Demand Generation vs Lead Generation
Demand generation vs lead generation, what’s the difference? Is there any? If you ask your local digital marketing aficionado, there’s a good chance that they’ll use the terms interchangeably. But, they shouldn’t.
Demand generation and lead generation occupy specific and important slots in your Software as a Service (SaaS) funnel and shouldn’t be overlooked in your SaaS marketing strategy. Lumping the two together can leave you with misguided campaigns and even decreased lead quality in SaaS.
We’re here to set the record straight. In this post, you’ll find out the key differences between the purposes and methods of demand and lead generation. We’ll also give you a few tips on how you can veer ahead of your competition when it comes to developing your sales funnel (spoiler alert: our Statwax data nerds can do it for you).
What Is the Difference between Demand Generation and Lead Generation?
Demand generation is growing your overall audience (people who may be receptive to your offering), and lead generation works to bring your audience closer to conversion. The difference may seem subtle, but it’s crucial.
Like all great lessons in life, let’s use a fishing metaphor to understand it a little better. Demand generation is throwing chum into the water; the fish will be attracted to the smell of something tasty, but you aren’t catching anything—yet. Lead generation is baiting your hook and casting your line; you can see what kind of fish showed up and use bait you know they can’t resist—and you intend to land some big ‘uns. Your goals for each step are different, so you take a different approach for each. You wouldn’t throw all your best nightcrawlers into the water for chum; you’d want something like raw chicken with a smell that’ll travel far and wide.
Getting back to marketing terms, here are some of the key differences between your lead and demand generation funnel, starting with more detailed definitions.
What Is Demand Generation?
Demand generation refers to marketing efforts that increase the number of people that care about the type of service you provide. Successful demand generation also attaches your brand name to this initial interest.
One phenomenal example of demand generation is the billboards of a McDonalds logo with a huge picture of a juicy burger and salty fries next to a fountain drink. Who isn’t craving a Big Mac after seeing that? Demand generation takes uninterested people and turns their attention toward your brand and service.
So, is there a difference in demand generation vs inbound marketing? Yes and no. All demand generation is inbound marketing because it encourages people to come to you to solve their problems instead of you asking them to come to you (like a cold call). However, demand generation is only the early stage of a comprehensive inbound marketing strategy.
What Is B2B Demand Generation Like for SaaS?
When working on B2B digital demand generation, your goals should be to:
- Increase brand awareness by improving your organic search results,
- Educate your audience with branded content that solves the problems they’re searching for, and
- Build trust by becoming a thought leader in your field.
In an industry as competitive and noisy as SaaS, these tactics will get eyes and ears—and hopefully wallets—interested in what you have to offer.
What Is Lead Generation?
Lead generation happens after you’ve grown demand and is the process of turning prospects into qualified leads. A qualified lead is someone who fits your customer persona and meets certain benchmarks that signify that they’re close to making a purchase and will be worth your sales team’s time. These benchmarks are different for each business and are based off of previous sales, but here are some examples of the actions that qualified leads take:
- Sign up for a free trial of your software
- Attend your webinar
- Sign up for your newsletter
- Add items to their cart on your ecommerce site
Generating leads isn’t easy, but it’s important to focus on quality over quantity when doing so. The more successful your demand generation is, the more highly qualified leads you can hope to find among them. In other words, you won’t catch any fish if you’re casting into an empty pond.
Capitalizing on High Demand with Statwax
SaaS is expected to grow into a $716 billion industry by 2028. It’s a huge pie, but there’s a lot of competition (15,000 SaaS companies in the U.S. in 2021) butting elbows for a slice. Here’s how we help our partners get theirs:
- Combining organic and paid search to introduce your brand to more people and keep them learning more
- Obsessing over data to create customer journey maps so you know when your audience members are ready to become leads and those leads are ready to become paying customers
- Implementing lead scoring methods so your sales team knows who to invest the most energy in
This all results in:
- Better leads (Generated 14.7% more marketing qualified leads for our client)
- More customers (Achieved 3.4X return on advertising spend for our client after 3 months of all-time highs in closed customers)
- Higher revenue for our clients (Raised average revenue per customer for our client by 37% to achieve a 4.27X return on total investment within the first 7 months)
Your SaaS deserves a bigger slice. Connect with us to get the most out of your marketing and sales efforts.
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