Lead generation vs demand generation header image

Demand Generation vs Lead Generation — What You Need To Know

09 February 2022 by

Are your tired lead generation tactics just not cutting it anymore? 

If you're struggling to scale your business, it might be time to switch it up. 

Instead of focusing on generating more leads (which may or may not actually convert), it's time to focus on generating demand first. 

Here's what I mean: 

Say you're going to the grocery store after work. You're already hungry but aren't sure what you want for dinner. On the subway ride in, you see a video ad for juicy fried chicken. Now, you're in the mood for fried chicken — they've created demand. 

Not all of us sell delicious fried chicken but, luckily, this strategy works for other industries, including software companies. 

Successful demand generation focuses on increasing the quality of leads by creating a demand for your product or service before pushing them to buy. 

And it's particularly effective in B2B. We know because we've used it ourselves to drive real results at Leadfeeder. 

Note: Leadfeeder uncovers hidden site visitors so you can track sales and marketing efforts more effectively. Learn more about how we work or try us free for 14 days

What is B2B demand generation marketing?

Demand generation is a marketing approach that creates a demand for a product or service before gathering leads or pushing for conversion.  

When it's effective, it generates brand awareness and drives traffic to your website. 

It is ideal for businesses with a new or less-known offering — especially those in the B2B sectors — but any organization looking to expand its pool of potential customers can leverage this strategy.

It might sound a lot like brand awareness, but there is a key difference. 

Demand generation marketing doesn't focus on your brand as a whole. Rather, it focuses on educating potential customers about their problems and possible solutions. 

Demand generation is a process, not a one-step strategy. The first step generates demand by informing your audience of your offering and encouraging them to learn more. 

The second step is demand capture, where you capture intent and push them to convert. 

This might sound like a strategy you're already using — good old lead generation. 

So what's the difference? 

Demand generation vs lead generation - what's the difference? 

In B2B, lead generation is all about gathering contact information from your target audience so the sales team can reach out later. 

For example, you offer an ebook on a topic your users care about and gated it. Once they've handed over their email address or phone number, they get the download. And you pass their contact info on to your sales team. 

How is lead generation different from a demand generation marketing strategy? 

Lead generation is just one step in the demand generation process. With demand generation, organizations get users excited about their offering, draw them in, and then work to push them through to conversion.

Lead gen only has one goal — gather as many contacts as possible. This can result in no leads if customers don't know you exist, or a ton of unqualified leads (no matter how hard you work to qualify them.) 

Here's the thing — the B2B buyer journey has changed dramatically in recent years. Traditional B2B marketing, sales, growth, and lead gen strategies are no longer a one-size-fits-all strategy. 

For starters, sales and marketing teams are moving closer together. That means separating steps like lead generation from the rest of the funnel are no longer effective — or needed. 

To win at B2B growth, organizations must focus on building awareness and demand, creating high-quality content that solves a problem, and getting in front of buyers on the platforms they’re engaging on—not hiding it behind lead capture forms.

Once the demand is there, take the time to understand intent signals, build a presence on high-intent channels, and engage your sales team when prospects are ready to buy.

Alon Even does a great job of defining the difference between the two in this comparison graphic.

Lead generation vs demand generation comparison chart by Alon Even

B2B demand generation tactics 

Demand generation should be a collaboration between your sales and marketing teams. 

Aligning sales and marketing creates a seamless process from awareness to closing. Involved team members from marketing may include demand generation team leads, marketing director, and marketing strategists. On the sales side, you'll likely involve sales managers and operations managers. 

So, how do you generate demand? 

Some of these tactics may be strategies you're already using. The difference with demand generation is the focus on generating demand, rather than gathering leads — that comes later.  

Create high-authority, SEO-backed content 

B2B buyers spend just 17 percent of their time meeting with potential suppliers. How do they spend the rest of their time? Mostly researching independently. 

Demand generation B2B buyer time graphic

The key to engaging with potential customers in this stage is high-authority content that’s both informative and SEO-optimized. 

Depending on your business (and industry), this might include: 

  • Blog posts 

  • Videos

  • Case studies 

  • Ebooks 

  • FAQ pages 

Remember, this content isn't gated. The demand generation stage is about generating demand, not gathering leads. 

Focus on exploring challenges users face, common problems, and offering solutions. 

Buyers in different stages of the buying funnel are attracted to different kinds of content. TOFU users are looking for content targeting informational keywords, while BOFU searchers lead towards more brand-related content like case studies or in-depth research. 

Whatever type of content you create, focus on optimizing it for SEO and making it as useful as possible. Don't push for conversions yet. 

Freemium services 

Offering a freemium product or service is one of the best ways to engage B2B buyers. 

These days, B2B purchase decisions require input from between six and ten different stakeholders. Offering a freemium service (meaning access to a limited version of your tool or product) allows stakeholders to better understand your offering and the value you provide. 

We leverage this strategy ourselves, by offering an always-free version of Leadfeeder as well as a free, two-week trial. 

Demand generation Leadfeeder freemium example

This gives users the chance to see the value we provide before they engage other stakeholders. When they can show "Hey, this platform brought us X number of leads already," it's a lot easier to convince higher-ups to invest. 

Once they start using your tool and seeing the benefits, they're likely to stick around. It can also help you better understand how your users leverage your tool. 

It's kind of like when you walk through a mall food court and the restaurants let you try their orange chicken for free, hoping you'll buy it. Except we offer software, not orange chicken. 😉

If you don't have a free software offering, create a tool that solves a major pain point. For example, an SEO company might offer a free, automated SEO audit. It's low effort for them, but provides users with a lot of value. 

Think about your target audience and their key pain points — then create a solution and give it away for free.  

Build authority by offering training 

Webinars, live events, podcasts, and videos allow you to train people on more detailed or technical tasks. 

For example, a website tracking tool (like Leadfeeder👋) might offer training on aligning sales and marketing more effectively. 

Aligning these two teams is a key pain point for our customers, so helping them solve this challenge is a good way to get noticed. 

Demand generation offer training Leadfeeder example

This type of training establishes your authority and value before users ever have to make a purchase. Offering value for free builds trust. 

Training doesn't have to be related to your specific product or service quite yet. (Though it can be used for demand capture as well.) Instead, focus on solving a problem your prospective customers face. 

If you aren't sure what topics to cover, ask them! 

Use a poll on Twitter or LinkedIn to find a pain point. 

If a team member is knowledgeable about the topic, have them host a webinar, video, or podcast. If not, partner with another organization to host a training. 

Focus on LinkedIn 

With more than 800 million members, LinkedIn is one of the most effective platforms for B2B marketing. It's also ideal for demand generation. 

Start by building trust on the platform by sharing your SEO-driven content, training, and free tools — but don't only push your own resources. 

Join groups related to your industry, answer questions, and provide insight where you can. Social selling strategies, like optimizing your profile and engaging in conversations, are a good place to start. 

Pay attention to what content users share, challenges they face, and interests you have in common. As you build relationships and get to know your audience better, you'll be in a better position to capture leads using paid ads or other demand capture strategies. 

LinkedIn actually offers a demand generation guide to help you leverage the platform effectively.

Leverage account-based marketing 

Account-based marketing and demand generation go hand-in-hand. This strategy targets very specific accounts, making it easier to focus on generating demand with decision-makers. 

Start by building a target account list. If you do this right, generating demand should be a pretty simple process. Use intent-based data to ensure you target accounts that are a good fit for your business. 

Then target those accounts with SEO-backed content, training, and other useful content to generate demand. Personalize your outreach by addressing specific pain points they have. Consider using dynamic content to create a more personalized experience. 

I also recommend using a tool like Leadfeeder to track their actions on your website so you can see which content is most effective.

Once an account engages with your content, move on to capturing their contact information with the tactics mentioned in the next section. 

B2B demand capture tactics

Once you've created demand using the strategies in the previous section, it's time to turn that demand into paying customers. The key is to focus on high-intent signals and channels, not just gathering as many leads as possible. 

Identify high-intent customers using tools like Leadfeeder 

Website tracking tools like Leadfeeder use IP and domain information to track what companies visit your site. For example, you can see that someone from Microsoft visited your website, including what pages they viewed, how long they stayed on each page, and their exit page. 

But, we don't just hand over a huge list and leave you to sort through the data. 

Leadfeeder's custom feeds and filters help you zero in on high intent leads, such as those who have visited your website five or six times, read your blog, and then visited your pricing page — or whatever behavior you consider high-intent. 

Demand generation Leadfeeder filters

Define what high-intent means for your business, then use a custom feed to send those leads directly to your Slack channel, get an email notification, or even create an account in your CRM and assign it to the right salesperson. 

Host in-depth webinars or training that requires registration 

I know we covered offering training in the first section — it is a solid strategy for generating demand. However, it can also help capture demand depending on what topics you cover. 

For example, you might use demand generation to share seven ways to get more customers. That establishes your value and, well, generates demand for your offering. 

In the demand capture stage, you'll want to be a bit more in-depth and product-focused. For example, you might host a webinar to train users on a new feature, offer an in-depth demo, or walk them through complicated processes. 

Asking users to sign up or register allows you to gather more information you can later use to reach out, retarget ads, or otherwise nurture them. 

Use niche targeting for paid ads 

Paid ads are incredibly effective for demand capture. Awareness can also mean a lower CPC, which is awesome. 

At this stage, users already know who you are, what you offer, and have a solid understanding of the value you deliver. 

Leverage paid ads to show up at the top of search results, above organic results. The purpose here is to get attention from users who already know about your offering and have engaged with you in the demand generation stage. 

By narrowing your focus (and targeting) to users already familiar with your brand, you'll spend less on paid ads and enjoy a higher conversion rate. 

The key here is targeting. 

Use niche targeting to get your potential audience down to a much smaller than average size. 

Remember, the goal isn't to cast a wide net; rather you're looking to engage users who are aware of your brand. 

Your exact targeting parameters will vary, of course. 

Consider uploading a target email list to Google Ads and target users who engage with you on other platforms, like social or email. If you don't have access to this, use interests, location, and other targeting options to create a smaller target list. 

Google offers targeting automation features that may be useful here.   

Engage users on review websites 

Users on review sites are generally BOFU. They're comparing their options and making the final purchase decision. 

The demand has been generated, so now it's your time to shine. 

Take the time to optimize your listing on review sites like Google, Yelp, G2, Capterra, SaaS Genius, etc. 

Make sure your pricing is correct and your features are well-represented and easy to understand. 

Then, head to the comments section. If there are positive reviews, thank users for engaging. If you have negative reviews, take the time to respond, ask clarifying questions, and offer a solution. 

Demand Generation review site responses screenshot

Demand generation metrics to track your success 

Demand generation shifts the entire sales and marketing strategy — which means you can't keep tracking the same old metrics. 

To tell how effective your efforts really are, focus on sourced pipeline. 

For example, your overall close rate isn't going to tell you much. Hopefully, it tells you closes are going up, but you need to dig deeper to understand what, exactly, is driving that increase. 

Rather than tracking overall metrics, track these five metrics for your BOFU demand capture channels:

  1. Close rate per channel: Close rate is a broader metric, but it can be more useful when tracked per channel or platform.  

  2. Cost per acquisition: This is one of the most important metrics for demand generation. Engagement and close rates are all fine and good, but make sure to track how much each acquisition is costs on each channel as well. 

  3. Cost per lead: Track your overall spend per lead to calculate how much you'll need to invest to scale your efforts. 

  4. Engagement rates: A slightly softer metric (you'll have to determine what you consider engagement), however, it's helpful to see how effective your demand generation strategies are.  

  5. Customer lifetime value: CLV tracks the average profit you earn for each customer. Aim to track this for each channel to better understand where to focus your efforts and budget. 

Demand generation is the key to B2B success 

A strong demand generation strategy helps B2B organizations capture the attention of new leads, create excitement around their offering, and drive user engagement. This approach focuses more on building a relationship, rather than dangling carrots in front of leads and hoping they bite. 

Demand generation can drastically increase the number and quality of your leads, so look for ways to automate the process where possible. This will make it easier to handle the flood of leads so you can close more deals.  Note: Leadfeeder is a demand generation tool that helps B2B businesses find and track high-intent site visitors. Sign up for a free two-week trial today.

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