Lead generation vs demand generation: what’s the difference?

There are many useful levers to help boost the success of your business, including demand and lead generation, which both work in different ways. 

We explore what you need to know, including why you should consider using both.

What is lead generation? 

Businesses can use lead generation to encourage customers who are interested in their products and services in the hopes they’ll become paying clients. 

Financial advisory firms can use lead generation strategies, including inbound, outbound, paid third parties, referrals, direct mail, events, and brand and advertising, to produce leads. 

One of the most important parts of lead generation is understanding your target audience so you can tailor your outreach and boost your chances of converting them into paying customers. 

Some people who engage with your outreach may not be ready to use your company’s products and services. Instead, they may need nurturing to encourage them to convert, whether now or in the future.  

By implementing an effective nurture journey alongside your lead generation strategies, your business may be able to create long-term relationships that could help boost any recurring revenue.  

What are the pros and cons of lead generation? 

Using lead generation strategies for business growth has many advantages and disadvantages. 

The pros of lead generation 

• It can be inexpensive: There are plenty of lower-cost lead generation strategies to consider, including creating content optimised for SEO that answers questions from your target audience, cold calling, emailing, and referrals.

• Your company can potentially boost your sales and profits: If you can generate leads continuously, you can potentially increase your company’s revenues and profits.

• You can build your brand: Lead generation strategies can help by highlighting your expertise through your content and events. It can also potentially boost your visibility online via popular search engines such as Google.

• Your company can target specific demographics: If you understand your ‘ideal’ customer, you can use the most suitable lead generation strategy to try and engage with them and potentially turn them into paying customers. You may also be able to build up valuable data to help improve your company’s strategy or reduce costs.  

The cons of lead generation strategies 

• There’s no guarantee you will convert a lead: Whether someone is interested in your content, or you bought a lead through a lead gen site, there’s no guarantee they’ll buy your product or service.

• It’s time-consuming: While nurturing leads is essential, converting an individual into a paying customer can take time. It can also take a while to build up a content library and rank highly via Google to attract potential customers. 

• Some lead generation strategies can be expensive: One of the most expensive lead generation strategies is advertising, which can cost thousands of pounds. Another expensive option is a campaign to boost your company’s brand. While it’ll raise awareness, you might not get your return on investment. 

• The type of lead can impact your success: Leads can either be cold, warm, or hot. These markers determine how a company should engage with them. For example, a cold lead may not have interacted with your firm, while a hot lead may have asked for a meeting or a quote.  

• Data handling: If your business is collecting or using data, it must be protected in accordance with regulations such as the General Data Protection Regulation (GDPR).   

What is demand generation? 

Demand generation differs from lead generation as it focuses on increasing demand for your products and services and boosting the awareness of your brand instead of aiming to purely convert people into paying customers.  

This strategy may include a broader marketing plan, exploring different touchpoints to attract and nurture new customers, and public relations (PR) to build awareness. 

Demand generation can help generate sales by targeting your ideal demographic with unique and informative content to help educate them on relevant topics.  

As content is focused on a specific area, it’s more about engaging individuals likely to use your products and services through different channels, such as social media and influencer posts. 

You can also opt for out-of-home (OOH) marketing, such as billboards, tube ads, or digital billboards. Individuals travelling through certain areas may not be as accessible via traditional marketing, which is why it’s worth considering. 

Using other tactics, such as webinars, can be helpful in informing potential customers of your products and services or boosting brand awareness without the hard sell. 

The hope is that when an individual considers a product or service your company provides, your firm will be considered. 

What are the pros and cons of demand generation? 

There are many advantages and disadvantages of demand generation worth considering. 

The pros of demand generation 

• Your business can boost sales by attracting new customers: While lead generation focuses on converting individuals (usually with some pre-existing interest) into paying clients, demand generation explores attracting new customers.

• You can focus on building long-term brand awareness: Demand generation aims to get more people interested in your products and services, so it involves marketing towards a specific customer base and can help you become a market leader.

• You can better understand your customers: As you’ll need to have an ideal customer in mind, which involves research and data, you can understand how your products or services can help them and optimise your offering based on what you learn.

• Demand generation can help your business grow: If your company is considering expanding into new markets or countries, demand generation can help you find and market to new customers who would benefit from your products and services.  

What are the cons of demand generation? 

There are also some drawbacks worth considering. 

• It can be expensive: Some demand generation strategies can be costly, such as using PR or partnering with influencers.

• Demand generation may not guarantee results: It’s worth stressing you could spend a lot of money on a strategy, but it may not generate the results you want. For example, a brand campaign may fail to attract new customers, a social media post may not go viral and generate the anticipated buzz, or people may not be keen to share your posts.

• Demand generation can be complex and time-consuming: Building a demand generation strategy can be difficult as you’ll have to consider many channels and budgets and have an ideal customer before you even get started. It can also take time to see the benefits of your strategy pay off, and you’ll have to assess your strategy consistently.

• Data handling: If your business is collecting or using data, it must be protected in accordance with regulations such as GDPR.   

Should I use demand generation or lead generation? 

Deciding between demand generation and lead generation is tricky; both strategies support your company’s future growth. 

Demand generation helps people become aware of your business, while lead generation focuses on getting engaged individuals to buy your product or use your services. 

Whether you prioritise boosting brand awareness or focusing on converting leads into paying customers depends on the long-term goals of your company, your resources and your budget. 

Ideally, you should use both strategies to get the best results for your business.  

It’s a good idea to have a plan when using demand generation and lead generation, such as deciding what strategies to use, allocating a budget, and deciding on metrics to track performance. 

Want to work with Unbiased? 

Deciding on a strategy to help grow your business can be difficult, but there are ways to support your company’s long-term goals. 

With Unbiased, you’ll receive pre-verified leads and all the tools you need to convert them straight to your inbox. 

Let Unbiased Pro help you grow your business.