Differences Between Demand Generation & Lead Generation

Demand generation and lead generation are two vital concepts in the world of B2B marketing. And yet, they can be confusing terms at times. Many marketers have a bad habit of using them interchangeably. Even when we’re talking about the right way to approach both, there are some similarities that make them hard to distinguish at face value.

Many people consider lead generation to fall under the broader umbrella of interest generation. Others view them as separate ideas that can work hand in hand. Personally, we think the best results come from treating demand and lead generation as two sides of the same coin.

Without generating interest, you have no leads to market to. Without an effective sales pipeline to get your leads to the transaction point, all the demand generation in the world won’t lead to a return on investment (ROI). So what exactly are these two concepts?? How do they interact with each other? What’s the difference, and, more importantly, what does that difference mean to your next marketing campaign?

Let’s break it down.

What is demand generation?

Simply put, demand generation is the process of turning strangers into leads. It can be easy to assume that conversion like that would fall under lead generation, but we have to keep in mind what a lead is.

A lead is someone who has shown interest in a brand, product or service. So you see – creating leads is at the heart of demand generation. In this process, you are generating interest, which ultimately ends with someone becoming a lead, not necessarily a sale being made.

Five points about demand generation

When defining demand generation, there are five points you can look at to understand how it works.

  1. Dealing with strangers

In demand generation, you are engaging with people who most likely have never heard about what you have to offer them. Still, these are people who have a good chance of being interested in your brand or product once you’ve actually introduced them to it.

These kinds of people are the most likely to turn into leads. So demand generation starts with understanding the needs and pain points of strangers you want to convert into leads.

  1. Creating interest

How do you turn strangers into leads? You show them a brand or product that directly addresses their needs. Remember, this point in the process isn’t about selling something; it’s about presenting someone with a possible solution to their problem. Demand generation is about attracting an audience of people who may want what you have to sell.

  1. Gathering information

One of the most concrete ways to turn a stranger into a lead is to get them to offer contact information. Once someone gives you a way to contact them (e.g. email address or phone number), then they’ve indicated an interest in receiving more marketing material or direct contact. Once you get someone to a point where you can follow up with them, you can consider them a lead.

  1. Filtering for leads

Demand generation isn’t just about creating interest but also filtering out people who don’t show any. This is as important as lead creation itself. Strong filtering can leave you with a higher-quality selection of leads to engage with, maximizing the resources you can spend on active potential customers.

  1. Interest defines success

The level of interest you generate will ultimately define how successful a demand generation campaign is. This phase isn’t about how many sales you make but how many people you get invested in eventually getting to the sales point. This is important because if you only ever measure sales, every demand generation project will fall short because none of them are designed to maximize that metric.

But there is a campaign that is…

What is lead generation?

So you’ve generated sizeable interest and created an audience of people who could potentially become customers. Now what? Lead generation and scoring, are the process of moving leads down the sales pipeline, which ultimately ends in them becoming a customer.

Five points about lead generation

Like demand generation, lead generation has five points you can use to distinguish it.

  1. Dealing with leads

Lead generation starts where demand generation ends. Once strangers have been turned into leads, it’s time to move them down the sales pipeline, also known as the buyer’s journey. This means that lead generation is about interacting with people who have indicated a tangible interest in your brand, product, or service – and volunteered a way to contact them about it.

  1. Creating a sales pathway

The buyer’s journey can be broken down into three points: attract, interest, convert. Demand generation can be simplified to the attraction phase. However, nurturing an interest is about presenting your sales message in a way that pulls people in and gets them thinking about your product as a solution to their problem.

  1. Using information

Remember how part of demand generation is gathering information about a lead’s pain points and needs? Now is the time to use it. Lead generation focuses on the information people have already volunteered about why they might potentially need your product. Engaging with them here is about showcasing an understanding of how your product fits into their lives specifically. Consider a micro-targeting strategy.

  1. Filtering for sales

Demand generation should filter out people who aren’t interested in the type of product you sell generally. Lead generation should filter for the people most likely to buy your product. This is often done by creating a buyer persona, which indicates which engagement points you need to hit to get your ideal customer to the sales point.

  1. Cost per lead defines success

Contrary to popular belief, sales aren’t the ultimate benchmark for a campaign’s success is. A thousand sales are a success for a campaign that aimed for five hundred and a failure to one that aimed for ten thousand. No, the most effective metric for lead generation is cost-per-lead.

This number tells you how much money you’ve invested for each new customer you’ve created. The less you have to spend for each successful sale, the more effective your team is at lead generation.

Think of demand and lead generation as two halves of the first cycle. You want to streamline both in the interest of your business and ensure that you’re constantly turning strangers into leads and leads into customers.


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Differences Between Demand Generation & Lead Generation – Any great demand gen or lead generation campaign starts with solid research and the freshest highly targeted lists. Impact Enterprise’s highly skilled data specialists can get the data, cost effectively and efficiently. Test pilots are always FREE. Services include, lead validation, data enrichment, contact research, data entry & CRM hygiene; content services include content management, influencer mapping and moderation for social media; AI Data Annotation services include image labelling, language processing and geospatial analysis. 

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