What Is The Difference Between Lead Gen And Demand Gen?

Lead Generation

Lead generation is comparable to performance marketing. It’s focused on the top of the funnel and short-term transactions. Lead generation focuses on bringing in traffic that will become new leads. In its simplest form, lead generation is more focused on quantity over quality. 

Demand Generation

Demand generation focuses on full-funnel marketing. It focuses on generating more qualified leads to help grow your pipelines and revenue. Rather than quantity, it is focusing on the quality of lead to help convert buyers.  

Benefits Of Demand Generation

There are many benefits of using demand generation strategies as opposed to lead generation. Here’s a list of some of the major benefits you’ll see by using a demand generation strategy:

  • Better alignment across all teams
  • At least 4x better conversion rates
  • Better scalability with spend
  • Long-term brand building

Demand generation helps match the way you’re selling to how buyers want to buy. By switching the focus from top-of-the-funnel marketing to full-funnel marketing, you’ll be able to market to customers throughout the buying journey. Demand generation helps increase the pipeline and closes more revenue than having a lead generation focus.

Many marketers simply pump more money into what they are already doing, expecting it to improve the results. However, that strategy won’t work. You need to change what you’re doing to achieve better results. Remember that the buyer’s journey is not always a straight shot. You’ll need to be guiding your customers down the funnel by providing the information they need to see the full potential of your product and the pain points it will solve for.

Create Demand, Don’t Just Capture Demand

It’s important to understand that creating demand is different than just capturing demand. Many companies are only capturing demand through low-intent channels. Creating demand involves more strategy on your part. Study the data to understand the buying patterns of your customers and what people are looking for. In order to create demand, you need to leverage high-intent sources for your marketing, such as google search, lead aggregators, and review sites.

When creating demand, you need to be informing and educating people about your product. Help them understand the pain points it solves so that when they move into the buying cycle, they already know what features you have and how it helps increase their overall revenue.

Establish What A Lead Is

It’s important to note that marketing’s definition of a lead may very well be far different than the sales team’s definition. You should redefine what a lead is.

In an episode of Digital Conversations with Billy Bateman, Chris Walker shared amazing insights on this topic. Chris stated, “someone that downloaded a piece of content is not a lead, they’re a contact.” And that’s so true! We tend to think that every email we capture is a qualified lead, and that just isn’t the case. A lead should be defined as someone who has shown a little more interest than just downloading content.

Challenges Of Demand Generation Marketing

If you’re switching from a lead-generation strategy to a demand-generation strategy, or just starting to develop your demand-generation marketing strategy, you might face some challenges along the way.

If the executive team or senior leadership in your company is not aligned with your marketing goals, then you might face challenges while switching your marketing focus from lead generation to demand generation. This happens because most of the time people are used to focusing on the amount of marketing-qualified leads you are receiving. Instead, they should focus on sales-qualified opportunities (SQO).

When making the switch, the number of MQLs will go down, which causes executives to worry. However, they need to realize that although that number decreases, the amount of SQOs greatly increases.

Leads do not equal revenue. Qualified sales opportunities are what lead to more revenue. It’s all about your mindset. We are often too focused on the lead count, but what’s important is quality over quantity. Also, if you don’t have a comprehensive strategy with a solid framework, then switching to demand generation will fail.

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Pete Ketchum

Pete Ketchum

Contributor for Signals with a background in public service, tech, business and marketing.

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