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Demand Generation

Growth

Demand Generation vs Lead Generation: What's the Difference?

Written by
Matter Made

It's normal to ask if there is a difference between demand generation vs. lead generation. On the surface, they sound like two sides of the same coin—like calling your pipeline the Buyer's Journey vs. a Sales Funnel.

But demand gen and lead gen are different concepts.

Understanding that difference transforms the effectiveness of B2B SaaS marketing strategies. It re-focuses your efforts on what matters at the end of the day—the quality of the lead.

At the same time, you'll avoid wasting your limited time, resources, and talent on leads who will never—I repeat "never"—become paying customers.

When you're finished here, you'll know the difference and how/when to use both to get more out of your SaaS marketing.

Demand Generation vs. Lead Generation: The Definition

Demand Generation is the act of deploying marketing campaigns to create demand for a product or service. It uses data to determine when, where, and how to accomplish this effectively.

Lead Generation is the act of leveraging marketing to collect contact information from people who may be interested in your product or service now or in the future.

The Purpose

With demand generation, you create buzz. Get the right people excited and talking about a problem your SaaS fixes. You want them to want you and see you as the solution to their business problems. As demand progresses, you become the missing link to meeting their goals, something they can't do without.

While demand gen does generate leads through landing pages, its purpose is to play the long game. You want awareness and positioning that can only happen over time.

By doing so, demand generation expands your reach and becomes a magnet for your ideal customers.

Lead generation, on the other hand, focuses on capturing identifying information, like an email. This allows you to personalize and continually improve the effectiveness of your nurturing.

Through it, you achieve a higher and faster MQL-to-SQL and Lead-to-Close Ratio in the shorter term. You increase your ability to deliver the most relevant marketing messages and content.

Additionally, that data reveals the precise moment a lead meets qualified lead criteria. This makes it possible to time the hand-off to sales and Speed the Lead expertly.

In the long term, you're gathering both quantitative and qualitative data. This helps you understand which leads are worth your time and energy. What are the signs that a lead is ripe for a conversation with sales?

Now, take this information back to the demand generation side. Through it, you improve your demand generation targeting precision.

And it comes full circle.

You have a clearer understanding of who to target. As a result, you generate demand from the right people, refining your top-of-funnel.

In doing so, you generate higher quality leads. And the cycle begins again, leading to exponential outcomes.

So it's no wonder 78% of marketers say they plan to commit a higher percentage of the marketing budget to demand gen, or at least keep it the same. While the top priority is generating leads, they recognize demand gen is critical to meeting that KPI.

Timing

Demand Generation vs. Lead Generation isn't an either/or proposition. You need both to grow your company effectively, but timing matters.

You have to create the buzz first. Any lead generation efforts will trickle if you're not implementing strategies to generate that demand first.

You can break this timing down into three stages of awareness:

  • Stage 1. Non-aware. They don't even know they have a problem. Top-of-funnel (ToF)
  • Stage 2. Problem-aware. They know about the problem but not how to fix it. Middle-of-funnel (MoF)
  • Stage 3. Solution aware. They know solutions exist but aren't sure which is right for them. Bottom-of-funnel (BoF)

This all comes down to the right message, the right time. One way to achieve this timing is through educational content.

This serves two primary purposes.

  1. It generates awareness. Of the problem, then the solution.
  2. It builds authority. Why should people listen to you in the first place? Content builds your authority and expertise. At the end of the day, they have a reason to choose your brand over another.

You'll focus on creating demand by ensuring the right people see the right content at the right time. To this end, specific content formats work well at each stage.

  • Stage 1. Non-aware. Make it easy and "low-risk" to start learning about their problem. Become present where they are but don't push them. Use long-form guides, blog posts, etc.
  • Stage 2. Problem-aware. Get them to take action toward learning more in-depth information. At the same time, you build trust and authority. Offer white papers, eBooks.
  • Stage 3. Solution aware. Help them finalize their decision. Share case studies, free trials, and demos.

Timing matters. Throwing problem-aware and solution-aware content at non-aware people will bounce right off. Sadly, a lot of B2B companies are doing just that.

Only 2% of B2B companies create non-aware content at ToF. This represents a tremendous opportunity for those who do.

At any given time, many more people don't know they have a problem.

Creating Demand

The gurus can argue all day long about whether demand is created or products merely fill a void already there. Both are true to some extent.

The problem exists. It's real, and it's impactful.

But with so many moving pieces in the typical business, it's not always easy for your future customers to name it, let alone find a fix.

If people aren't talking about the problem, few are aware of how impactful it is. They don't know others share the same frustrations. So it doesn't cross their minds that there could be a better way.

You need to create that buzz. That's where demand comes from.

By doing so, you start a chain reaction.

More leads. Better leads. More Leads. Better leads. Higher and higher revenues. Exponential growth.

Time to Create that Demand

It's all about timing. It's time to take your business to its next growth stage—generate demand, so high-quality leads come to you.

Curious about the power of demand gen? See how Dropbox increased targeting engagement by 6.5X.

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Coming up next:

Blog Post

Demand Generation

How to Create and Implement a Demand Generation Strategy

5
min read
min watch

Growing your company always includes an overhaul of your marketing strategy. What works on a small scale is unlikely to translate as you seek to expand market share, and you could waste a lot of money and time trying—with little to show for it.

This is the perfect time to implement a Demand Gen strategy to drive growth. Do the research and plan the smart way forward.

In this post, we’ll show you how to create and implement a demand generation strategy to drive growth.

Benefits of a Demand Gen Strategy

  1. Increase brand interest
  2. Generate higher-quality leads
  3. Nurture relationships that create brand ambassadors
  4. Earn and hold market share
  5. Re-engage existing customers to increase retention/ CLV
  6. Turn existing customers into Demand Gen amplifiers
  7. Larger deals
  8. Key accounts
  9. Higher ROI

Challenges of Demand Generation

  1. Building an audience
  2. Consistently creating high-quality content
  3. Budget constraints
  4. Marketing-Sales alignment
  5. Capturing demand
  6. Turning leads to customers

As challenges, these represent opportunities you'll need to directly address and overcome through Demand Gen strategy.

How to Create and Implement a Demand Gen Strategy for Growth

Create Buyer Personas

You have to define an audience before you can build one. Your buyer persona is a fictionalized yet data-based representation of what your ideal customer looks like.

The clearer understanding you have, the more directly and effectively you'll be able to communicate with this target audience to grow it.

You can define and refine the audience for your B2B SaaS by factors like:

  • Professional factors. Industry, job role, decision-making structure, goals, challenges
  • Personal factors. Demographics, interests, hobbies, news and information sources they trust, what they do for entertainment, and shared life experiences.
  • Intent factors. What's driving their decision-making processes right now? What are they looking for? And what do they need to know they've found it?

Mapping the Buyer's Journey

  • Non-aware. They're unaware they have a problem or its impact on their ability to do their job, get business results, etc.
  • Problem-aware. They become aware—or are made aware they have a problem and how much it's hurting them. They have begun seeking B2B SaaS to solve this problem and consider some options.
  • Solution-aware. Now, they're aware of the kinds of solutions that exist. They're evaluating needs, benefits, pros & cons, cost, etc., to finalize their selection.

This is a journey. It can happen quickly. But most of the time, the person travels along this path looking at various sources of information.

Your demand generation strategy must ensure that you become a source of information, so they travel the path with you. This gives you the power to guide this person.

On your side of things, Generate demand > Capture Demand > Nurture/Engage > Close > Retain/Re-engage.

Fail to create a full-funnel, multi-channel experience, and you'll lose them if you can get their attention in the first place.

Determine Your Goals for Demand Gen

Goals should always be specific, measurable, attainable, relevant, and timebound (SMART). They should take into account factors like:

  • How much can I achieve with this budget? Budget constraints, along with immediate business revenue needs, can drive decision-making. You could go all out and think long-term for outstanding growth, but work with what you've got.
  • Where's my target audience leading me? You've done your audience and competitor research to define the target audience. Your goals must reflect what you learned about where they are, how they make decisions, and the buyer's journey.
  • What can I track and measure? Consider how you'll measure if, where, when, and how your demand generation strategy and/or implementation is working. Do you have the technology you need to do that? What do you need to set up to ensure you can consistently, reliably, and confidently track performance?

Develop a Content Strategy

An MIT study found that 66% of marketers at top companies say businesses must focus on end-to-end customer experience and journeys to succeed.

You must target the whole buyer's journey across important channels to earn the benefits of Demand Gen. First, ask yourself where you need to have content.

  • Facebook ads and organic
  • LinkedIn ads and organic
  • Search ads and organic
  • Retargeting ads (various locations)
  • Email
  • Website
  • Downloadables
  • Account Based Marketing
  • Sales enablement
  • Publisher Direct
  • Mobile-first

A full-funnel Omni channel experience is critical for SaaS companies. If you're not currently full-funnel or omnichannel, this may seem like an overwhelming number of places to engage in demand generation.

So, I want to communicate that the right content strategy optimizes the content creation process to make this achievable.

Next, you must ensure you're creating content for the entire funnel. As a general rule, when people are non-aware, they need blog posts, videos, user-generated content, and ads that introduce them to the problem.

When they are solution-aware, they need demos and free trials to help them decide to buy your solution.

Nurture Leads

Your content strategy includes a clear path and method to not only generate demand but capture demand so you can turn MQL into SQL during mid-buyer's journey.

This is the time to build a stronger relationship with the prospect. Email is a great way to do this because you have greater control over the cadence and order of marketing messages.

Here, your strategy should address how you'll align marketing, sales, and service. Misalignment among these three cost SaaS companies money through customer and employee churn as well as lost productivity.

They must be united through definitions, purpose, communication, and technology. For example, use lead scoring automation to Speed the Lead to Sales at precisely the right time.

Track, Measure, and Optimize

You must make sure you can see the full impact of your marketing, sales, and service alignment, automation, and demand generation strategy. You need to know how your audience experiences your full-funnel, omnichannel experience.

Clear and reliable revenue attribution and reporting are essential to achieve this.

This not only proves ROI. It helps you identify gaps in the whole funnel, omnichannel experience. You can then eliminate what's not working and double down on what is to grow.

Matter Made helps B2B SaaS businesses grow. We help you create and implement a Demand Gen strategy to attract and convert more ideal customers and grow your business. Let's talk about generating demand for your B2B SaaS.

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