In the B2B marketing space, the most widely used term is demand generation. However, it is often confused with lead generation and many marketers use the two terms interchangeably. Though both lead generation and demand generation are about identifying prospective buyers, they are entirely different in concept. Let’s look at these two terms closely to understand its basic differences.
Wikipedia defines demand generation as “the focus of targeted marketing programs to drive awareness and interest in a company's products and/or services” and lead generation as “the generation of consumer interest or inquiry into products or services of a business.” That is to say, demand generation is all about creating awareness among the people to generate leads while lead generation is about identifying quality leads from the customers and then converting them into sales.
Demand generation, as the name suggests, deals with generating demand or interest in the products or services among the people and thereby increasing leads. As for lead generation, it is the generation of quality leads from those interested in the products or services and then converting them into customers. Hence, lead generation is sales centric, while demand generation is marketing centric.
Demand generation is considered as a marketing activity, since it is the marketers who create a buzz in the market about the products or services and get the people interested in the offerings. Whereas lead generation is considered as a sales activity, as it is the sales team that find people who are interested in the offerings, nurture them and convert them into sales.
However, in today’s marketing scene, the adoption of marketing automation has led to the dissolution of the difference of marketing versus sales. Lead generation is today a marketing activity and a subset of demand generation. Today the marketers carry out both demand generation and lead generation, while the sales teams are concerned with lead conversions alone.
Thus, demand generation involves all processes right from initial prospecting to delivery of qualified leads to the sales team. With the entire gamut of lead qualification activities falling in the marketer’s court, marketers employ a variety of demand generation tactics to generate leads and make them sales-ready. This includes SEO, branding, advertising, PR, direct mail, blogging, search marketing, emails, newsletters, events, webinars and trade shows.
With demand generation and lead generation playing very important roles in identifying prospective customers, marketing and sales team must deploy effective marketing automation software to put their demand generation and lead generation campaigns in the fast lane.
Also read more on - Demand Generation, Lead Nurturing