Sales are crucial to the success of any business, but understanding how to cultivate and capture interest from prospective customers and turn them into a sustainable pipeline of paying customers is the key to achieving long-term growth.
This is where demand generation and lead generation come into play. While there are some slight nuances between the two, both strategies are essential for finding customers, sustaining sales and expanding your business.
In this comprehensive guide, we delve into the differences between demand generation and lead generation, explaining how each works and how you can leverage them to drive your business forward.
- Distinct Goals and Tactics: Demand generation focuses on building long-term market interest and brand awareness through a comprehensive marketing approach, whereas lead generation is about capturing immediate interest to create a sales pipeline using targeted tactics like email marketing and landing pages.
- Strategic Integration: While demand generation and lead generation serve different purposes, they are most effective when strategically integrated. Aligning both approaches ensures a seamless transition from building market awareness to converting this interest into actionable leads, enhancing overall marketing effectiveness.
- Customisation for Financial Markets: For financial service providers, effectively employing demand generation and lead generation involves adapting these strategies to meet unique industry challenges and client expectations. This customisation ensures that marketing efforts are not only relevant but also directly address the specific pain points and aspirations of finance sector clients, leading to enhanced engagement and conversion rates.
What Is Demand Generation?
It’s helpful to start by defining exactly what demand generation is.
Demand generation is a marketing strategy focused on building awareness and interest in a company's products or services. Demand generation adopts a broad, long-term view, focused on creating new customer demand and nurturing relationships.
While there are a range of approaches to demand generation, it often includes creating and distributing valuable content to attract a wide audience base, fostering brand awareness and establishing interest in the solutions offered by the business.
Some common demand generation tactics include:
- Content marketing: Creating and distributing valuable content like blogs, eBooks, videos and infographics designed to educate and build brand awareness.
- Search Engine Optimisation (SEO): Optimising website content to rank higher in search engine results and make it easier for new audiences to discover you.
- Social media marketing: Using social media platforms to share content, engage with your target audience and build brand awareness.
- Influencer Marketing: Partnering with influencers to reach a broader audience and leverage their credibility.
- Email marketing: Email campaigns can be used to raise awareness, educate and spark interest about a product, service or solution and keep subscribers engaged.
- Video marketing: Producing and sharing videos to convey your brand message and educate your audience.
- Webinars and online events: Hosting webinars, virtual events and live streams can help you build authority and engage potential customers.
- Public Relations (PR): Using media coverage, press releases and PR campaigns to build brand awareness and credibility.
- Paid advertising: Utilising pay-per-click (PPC) ads, social media ads and display advertising to reach a wider audience.
- Content syndication: Distributing content on third-party platforms to reach a broader audience and generate new interest.
- Community building: Creating and nurturing online communities or forums to foster engagement.
Demand generation activity is typically designed to be informative, educational and engaging, and is usually focused on addressing the needs and pain points of the target audience by providing valuable insights and solutions. This approach allows you to build credibility in the eyes of your audience and establish you as a trusted company within your industry.
While it’s unlikely your audience will be purchase-ready at this stage, demand generation activity greatly increases the likelihood that a prospective customer will consider your product or service when they are.
What Is Lead Generation?
If you want the full run-down on lead generation, you can find out everything you need to know in our detailed lead generation guide. However, if you just want the basics, here’s what you need to know.
Lead generation is the process of capturing the contact information of potential customers who have shown an interest in your products or services. Lead generation adopts a more targeted, short-term view to creating a pool of prospective customers to fill out your sales pipeline and encourage to become paying customers.
While leads can be captured in a variety of ways, it typically involves offering some type of value to the target audience in exchange for their details.
Leads are often captured by using tools and techniques such as:
- Landing pages: Creating dedicated web pages with forms to capture visitor information in exchange for valuable content or offers.
- Calls-to-Action (CTAs): Using buttons or links encouraging visitors to take specific actions, such as downloading a guide or signing up for a newsletter.
- Web forms: Placing forms on websites or blogs to capture contact information from visitors.
- Gated content: Offering valuable content, such as eBooks or whitepapers, in exchange for contact information.
- Lead magnets: Providing incentives, such as free trials, discounts or exclusive content, to encourage visitors to provide their contact details.
- Email campaigns: Sending targeted emails with offers or information designed to capture more detailed lead information.
- Retargeting ads: Using ads to re-engage visitors who have previously interacted with your content but haven’t converted.
- Chatbots and live chats: Implementing chat features on the website to capture visitor information and answer queries in real-time.
- Online contests and giveaways: Running contests or giveaways that require participants to provide contact information to enter.
- Affiliate marketing: Partnering with affiliates to promote products or services in exchange for lead generation.
While you can use a variety of techniques to capture leads, it’s important to recognise that not all leads are created equal. Leads can be categorised based on their level of interest and readiness to buy.
Lead generation tactics would ideally come into play when the target audience is edging closer to being ready to purchase, but that’s not always the case.
Lead generation efforts often capture leads that may have shown some interest but aren’t ready to make a purchase. These leads may need more information or nurturing before they can be converted into paying customers. These are considered ‘cold’ leads.
‘Warm’ leads may have demonstrated a higher level of interest and may have interacted with your brand multiple times. They’re more likely to be considering a purchase, but still require some extra information or persuasion.
Then there are ‘hot’ leads. These leads are highly interested and are on the verge of making a purchase decision. They often need just a little push, such as a special offer or a personalised follow-up to convert into customers.
Your demand generation marketing tactics are often the key behind whether you’re able to capture purchase-ready hot leads, as opposed to warm or cold leads that still need some extra nurturing.
Difference Between Demand and Lead Generation
While demand generation marketing and lead generation marketing are both focused on nurturing prospective buyers to become paying customers, the key difference is when they are used within the customer journey.
Demand generation is a top-of-funnel activity, while lead generation tends to happen further down the sales funnel.
The ultimate goal of demand generation tactics is to create new demand for your product or service among your target audience, entering them into the top of your sales funnel.
In contrast, lead generation is more conversion-focused, enticing prospects who are already aware of and interested in your brand, product or service to hand over their details and move one step closer to becoming a paying customer.
Here’s a quick break down of the main differences between demand and lead generation:
Understanding these distinctions is crucial for crafting an effective end-to-end marketing strategy. By leveraging both demand generation and lead generation tactics, you can create a robust pipeline that nurtures potential customers at every stage of their journey, ultimately driving sustainable growth and long-term success for your business.
How Do You Combine Demand and Lead Generation to Form Your Marketing Strategy?
Demand generation and lead generation go hand-in-hand. While they each serve a very valuable purpose in their own right, the most effective marketing strategies use both techniques in combination with each other at various stages throughout the customer journey to create a seamless experience.
Demand generation should be used to do the initial leg work, helping to build brand awareness and trigger interest amongst a wide cohort of prospective customers. Once you’ve caught their interest, established your brand's credibility and shown them how you can solve a problem they’re facing, that’s when your lead generation techniques should kick in to encourage them to progress further along the sales funnel.
Investing in demand generation activities ultimately helps you maximise your lead generation efforts. While you can conduct demand or lead generation campaigns in isolation, you’re going to reap far greater benefits when you use both techniques in conjunction with each other.
Which Should Be Your Priority?
Ideally, both demand and lead generation should be a priority.
Consider this example: Imagine a stranger approached you in the street and asked for your contact details. Would you hand them over? Unlikely. But imagine a person you’d met a couple of times before and had a positive experience at each encounter asked for your contact details. Would you be more willing to oblige? Probably.
The same principle applies to lead generation.
The more you invest in demand generation activities, the stronger the relationship you will have established with your target audience when you inevitably ask them to give you their contact details.
By utilising a combination of demand and lead generation activities at different stages throughout the customer journey, you’ll likely achieve an improved lead quality, better conversion rates and a lower total cost of acquisition per customer.
However, you also need to consider your business's current situation. If you only have a limited budget to work with, it’s important to consider your current goals and find the right balance between building long-term brand value and driving short-term sales.
Customising for Financial Markets - How Who Needs Leads Can Help
Need to capture more leads for your financial lending business? We can help.
Who Needs Leads is Australia’s trusted finance lead generation company.
Specialising in the finance industry, we’ve used our tried and tested lead generation techniques to capture over one million leads for 100+ brokers.
Customised around your business, our personalised lead generation strategies leverage the latest trends and technologies to help you find more customers, fill out your sales pipeline and grow your business.
How do we do it?
We’ve developed and own multiple brands within the consumer auto, commercial asset and equipment, working capital and mortgage and refinance space which we advertise on Meta, TikTok, Google Ads, YouTube and natively to generate leads for our partners.
We’ve already done the leg work to establish credibility with your target audience—you just need to tell us when you want us to transition them into contact-ready leads.
Our specialised approach also ensures you’ll only receive good quality, pre-qualified leads. Utilising a multi-step questionnaire to capture multiple lead data points and filter out respondents who don’t meet your criteria, each lead is also pin-verified (using two-factor authentication) to ensure its legitimacy.
Once verified, we deliver the leads to you in real-time by your preferred method (whether that’s in a Google Sheet, email, SMS or fed directly into your CRM), with your first leads arriving in as little as 24 hours.
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