The Difference Between B2B Demand Gen & B2B Lead Gen (Don’t Put the Cart Before the Horse)

B2B marketers frequently use the terms “demand generation” and “lead generation” interchangeably. As vague and confusing as they may sound, they do not actually refer to the same thing. Two different terms, two different meanings! In this post, I will focus on the individual value of each tactic and how striking a balance between them can empower your B2B marketing strategy.

Demand Generation Versus Lead Generation

Demand generation drives awareness and interest in a company’s product and services. The goal is to drive closed business with minimal interaction with the consumer or business you’re targeting.

If that definition makes little sense to you (and rightfully so), the key takeaway is awareness. Demand generation uses targeted marketing programs to drive brand awareness and interest.

A demand gen campaign will market sharable content, often without requiring the reader to complete a call to action (CTA). Thus, a demand gen campaign prioritizes reach. It is less focused on gathering immediate leads and/or contact information.

Lead generation, on the other hand, drives interest or inquiry into products or services. The goal here is to collect qualified connections to build relationships to nurture. Your sales team needs contact information to follow up and close the deal.

Therefore, lead generation focuses its efforts towards collecting names and contact information for future follow-up.

These campaigns center their content around a call to action, motivating readers to record their information before accessing the content (“Want to read this awesome eBook? Fill out this form for a free download!”).

Lead generation campaigns typically require direct collaboration with your sales team—due to the resulting longer sales cycles, sales interactions, or negotiations necessary to convert leads to a close. Your marketing and sales teams should be working together to nurture leads to encourage closing sales.

Examples of Demand & Lead Generation in Consumer Terms, Without the Semantics

I’m scrolling through featured Snapchat content, as I typically do to avoid productivity at all costs, and suddenly an unprompted advertisement flashes across my screen.

It’s a glossy ad featuring Kim Kardashian and a few other pop-culture staples, pushing brand awareness for E Network. It is immediately recognizable and draws the reader (shamefully, me) right in. Now that is the demand generation component of this E Network marketing campaign:

• I’m drawn in by a high-quality portrait of Kim Kardashian that fills my screen.
• And now I am aware that this content is sponsored by the E Network.

However, there is another component to this Snapchat ad, which is the lead generation aspect. At the bottom of the ad, I was directed to scroll up to “Apply Now”.

So I scroll up and see that I could have the chance to attend an event hosted by E. All I need to do is give them my email address. So now through this campaign:

• The E Network marketers have collected my contact information, and I am now a potential lead.
• While my information may go to the prospect of attending a ritzy event, they can use my email for any marketing and/or sales-targeted efforts moving forward.

Sometimes Codependency is a Good Thing

While my Snapchat anecdote is not a B2B example, it should have illuminated how demand gen and lead gen are often codependent.

Without demand gen, lead gen campaigns will have a tougher time reaching buyers. And without lead gen, the marketer will have a harder time qualifying its impact on sales.

Despite their codependency, it is important that a marketer does not put the cart (lead gen) before the horse (demand gen). In order to successfully generate leads, the marketer must reach a broad range of people.

This is where the demand gen strategy (aka a large image of a Kardashian) comes into play. Brand awareness and reach should come before pushing your lead gen campaign.

Let’s look at this marketing funnel below to develop a better sense of a marketing program’s sequence:

A marketing funnel, like the one above, can give you a better sense of how to nurture your different-level leads. The initial demand gen/brand awareness may be generated through any of those platforms—social media, SEO, physical trade shows, etc in the “cloud” of the diagram.

Then we see how that demand can channels to convert users into leads. After the initial conversion, you can start to look at how you can move that lead further down the funnel towards a sale. But demand gen is an ongoing process, as these steps must be repeated and cycled through in order to successfully retain clients.

This may entail offering loyalty programs or discounts, sending consistent newsletters or even event invitations. So demand gen plays a critical role in not only generating new customers, but retaining those clients.

4 Tactics to Improve Your Digital Campaigns (2 Demand Gen + 2 Lead Gen)

You need a fine balance of demand generation and lead generation to properly grow your brand. B2B sales cycles can vary a great deal – but the key is that whenever your end customer is ready to buy, that your brand name is a part of that conversation.

Below are two tactics to empower your demand generation and two tactics to target and improve your lead generation.

Demand Gen 1: Produce Webinars/Content with Thought Leaders

The content you publish will either be “free” and available to users or “gated,” where they will have to fill out forms to access. Webinars fall under the “free” category. They are a particularly effective resource to incorporate both demand and lead gen strategies.

Creating a webinar featuring an industry big-wig can draw viewers that are already engaged within your niche. In turn, that will create valuable leads that are more inclined to pursue your company’s services. The lead gen portion can come in a form similar to this one, to “Reserve your spot” in the webinar.

Video webinars can be extremely powerful for brand awareness. Especially taking advantage of the personal aspect of putting a face on the screen. This means that getting authoritative figures on your webinar should have an even bigger impact than having them blog for your site.

Think of it this way – which is a stronger brand message? Quoting Steve Jobs’ opinion of your software, of having Steve Jobs give a presentation of your software on video?

Demand Gen 2: Consider Un-Gating Your Content

Who doesn’t love free stuff? A great way to generate demand for your core products or services is to create and distribute a free product. Many companies, however, put their “free” content behind a gate—aka your lead gen component, where a viewer must submit their contact information in order to access that content.

Unfortunately, internet users are lazy (yes, all of us). The less work we need to do to access something, the better. Asking for personal contact information in these form submission fields doesn’t help either.

Thus, it may be more strategic to un-gate your content (remove a sign-up requirement) to achieve more downloads. In fact, marketing strategist, David Meerman Scott, reports that:

We’ve seen that un-gated content can get 20 to 50 times more downloads than when it’s gated

Ensure the un-gated content you’re offering is educational, compliments your company’s services, and stays true to your brand. Educational content may be written content, reports, free tools, videos or anything you deem noteworthy. Great content positions you as a leader, driving your customer down the funnel. So get creative with the many different mediums available.

For example, here at Directive Consulting, we even created our own free podcast! We wanted to create content that C-suite level executives could consume easily and conveniently. After enough conversations with enough CEOs stuck in daily traffic, we realized a Podcast was the perfect medium.

This is not to say a marketer should forgo gating content all together. A productive strategy would be to allow the first piece of content to be completely free. To follow up, offer another enticing product. Now introduce the lead gen component and require the viewer to enter contact information.

Lead Gen 1: Segment Your Content & Offers

Before creating your marketing campaign, you must determine who your target customer is. Determining what matters most to the individual costumer will help you customize content, outreach, and copy.

A best practice is to divide your diverse audience into market segments with similar needs/pain points. Break down a user’s possible persona and include: industry, job positions, interests, geography, technology preference, etc.

You should be creating content that is customized to each of your unique ICPs (ideal customer profile). This organizational segmentation ensures you reach the specific interests of targeted customers. Relate to the individual and you’ll have a happy, reliable user!

Lead Gen 2: Embrace CRO (Conversion Rate Optimization)

According to the 2014 State of B2B Procurement study, 94% of B2B buyers do their own research online before making any type of purchasing decision. This makes a ton of sense and is not too surprising. With this in mind, your site and social platforms MUST be top-notch. Everyone is coming to your site before they contact you.

Marketing teams understandably want to drive traffic towards their website. Marketing teams can also look to execute conversion rate optimization (CRO) to get more from existing website traffic. There are various marketing tactics that can increase your CRO and convert visitors into higher-quality leads.

For example, you may want to add a real-time messaging tool to your website. Then it becomes possible to automatically offer help to your users, guide them through the funnel, and convert more leads. You also want to make sure that any landing pages in your campaigns are dedicated towards singular conversion goals.

For more tips on the general practice of CRO, you can check out the helpful guides below or check out Directive’s CRO Page.

Overall, you want to ask yourself: “Do I have different pages/experiences for different types of users?”

Plan with the End in Mind

Obviously the goal is to build revenue, but what is it that you want your specific campaign to achieve? Your company needs to define success and how you want to assess your leads. How will the leads you attain be worthwhile or a waste of time?

Success or measurement may be different between the two strategies. For demand generation, you may focus more on the reach of your marketing and the resulting conversions. For lead generation, you may focus more on the amount of leads and their quality. While it’s the marketing team’s duty to generate demand and lead strategies, it’s ultimately the sales team responsibility to close business. The marketing team should concentrate on the quantity and quality of the leads supplied to the sales team.

Pro Tip: Consider Implementing a Lead Scoring System

A common misconception is that demand generation is only about increasing the quantity of leads. However, a successful marketer is also concerned about raising the quality of those leads. A lead scoring system is one of the best ways to assess if your leads are of a high enough standard for your sales team.

Lead scoring works to determine whether an individual lead demonstrates sufficient interest to be considered a “hot” lead for your sales team:

This is accomplished by examining the actions taken at various touchpoints with your brand, such as whether they viewed a specific page on your site that suggests purchase intent, whether they’ve expressed interest in a demonstration of your product or used your free tools, or the stage at which the prospect happens to be in the funnel (such as discovery or consideration).

The more granular your picture of your users and where they are in the marketing funnel – the more you can customize your campaigns to convert them.

Takeaways

Demand generation and lead generation are different but contingent strategies. Recall the sequence of the marketing funnel—brand awareness must be the first step, then turning that awareness into a new contact through lead gen is the second step. Then, it is up to the sales team to act upon your marketing leads and close the business. How else are they supposed to get their coffee?

In our current post-digital market, every buyer does the bulk of their research online before ever contacting the seller—which is why your website and digital strategy must be first-rate. Invest in that drive demand and generate new leads. And get creative with it!