Too many businesses are only focused on lead generation. Last year, just in the U.S. lead generation advertising spending was around $2.6 billion. Huge, right?
But that doesn't mean that all of those who spend on it have a big ROI. In fact, a lot of them don't and that's because they don't use demand generation or they’re doing it the wrong way.
Some assume that lead and demand generation are the same thing and to others “demand generation” is vague or simply unknown.
In this post, we’ll cover the difference between these strategies and how you can use demand generation effectively.
What Is Lead Generation?
Lead generation is the process of attracting prospects to give you their personal information in exchange for something valuable.
Prospects are attracted by a lead magnet (a content offer), and they’re required to fill up a form before being able to see the content. Once this is done, they become “leads”.
What Is Demand Generation?
Demand generation is a strategy that has to be seen as a whole because it involves the use of different tactics whose primary focus is to build and increase awareness about your product or service and even about your industry.
The possibility to develop a more organic approach and to build an authentic relationship are some of the benefits you get from it.
With demand generation you're basically putting yourself in front of your target audience and kindly introducing yourself saying “Hey! I understand that your pain point is this and I have the solution, here's how I can help you” but you’re just educating them and not making a sales offer at this point because you're talking from the top of the funnel.
Choosing Between Lead Generation and Demand Generation?
Both work and can deliver great results if that’s what you’re asking yourself, but before implementing either of them you need to have your priorities clear.
One thing you should keep in mind is that lead generation may come from demand generation, but not all demand generation will have as an end goal lead generation.
How is that possible?
Well, one of the best and most used tactics of lead and demand gen is content creation and when you’re creating content it’s important that it includes a Call To Action (CTA).
If you’re focused on demand generation you will include a CTA but it won't take your audience to gated content. This means that they won't have to fill a form that collects their data to have access.
Instead, that CTA can encourage your audience to follow you on social media, read/watch more related content or take the next steps to get in touch with you.
For example, if you’re looking to expand your business to a new market, demand generation will be the best option for you.
Why? First of all, because it’s more time and cost-effective. To make that first approach you have to communicate something and you won't be able to do it without speaking the same language that your target audience. Otherwise, you’d be wasting your time and money.
Also because if you go all-in to a new market without building awareness and taking for granted that there’s already demand, then there’s a huge chance that things might not work out in the best way possible.
If you just want to get your prospects’ information to contact them later for X or Y purpose, then lead generation would be the route to go.
Tips for Using Demand Generation
To create a good demand generation strategy these are some tips you should consider:
1.Identify your ICP
That awareness you want to build depends greatly on a well-defined ideal customer profile. This is what will let you know what pain points your audience has and what are the best resources you can provide to address them.
2. Set Goals
Set short and long term goals that are aligned with your sales and marketing team and that will help you with your overall business goal, such as the revenue.
3. Create Content
Focus on quality over quantity and also make sure that you promote the content through all the channels your target audience has access to.
4. Measure Your Efforts
Keep track of all the strategies you’re using to know what performs better and what you need to improve. For this, you can do A/B testing, set KPI’s and use automation and analytics tools.
Conclusion
Demand generation allows your prospects to make the purchase decision by themselves because you’ve taken a customer-centric approach by answering freely and directly to their questions, so they get to choose if your solution is a good fit for them.
With lead generation, on the other hand, the approach is more seller-centric and prospects are more likely to feel forced or pushed to go into a sales funnel just for the fact that they gave their info in exchange for something that might not even be what they expected.
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