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Demand Generation vs. Lead Generation: Which Is Best for Your Small Business?

by Stephanie Weaver
Read Time: 5 minutes

The key to sustainable business success is building a steady pipeline of viable leads that convert into customers. However, nurturing relationships with prospective customers in today's digital world isn’t as simple as picking up the phone and cold-calling a list of leads. As such, many companies are pivoting to inbound sales methodologies to build trust with prospects.
Demand generation and lead generation are two inbound sales strategies used to attract and convert leads. But while these techniques are often referred to interchangeably, demand and lead gen practices differ wildly.  
Luckily, DirectLync is here to help you figure everything out. Keep reading to learn about the top four differences between lead generation and demand generation and which strategy is best for your small business. 

What is Demand Generation? 

Demand generation involves different content marketing tactics to generate buzz about your business and build demand for its offerings. This process promotes brand awareness, educates consumers, and cultivates trust.
Demand gen strategies include webinars, blogs, social media campaigns, podcasts, infographics, and search engine optimization (SEO).

What is Lead Generation? 

While demand generation strategies focus on top-of-funnel prospects, lead generation targets prospective customers who have passed through the awareness stage of the sales funnel. Lead gen is the process of capturing leads’ contact information so sales reps can reach out and start building relationships with them.
A few common lead generation strategies include gated content that requires audiences to enter their information to access the resource and retargeting campaigns.

Demand Generation vs. Lead Generation: Top 4 Differences

Now that you understand demand and lead generation better, it’s essential to know the key differences between these two strategies. This will help you decide which tactic is right for your small business.
Without further ado, here are the top four differences between demand gen and lead gen.

1. Goals 

As we previously mentioned, the primary goal of demand generation is to build brand awareness and educate potential customers. This starts building demand for your products or services. Even if customers don’t need or want your offerings right now, they may in the future.
Lead generation aims to identify, qualify, and nurture the leads you attract. These leads should reflect your ideal customer profile or what consumers you’re explicitly targeting. 

2. Outcomes

Since demand generation and lead generation serve different purposes, the two strategies will also have different outcomes. The ideal result of demand gen tactics is to get prospects excited about your offerings.
On the other hand, lead gen’s ideal outcome is to capture contact information from quality leads, including:

  • Names
  • Phone numbers
  • Emails
  • Roles
  • Company info

This data helps sales reps create personalized communications that build trust. 

3. Tactics 

Demand generation tactics look a lot different from lead generation strategies. Demand-gen marketing campaigns focus on familiarizing the right leads with pain points your business can solve.
Some examples of demand-generation strategies include:

  • SEO-optimized content: This improves your search rankings, allowing more people to find your business.
  • Thought leadership articles and interviews: Developing content that features insights and advice from subject matter experts (SMEs) establishes credibility and deepens trust. For instance, an HVAC company might create an informative article about indoor air pollutants and how to improve the air quality in your home.
  • Social media: Businesses can leverage social media to reach new audiences and amplify brand awareness.
  • Free resources: Ebooks, checklists, podcasts, and webinars add value to a customer’s life and establish your business as the go-to source to solve their problems.

Examples of lead gen content are:

  • Gated content: Also known as lead magnets, this type of content can only be downloaded or accessed after a lead submits their contact information.
  • Retargeting campaigns: These marketing campaigns aim to re-engage leads that have previously shown interest in your brand. 

4. Sales Funnel Stages 

A sales funnel is a visual depiction of a customer’s purchasing journey. Sales funnels have four primary stages, including:

  • Awareness: The first stage is when customers become aware of your products or services.
  • Interest: After prospects learn about your business, they’ll evaluate your offerings based on their needs and goals.
  • Decision-making: The customer will explore your packaging options and pricing.
  • Action: The prospect will decide whether or not they will purchase from your company.

Demand generation strategies target prospects at the tippy top of the sales funnel or awareness stage.
Lead gen is slightly further down the funnel at the interest or decision-making phases. 

Demand Gen or Lead Gen: Which is Right for You?

Many small business owners might have difficulty choosing the best tactic. Luckily, you don’t have to choose! Demand generation and lead generation strategies work better together.
In fact, you can’t have one without the other. If prospective customers don’t know your brand exists, you won’t be able to collect their contact information.

Ace Your Demand and Lead Generation Marketing Campaigns with DirectLync

Whether creating social media demand gen campaigns or organizing lead contact information, DirectLync’s robust digital marketing platform will optimize your efforts. Small business owners can use our intuitive, all-in-one online platform to plan and schedule social media and email campaigns, build custom contact forms, automate tasks, and manage contacts.  
To learn what DirectLync can do for you, sign up for your free 14-day trial today.