You know how in the movies there are two forces that have to come together to solve a problem? In marketing, these “forces” are demand generation and lead generation. What’s the problem they solve, you ask? Together, both strategies work to garner leads and convert them into customers.

Though both strategies are essential to marketing success, they do have their differences. For instance, demand generation is a top of funnel action that increases brand awareness and attracts new leads. On the other hand, lead generation strategies are more focused on the thoughtful creation and placement of opportunities for an audience to convert into net new leads and enter a company's database.

The truth is, we’re not pitting one strategy against the other in a demand generation vs. lead generation face-off. The purpose of this blog is to illustrate why demand generation and lead generation are crucial to attracting best-fit leads and how they work together to amplify marketing initiatives and increase conversions.

What is Demand Generation?

Demand generation is the process of leveraging top of funnel content, tools, and materials on the website and elsewhere on the web to tell your brand’s story and  spark interest in target audiences. The goal of demand generation is to enlighten audiences on the industry need for the product or service you provide. Additionally, when stepping into new markets, the process of demand generation is also key to staking your claim on your share of the market.

Through demand generation, potential buyers uncover the truth that the problem they’re facing has a solution — your solution! By consistently delivering thought leadership to educate and build credibility, demand generation positions your brand as a pioneer within your industry.

Let’s take a look at an example. Say your company sells automation as a service to IT developers to streamline their development processes, enabling them to spend time on value-adding activities. As a B2B marketer in the tech space, you know that developers are often forced to waste time on administrative tasks. Creating top of funnel content including blogs, pillar pages, and other free and easily attainable resources to educate developers on the need for your IT automation solution is key to increasing brand awareness. This content informs potential buyers that your brand exists, is credible, and has a necessary and effective solution to their problem.

Essentially, demand generation:

• Increases brand awareness
• Educates audiences
• Generates trust

What is Lead Generation?

Lead generation is the process of delivering thoughtful conversion opportunities across content, tools, and materials to ultimately retrieve buyers' contact information so that they enter your database. With successful lead generation tactics in place, you can build segmented nurture campaigns with the goal of converting new leads into Marketing Qualified Leads (MQL).

The purpose of lead generation is to craft meaningful calls-to-action through various marketing channels such as paid digital ads and digital assets to elicit content downloads, demos, and free trial requests from best-fit leads. For instance, gating certain content behind a contact submission form compels leads to share with you their personal information such as their name, email address, job title, etc., to access the resource. Now, with this contact information, you can begin lead nurturing immediately. 

Lead nurturing campaigns that offer up personalized and relevant content to leads take them through their buying journey. As the leads engage with your emails and any downloadable content provided inside the emails, they convert into MQLs which means they’re ready to talk to sales.

A primary difference between demand generation and lead generation is that lead generation is a huge area where sales and marketing teams need to align. Meanwhile, demand generation is left solely to marketing. Lead generation is a cross-sectional strategy aligning sales and marketing to measure and track lead quality and lead buyer propensity. Ultimately, leads that convert through marketing channels are only as good as the sales teams who're "working" them think they are. 

How Do Demand Generation and Lead Generation Work Together?

Demand generation and lead generation are two strategies that are deeply connected. Think of demand generation as the engine to lead generation’s car. Without leveraging demand generation to increase brand awareness and attract new potential buyers, your lead generation tactics may fall short. Think about this: how could you capture a lead’s contact information if no one knows your brand?

Take a look at this example of how demand generation and lead generation correlate. HubSpot recently published a blog on 13 Subject Line Tester Tools to Boost Your Email Open Rate. Through SEO, social media, and direct traffic, this blog is attracting visitors that are interested in increasing their email open rate. At the end of the blog, they included a call to action (CTA) to download 25 sales email templates. Therefore, when a visitor clicks on the CTA to download the email templates, they’re taken to a landing page where they can fill out their contact information to access the templates. Boom — now they’re a lead. From here, HubSpot will drop this lead into a workflow to nurture them throughout their purchase journey up until they become an MQL and then, hopefully, become a customer.

Essentially, demand generation fuels lead generation. And when 53% of marketers spend at least half of their budget on lead generation, it’s no surprise that demand generation is vital to marketing success.