prioritize one over the other.

You may want to focus more on demand gen if your ICP is unaware of your brand or the solutions you offer. This is particularly true for startups or businesses expanding to new markets.

You may want to focus more on lead gen if your brand awareness is growing but you don't have many qualified leads to show for it. This way, you can lead engaged prospects down the sales funnel.

Tips to align lead gen and demand gen

To get maximum value from your marketing strategy, get your demand and lead gen teams on the same page. Align on these key elements:

• Campaigns: Coordinate campaign concepts and channels so your lead gen team can build on the foundation that your demand gen team created.
• Tools: Use the same tech stack so you can easily share prospect data across channels and campaigns while remaining GDPR compliant.
• ICP: Get clear on your company's ideal customer so you can target the prospects who are the best fit for your business and most likely to benefit from your solution.

Livestorm for demand generation and lead generation

Whether you need to improve demand gen or lead gen efforts, Livestorm can help. Our webinar software works as a demand generation and a lead generation tool. With Livestorm, you can:

• Educate and build trust with prospects via on-demand webinars
• Engage prospects in real-time and share custom content via live webinars
• Create webinar funnels and follow-up sequences to nurture leads over time
• Integrate Livestorm with your tech stack to automate demand and lead generation

Ready to test it out? Sign up for a free Livestorm account and schedule a webinar in minutes.