Lead Generation vs. Demand Generation – What’s the Big Difference?

To run a successful agency, it’s not enough to offer great products and services and wait for the clients to roll in. It’s equally important to lay out a customer journey that prospects can follow from initial discovery through to becoming paying clients. This includes demand generation and lead generation, two phases of customer acquisition that are often mistaken as interchangeable.

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So, what exactly is the difference between lead generation and demand generation? Lead generation generally refers to turning interested prospects into active leads you can nurture, while demand generation refers to brand awareness-building. Understanding the nuances that distinguish demand gen vs lead gen can help you skyrocket your performance in both areas, so read on to find out all you need to know about both these essential agency activities.

What is lead generation?

Lead generation is the process of capturing leads—generally in the form of gathering email addresses from prospective clients—that you can nurture toward becoming paying customers.

Having a lead generation system in place is essential to growing your agency. Factors like client churn and competition from other agencies will always erode your client base, and being proactive about filling your lead pipeline is key to counteracting these forces.

 A robust lead generation funnel can include a wide range of lead sources, including: 

• Content marketing lead generation: Providing valuable, relevant, or entertaining content through blogs, videos, and other formats to attract leads and encourage them to sign up.
• Lead generation email marketing: Sending lead generation emails to prospects to keep them engaged with the brand, nurture relationships, and move them along the customer journey toward conversion.
• Social media marketing: Using platforms like Instagram, TikTok, and LinkedIn to share content, engage with audiences, and build a community around the brand.
• SEO lead generation: Using search engine optimization (SEO) techniques to aid website and lead generation landing pages to rank higher in search results.
• Paid ad lead generation: Using pay-per-click (PPC) advertising on platforms like Google Ads and Meta Ads to target audiences and drive traffic.
• Local lead generation through events: Participating in trade shows and other industry events to connect with leads directly. Webinars and online events expand the reach of this lead generation tool.

AI is changing up this lead generation game too, providing new ways to find leads on autopilot. Check out this video for more on how to do just that:

What is demand generation?

Demand generation is the buzz-building, awareness-driving phase of client acquisition. 

Before a prospect provides their email address enabling you to engage in further lead nurturing activities, they need to care about your agency enough to accept further marketing from you. From creating brand awareness to providing education about your services, demand generation gives prospects the “why” they need to continue engaging.

The channels used for demand generation are much the same as those used for lead generation, but the focus of demand gen campaigns is distinct because the target audience is less knowledgeable about your business. 

Let’s look at key distinctions and synergies between lead generation vs. demand generation to clarify best practices for approaching each type of campaign.

Key differences between lead generation vs. demand generation

Understanding the key differences between demand generation and lead generation can help you craft clearer, more effective messaging at every stage of your client journey:

• Primary objective: Demand generation seeks to create awareness and interest in your brand or service for a broad audience. By contrast, lead generation is geared at identifying and converting individual prospects into customers.
• Funnel stage: Demand generation is a top-of-funnel (TOFU) activity targeting audiences who may not yet be aware of the need your agency can address. Lead generation is a middle-of-funnel (MOFU) to bottom-of-funnel (BOFU) activity targeting audiences actively shopping for a solution you can provide. 
• Key metrics: The most important metrics to track in demand vs lead generation differ. Lead generation is typically measured by lead conversion rates and sales revenue. Meanwhile, demand generation success is evaluated based on brand awareness, website traffic, and engagement levels.

How lead generation and demand generation work together

Lead generation and demand generation are complementary, and agency success hinges on making both campaign types work synergistically to maximize your return on investment (ROI).

Successful agencies integrate both strategies to build a positive reputation, earn brand authority, and ultimately convert prospects into clients.

Lead generation feeds into demand generation by providing a steady stream of qualified leads. The more these leads engage with your agency, the more buzz you will generate for prospects in the earlier stages of your funnel. 

At the same time, demand generation supports lead generation by creating the awareness and interest necessary for conversions. Prospects uncovered at the demand generation stage ultimately move along the funnel to the lead generation and conversion stage, so crafting a coherent, on-brand experience is important throughout their journey. 

5 tactics to combine lead generation and demand generation strategies

Demand generation marketing vs lead generation marketing requires unique approaches, but combining them effectively by aligning your messaging and targeting across both strategies is the key to unlocking agency growth. These 5 techniques can help you do just that.

Create valuable content

To attract high quality leads, delivering top-notch content is a must. From the lead magnets on your lead generation website to the content you share on social media, content is a key pillar of both lead generation and demand generation. 

Effective content is aimed at educating and informing your target audience about your services and niche. This helps generate demand by positioning your agency as an expert, while also capturing leads through content downloads and email sign-ups.

Keep in mind that being educational and informative doesn’t always mean being salesy, especially when it comes to demand generation campaigns. It can be just as valuable to share your know-how and demonstrate your deep understanding of your industry without explicitly promoting your product. 

Marketing automation tools can be particularly helpful in this area, enabling you to schedule your blog posts, infographics, social posts, and other content. Lead generation outsourcing can also be worthwhile for growing agencies since content marketing requires considerable time that might not be available to small busy teams.

Implement a lead scoring system

A golden rule in digital marketing is to always collect and analyze data. By using a lead generation database, you can automatically identify the most qualified leads based on their engagement with your content and website. 

A CRM for lead generation also makes it easy to track exactly which lead source each lead comes from, so you can identify the most impactful channels. Then, once leads are in your system, you can track which source produces the highest number of conversions, and the average value of the customers from each source. 

The ability to parse this granular data is a superpower because it enables you to confidently allocate your marketing dollars where you know they’ll be most impactful. For example, you might find that social media brings in lots of leads, but your lead scoring system might reveal that you have better conversion rates and more high-value clients from your SEO leads. With this knowledge, investing in boosting your organic search traffic is a no-brainer.

Use buyer intent data

Sometimes, timing is everything. Tracking lead generation vs demand generation data can help you identify moments of heightened buyer intent when your ideal customers are more likely to convert.

For example, you might find that when buyers move to a new company, they’re more receptive to finding new digital marketing partners. By tracking these moves in your CRM, you can strike when the iron is hot and boost your conversions.

Develop an account-based marketing (ABM) strategy

ABM is a B2B marketing approach in which you focus on specific, high-value accounts rather than a broad audience. It requires collaboration between marketing and sales to identify, nurture, and close these accounts. 

Thinking back to the difference between demand generation and lead generation, ABM strategies encompass both client journey stages. Sales intelligence tools can be used to identify target accounts, monitor for buying signals, and trigger points to engage key decision-makers with personalized, targeted demand-generation campaigns. Engagement data can then be used to identify and pursue qualified leads and to nurture them to conversion.

Combine content marketing with direct mail campaigns

Direct mail campaigns may be costly at scale, but in the context of an ABM strategy, they can be a highly effective complement to your digital content marketing. Instead of sending mailers to thousands of businesses, consider taking a more targeted approach and sending personalized direct mail pieces to key contacts at target accounts. 

A personalized piece of mail landing on their desk can be a powerful way to cut through the digital noise and make your agency more memorable, compounding the effects of your content marketing.