What is demand generation vs lead generation?

read

by rob

In the world of new business, in which we at Alchemis embrace with the same kind of tenacious enthusiasm as Erling Haaland when he has the chance to pop in the odd goal or two for Man City, we hear the word “lead generation” bandied about every day.

However, “demand generation” is far less likely to be used with the same kind of frequency… but in actual fact a very significant part of our offer is exactly that.

So what’s the difference between them? Let’s break it down into a few key areas.

Objectives
Lead generation is fundamentally concerned with capturing and qualifying potential buyers of your product or service. This would involve identifying the prospects who have expressed some kind of interest, qualifying them as to their suitability (who, in the case of the clients we work for, would likely be marketing decision makers with significant budgets to spend) and then nurturing them through the sales funnel to the point that our clients would be pitching for their business.

Demand generation, on the other hand, creates awareness and interest in your product or service among a wider audience. You may build a large pool of potential customers who may not be actively looking to make a purchase now but could become interested in the future. This in effect is a by-product of the Alchemis process. Not everyone will be in a position to take your services right now (realistically most won’t) but demand generation is more about creating a perceived need or at least further interest for the future.

Tactics
Traditionally, lead generation tactics may be more focused on capturing contact information. This may involve things like email sign-up forms, contact forms, or requesting a quote. Ultimately, from an Alchemis point of view, it would involve the prospect having a face to face meeting (whether on-line or in person) with our client to discuss a specific business need.

Demand generation may involve thought leadership content, brand awareness campaigns, engagement through social media and various other channels that will pique interest. In the case of how we operate, Alchemis will be speaking to a whole range of prospects on behalf of our clients. This will involve conveying our clients’ offers, discussing relevant case studies, etc, etc. In effect this is creating brand awareness for our clients with a pool of potential future customers.

Timing and Measurement
Whilst demand generation operates along a much longer timeline rather than leading to immediate conversions, it will lead to increased recognition of the client’s name, their abilities, previous work and a steady growth of prospects. The bigger the relevant prospect pool, the greater the chance of winning new business from them as a campaign develops, providing you are following a robust contact management strategy.

Lead generation would usually be considered to have a shorter timeline in the sales process, given that you know the potential customers have already expressed an interest. There will be a focus on the quality of the leads generated along with the conversion rates. In the case of our clients, who will be selling marketing services costing a significant amount, there would also be an expectation to follow up the pitches that didn’t lead to a new business win to find out what the deciding factors were in that decision.

In summary…

Both demand generation and lead generation often work together as part of a comprehensive marketing strategy. Demand generation activities create awareness and interest, which will feed into lead generation efforts. Lead generation activities identify and qualify potential customers for the sales team to engage with. Both are key factors for new business growth.

If you would like to find out about how Alchemis can help you with any aspect of your business development ambitions, please contact us.