Account-based marketing vs. demand generation: What’s the difference?

Learn the key differences between account-based marketing and demand generation and when to use each strategy in this guide.
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Did you know that HubSpot found that 67% of B2B brands leveraged account-based marketing in 2021? 

B2B marketers have a variety of marketing tactics at their disposal when it comes to expanding their reach and generating new customers, including ABM and demand generation.  

Having a firm grasp of the two marketing approaches means you’ll know how and when to effectively implement them to generate new business and impact your bottom line.

In this post, we’ll define account-based marketing vs demand generation, provide proven strategies, and indicate when to use each one.

What is account-based marketing?

Account-based marketing, also known as ABM, is a marketing tactic that involves going after and building relationships with strategic accounts. These prospects are likely already in your system and have been identified by your team as potential high-value customers. 

Often, they have a higher chance of converting and signing bigger contracts than other leads. 

ABM can effectively shorten the sales cycle for these potential customers with a targeted strategy. It typically involves a one-to-one campaign or personalized approach based on the buyer’s journey and where they are in the sales funnel. 

In order for ABM campaigns to be successful, the sales and marketing teams must be on the same page and use consistent messaging.

What does account-based marketing look like in action? Account-based marketing can take a variety of different forms. This includes email, paid ads, blog posts, ebooks, landing pages, case studies, direct mail with personal gifts, and other personalized content.

What is demand generation marketing?

Demand generation is a marketing tactic that focuses on getting new leads. This type of broad lead capturing is designed to generate new traffic to the company and establish brand awareness. It’s commonly used to create a stable pipeline of new leads that can be handed off to the sales team.

A common mistake made by B2B marketers is mixing up demand generation with lead generation. However, the two are not the same. 

Demand generation seeks to grow your audience, while lead generation is aimed at converting the audience into qualified leads. Demand generation marketing can feed into lead generation but are two separate strategies. 

So, what does demand generation marketing look like in action? 

The exact strategy your company will take with demand generation can vary

No two marketing strategies are identical, and you may find that one approach resonates well with your audience while another fails to gain traction. Common tactics for demand gen. marketing include gated or downloadable content, podcasts, webinars, blog posts, SEO, video, direct mail, and contests.

What’s the difference between account-based marketing vs demand generation?

demand gen vs ABM

Demand generation focuses on gathering new leads while account-based marketing develops relationships

Here’s a common analogy used to compare the two. Imagine you’re going fishing, and you take a both net and a spear. Each tool is capable of catching fish, but they use different strategies. 

In this example, your net would be demand generation because you use it to bring in a wider audience. It’s about quantity, not quality. Your spear would be account-based marketing, which takes more time, but is targeted to specific accounts. 

Each tactic also has a different campaign objective, customer focus, and metrics for success. Let’s compare each of those.

1. Campaign objective 

Your business objectives will help determine which tactic is best for your sales and marketing goals. Define what you want out of your campaign before you implement your plan. 

ABM, and sometimes ABE, is ideal when you’re doing enterprise sales with larger contract sizes and longer sales cycles. Let’s say you’ve identified 150 strategic, high-value accounts that you are looking to target. This is where ABM comes in. Use this tactic to focus on these viable prospects and increase conversions.

Demand generation tactics are ideal when you’re looking to broaden your list of prospects. With demand generation, you’re casting a wider net so you can build awareness and spark interest in your brand

The objective is to grow your list of prospects and capture as many leads as possible. You’re not targeting your hot leads just yet.

2. Customer focus 

The customer focus of demand generation and account-based marketing is not the same. Each tie directly to your campaign objectives as described above.

Account-based marketing is geared toward a more specific audience that has already been identified. The focus of this tactic is to nurture leads with consistent messaging across all communication. This means sales and marketing teams must be in sync to successfully convert customers with an ABM campaign.

On the other hand, demand generation focuses on a broader market. Because the goal of a demand gen. campaign is to capture a higher volume of leads, the customer focus is less targeted than an ABM campaign. 

Of course, the leads generated in a demand gen. campaign can be sifted through and targeted in a later ABM push, but the customer focus will not be as specific for this step.

3. Success metrics 

You’ll want to measure and analyze the results of any marketing initiative, whether you’re using a demand gen. approach or an account-based marketing strategy. Evaluating your metrics allows you to not only see how your campaign performed but also gives you an opportunity to optimize your marketing efforts over time. 

However, the metrics you choose to analyze will vary based on your business goals and marketing objectives. 

Account-based marketing is often measured by two types of metric groups: customer acquisition and expansion revenue. Customer acquisition metrics may include pipeline growth, sales velocity, and new customer revenue. Expansion revenue metrics will refer to upsells, cross-sells, retention rate, and customer lifetime value. 

On the other hand, demand gen. is typically measured by three types of metric groups:

  • Engagement
  • Performance
  • And return on investment (ROI)

Engagement metrics may include click-through rates (CTR), unsubscribe rates, and read rates. Performance metrics may include the number of qualified leads and sales cycle length. ROI numbers often involve conversion rate, total revenue generated, and even the customer acquisition cost.

Is ABM a part of demand generation or a standalone marketing strategy? 

While demand gen. and ABM are separate tactics, they often come together to form an effective B2B marketing strategy. Think of them as programs that enhance each other instead of isolated approaches. While they can work separately, they also go hand-in-hand.

Account-based marketing focuses on targeting specific prospects, taking a quality over quantity approach to new leads. On the other hand, demand gen. marketing delivers on quantity over quality by casting a larger net to generate new business.

A well-executed demand gen. strategy increases the effectiveness of account-based marketing tactics. When used together, the two methods target customers at different points of the buyer journey within the marketing funnel

Demand generation marketing helps by setting up a viable pool of potential prospects. From there, account-based marketing narrows the field and selectively targets the highest-value customers.

Choose whether account-based marketing vs demand generation is right for your business

Demand generation and ABM both have their places in B2B marketing strategies. Both help companies foster leads and boost conversions. The biggest difference between the two is where they’re implemented in the customer journey.

You wouldn’t expect a targeted approach to work without first identifying what makes a qualified lead. Likewise, you wouldn’t want to send out a general demand gen. message to a customer who’s more likely to buy with a personalized upsell. 

You need to be selective about the tactics used at different stages of the buyer journey. That’s how you’ll know whether to implement demand gen. or ABM tactics.

At the end of the day, you’re still going “fishing” for customers. You’ll just need to determine which tool to bring with you.

Ready to drive your growth with a refined B2B demand generation process? Request a free demo of UserGems. 

Why UserGems

UserGems helps companies generate more revenue by combining relationship data with trigger events to surface the most relevant buyers for each company. With UserGems, our customers get a bigger pipeline and win more often.

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