Demand generation and lead generation are not the same. We are mainly writing this so we have something to share when someone mixes them up again. In this article we break down the differences and where to use each.
Demand generation
Demand generation is all the marketing and sales tactics you use to drive brand awareness. It is how you build an audience around your solutions and present your products and services. It happens before anyone raises a hand and before they are necessarily interested in what you offer.
What it looks like in B2B SaaS: educating prospects about their pain points; removing any friction to switching so the choice is easy when they are ready; delivering value for free through ungated content to stay top of mind; attracting people to the top of the funnel that you can then convert; and driving the right type of traffic so buyers arrive educated.
Steps to plan a demand generation campaign: facilitate self-reported attribution (add a plain "how did you hear about us?" question in forms); create relevant content once your ICP and personas are validated; explore the right channels using self-reported attribution to find your ICP's watering holes; and cultivate relationships with the right cadences, focused on value rather than pitching.
Lead generation
Lead generation is collecting information about your prospects and moving them down the funnel. It is essentially everything you do once someone raises their hand and says they are interested.
What it looks like in B2B SaaS: capturing leads that are already problem-aware and shopping for solutions; running competitive research so your value propositions resonate more than your competitors', because most of these prospects are in the consideration stage; capturing enough information to move a lead forward; and targeting converting leads in the short run to drive revenue.
The main differences at a glance
Content: demand gen is ungated and high value; lead gen is gated with lead forms. Example: demand gen runs podcasts, webinars and blogs; lead gen runs outbound emails with book-a-demo CTAs. CTAs: demand gen uses "learn more"; lead gen uses "download now".
Goals: demand gen is measured on funnel impact and pipeline acceleration; lead gen on MQLs, webinar registrants and downloads. Funnel stage: demand gen sits at awareness and some consideration; lead gen at consideration and decision. Questions answered: demand gen answers "why should I change?"; lead gen answers "why now?".
Focus: demand gen builds trust and credibility; lead gen collects info for sales. Sales cycles tend to be shorter for demand gen because prospects arrive educated, and longer for lead gen. Conversion rates and average deal sizes trend the same way.
You need both
For a scalable SaaS marketing function you need both. One focuses on the low-hanging fruit; the other plants the tree. You need to pick the fruit to keep the company running, and you need to plant seeds that grow into trees that feed you later.
A word to the wise: do not let an obsession with attribution stop you running demand generation campaigns.
Frequently asked questions
What is the difference between demand generation and lead generation?
Demand generation creates awareness and trust with ungated value; lead generation captures information from people already ready to talk. You need both.
Which one has higher conversion rates?
Demand generation tends to produce higher conversion rates and larger deals because buyers arrive educated. Lead generation reaches more people who are actively shopping.
Do I need both in B2B SaaS?
Yes. Demand generation compounds over time; lead generation keeps pipeline flowing now.