Demand generation vs. lead generation: A complete breakdown by the experts

Demand generation vs lead generation: learn what they are, how they’re different, and why you should use them to build a healthy sales pipeline.
A table describing the differences between demand generation and lead generation
Table of Contents
Share the love:

Knowing the difference between lead gen and demand gen is vital for leveraging both tactics to build a healthy sales pipeline.

Where demand generation drives interest in your business, lead generation captures interested folks as leads, then nurtures them into customers to increase sales.

This is only a surface-level comparison, though. Demand generation vs. lead generation runs deeper than that, which is why we’ll use this guide to walk you through the:

  • What each one is
  • The different strategies you can use for them
  • And, how the two are different.

What is demand generation?

Demand generation refers to growing awareness and interest in your product or service.

In short, demand gen is the foundational step to driving sales. After all, it’s only when your target audience is aware of your business as a credible solution to their problem that they’ll develop an interest in buying from you.

Typical goals for a B2B demand generation strategy include:

  • Growing brand recognition and credibility
  • Gaining your target audience’s trust
  • And establishing yourself as an industry authority.

Examples of demand generation strategies

From using interest-generating content to cold calling to raise awareness, there are numerous demand gen. strategies to try.

Remember, though: your strategy should be geared toward gaining your target buyers’ trust and establishing yourself as an authority in your field. Customize and adjust your strategy as necessary so that it best reflects your market using these common demand gen strategies.

1. Top-of-the-funnel content marketing

Top-of-the-funnel content marketing involves creating informational content to drive interest and establish credibility. “It provides people with free value in an educational way that builds trust and establishes authority,” notes Vito V., the Founder, and Director at Martal Group.

Since the aim is to win your target audience’s trust, start with talking to people who align with your ideal customer profile (ICP) to learn about the questions they have. You can also head to social media and Q&A platforms like Quora and Reddit to find out what your target audience wants to know. Then, create content that addresses their questions and concerns.

It’s also important to use different content types to meet your target buyer’s content consumption preferences. At Paragon, Brian Yam, the Head of Marketing, shares that they use a handful of different content types.

“By presenting relevant resources, guides, and thought leadership, and weaving in the category and our solution, we have introduced Embedded iPaaS as a category to solve the problem of building native integrations.”

Director of Digital Marketing at Lacework, Simon Chuang, also recommends using thought leadership content:

Expert quote on using thought leadership content in demand gen.

2. Paid media

Creating educational content is only one part of the demand generation puzzle. The other part? Driving traffic to the content you publish.

One effective way to do so is using paid ads.

It’s a tactic that the Metadata team uses. Their Sr. Demand Generation Manager, Bryttney Blanken, shares, “We invest roughly 20-40% of our total paid media budget in creating demand, meaning we build campaigns that point to valuable content with the goal of educating and building trust with our ICP.

“This has impacted our overall demand generation strategy by decreasing our variable cost-per-opportunity and increasing our month-over-month demo requests by 290% from paid social ads."

3. Sponsorships

Sponsorship can be made up of contributing to industry-leading blogs, co-hosting podcasts, and sponsoring newsletters. It’s another proven B2B demand generation strategy to try that will boost your credibility and brand awareness.

Yam’s team at Paragon has used this tactic effectively to generate demand. “Building demand for the category has mainly been through content and sponsorships, be it newsletters or podcasts.”

It works for two main reasons:

  • It helps you tap into industry leaders’ already-established audiences
  • It grows your social proof as industry leaders recommend you

Instead of partnering up with any publication or podcast, though, be sure to research your target site’s audience to make sure it aligns with your ICP.

4. Integrated marketing

“People are going to consume your brand in multiple places, so making sure each channel is providing value, speaking to the same points, and that it’s incredibly important so that when it comes time for them to convert — whether that is through paid, organic, or through outbound — the process and messaging are seamless,” suggests Isaac Ware, UserGems’ Director of Demand Generation.

To make sure all your demand gen channels are on the same page in terms of the value they offer, ensure your marketing and sales teams are aligned. They both need to develop shared goals and exchange notes on the target audience to successfully drive results.

Pro tip: Use intent data to save yourself from creating artificial demand.

“Intent data gives you detailed insights into buyers currently displaying signs of being ready to purchase,” says David Reid, the Sales Director at VEM Tooling.

“Access to intent data sources allows your team to avoid the trap of inventing demand and focusing on accounts that are in-market and ready to buy. Using it helped us to make the products visible to the buyers who were ready to buy that particular product.”

Demand generation metrics to track

“The main KPI for demand gen should always be qualified pipeline,” observes Isaac Ware from UserGems.

To this end, track these demand generation metrics to gauge how successfully your demand gen campaign is growing awareness and interest in your product:

  • Website demo requests
  • Click-through rate
  • On-site metrics such as time on page and bounce rate.

What is lead generation?

Lead generation is the process of capturing and nurturing a prospect’s interest in your product or service with the aim of guiding them through the sales funnel to make a purchase from you.

Since the aim is generating quality leads to build a healthy sales pipeline, a lead generation strategy’s goals include: 

  • Capturing and using lead information to refine your messaging
  • Building relationships with leads to move them down the sales funnel.

Examples of lead generation strategies

After you generate interest in your product using demand gen, lead generation comes into the picture. It’s aim? To capture the most interested audience members as leads. Once you have a pipeline full of prospects, lead gen works to nurture them into customers.

Like with demand gen, lead generation strategies also need to be tailored to your target audience. While most of the tactics you’ll use between the two will differ, some are relevant to both — like paid media. In cases like this, you’ll need to refine your strategy based on your ICP and where and how you want to reach them. 

Here’s how many companies use lead gen to capture leads:

1. Middle-of-the-funnel content marketing

Middle-of-the-funnel (MOFU) content nurtures leads’ interest by educating them about your product and how it solves their specific problem.

Examples of MOFU content you can use include product comparison posts, case studies, white papers, product-led webinars, and eBooks. You can gate most of this content to capture lead information and grow your pipeline.

Paragon’s Brian Yam recommends creating MOFU content that answers questions high-intent users have.

“Leveraging content that would only drive interest from high intent users as lead magnets on LinkedIn,” advises Yam. “It drives the majority of our pipeline, and also has served as a demand gen strategy given how new our category is.”

What’s more, Derrick Hathaway, the Sales Director at VEM Medical, commends thought leadership content for generating leads. “The one lead generation strategy that worked for us was to provide informative content to our target audience. We were able to attract new customers in a variety of ways by answering common questions and positioning our brand as a thought leader.”

Be mindful, though: “If you are gating content, use LinkedIn lead gen forms that are simple to fill out and avoid slow loading, clunky landing pages,” Simon Chuang from Lacework notes.

2. Paid media

Yes, paid media again — both UserGems’ Isaac Ware and Metadata’s Bryttney Blanken recommend paid media for lead gen, with Bryttney sharing that paid media brings them leads at a low lead acquisition cost.

Bryttney explains, “For Metadata's annual event DEMAND, we used paid ads to drive a percentage of event registrations across LinkedIn and Facebook. We drove 2500+ total leads with a low CPL of $47 (33% more efficient from the year prior), resulting [in] impactful results down the funnel, which helped us drive more pipeline and revenue. We are now nurturing these event attendees based on account rank to build on the trust and momentum we established through the event.”

The key to winning at using paid media as a lead generation strategy? Personalizing paid media content to speak to your target lead.

“Make sure the messaging is specific to them as an individual in their role. With market conditions making people anxious, it is important you speak to their personal concerns in addition to their company goals,” Ware explains.

3. Email marketing fueled by audience segmentation

“Maintaining contact with your prospects and customers still largely relies on email marketing. Email can be a useful tool for establishing relationships and can directly affect sales if used properly,” writes Alex Armstrong-Paling, the Managing Director at Tool Fit.

Instead of mass emailing your list with generic messages, segment your email list according to their persona and the funnel stage that each lead is in. From there, nurture them by sending unique and personalized content.

“Monthly content or informational newsletters, automated email nurturing sequences that are customized for different contacts, and sales, automated lead nurturing sequences that help marketers be more effective and consistent with an email marketing strategy are examples of the different kinds of email marketing assets,” adds Armstrong-Paling.

Aside from tactics that aim to personalize subscribers’ experiences to nurture them, ROI-driving email marketing is permission-based. This means that each time you ask for a lead’s email address, you also need to ask for their permission to email them relevant marketing content. Not only does this gain your leads’ trust, but it also builds a warm lead pipeline.

4. Live chat

“Customers adore having access to immediate queries,” notes Abe Breuer, CEO, and Owner of VIP To Go. It’s why Breuer recommends live chat as a lead gen strategy.

“You can gather contact information, assign the new contact to a salesperson for follow-up, and send a welcome email to your new lead all at once by setting up automation processes using Zapier or its counterparts.”

Start by going through your past conversations with customers to identify any questions they had before buying from you. Write out helpful and straightforward answers to these questions and set up a chatbot to share them with site visitors when they search for certain keywords.

Don’t forget to also give site visitors the option to connect with a sales rep through your live chat, as it’s a great way to nurture leads.

Pro tip: Enrich your pipeline with ready-to-convert leads by targeting your customers, prospects, and end users when they move to new companies. These individuals are 3X more likely to buy from you and more open to introducing your sales reps to their new teams. To this end, use a tool like UserGems to track customer job changes and add warm leads to your sales pipeline.

Lead generation metrics to track

Where most track the number of marketing-qualified leads (MQLs) to determine the success of their lead gen strategy, Lacework’s Simon Chuang believes it’s pointless to track this metric.

“If you are driving pipeline and ultimately closed/won revenue, you need to focus on meetings booked and specifically meetings booked moving forward or qualified sales opportunities. A key metric outside of measuring this by volume is measuring pipeline velocity. Are you moving accounts from each journey stage efficiently? If you can prove that out, that’s worth its weight in gold.”

Keeping this in mind, here are the lead generation metrics to track:

  • Cost per lead
  • Meeting booked
  • Pipeline velocity
  • Lead qualification rate
  • Lead conversion rate

Key differences between lead generation and demand generation

Demand generation and lead generation differ in several ways.

To begin with, demand generation aims to generate interest and awareness, while lead generation taps into the generated awareness to nurture interested folks further and drive sales.

As a result of this difference in goals, both tactics generate different results. Demand gen, for example, delivers potential buyers. But lead gen gives you a pipeline of interested buyers. Essentially, demand gen casts a wide net, while lead gen hooks the hungriest fish.

Martal Group’s Vito V. summarizes this well: “Demand generation attracts loads of potential buyers at the top of the sales funnel who are fit to convert if nurtured correctly. Lead generation increases the number of converted leads at different stages while shortening the sales cycle and increasing revenue.”

Paragon’s Brain Yam agrees: “Demand generation is not intended to help you book demos or get the lead. Its job is to educate and build awareness for the category, to show problem-aware audiences that there is a solution tailored to that problem, so when the problem becomes a priority to solve, your category, and subsequently your product, is the first thing that comes to mind.”

On the flip side, “Lead generation is meant to capture users at the bottom of the funnel, who have the problem and know there is a solution and are looking for the best solution,” Yam adds.

Here’s a summary of demand generation vs. lead generation:

A table describing the differences between lead generation and demand generation

Use demand gen and lead gen together for a healthy pipeline

A healthy sales funnel uses both demand and lead generation tactics.

Start with generating demand to grow awareness about your product and increase your credibility. This way, when potential buyers are ready to buy, you’ll be one of their top choices.

As these potential buyers express their interest, use lead generation tactics to capture their contact information and educate them further about how your product can solve their specific problems. In doing so, you can persuade them to choose you over your competitors.

But beware, not every prospect is worth nurturing. Instead of adding any and every lead to your pipeline, add only warm ones. This way, you can save yourself from wasting time and resources on nurturing irrelevant or cold leads. 

UserGems helps with this. It tracks customer, end user, and prospect job changes — allowing you to add alumni customers (read: ready-to-convert leads) to your sales pipeline.

It also identifies and alerts you of ICP-matching leads that start new roles. This way, you can reach out to interested buyers when they’re actively looking for a solution like yours and have the budget to invest too.

So what are you waiting for? Try UserGems today and grow your sales today by building a warm sales pipeline.

{{CTA-1}}
{{CTA-2}}

Want to grow your pipeline efficiently?