The Modern Marketer’s Playbook Insights: Demand Generation vs Lead Generation

Demand generation is the process of building interest, awareness, and intent for a business via multiple touchpoints and marketing programs over a period of time. The goal of demand generation is to educate the targeted audience in order to create demand for the business.

Demand generation should not be confused with lead generation, which is identifying and nurturing potential customers who have already expressed interest in a product or service. Lead generation focuses on converting leads into customers, whereas demand generation focuses on creating demand for a business.

Both demand generation and lead generation are essential for businesses to generate new customers and grow their revenue. However, demand generation is a more holistic approach that takes into account the entire customer journey, from first becoming aware of a problem or need, to researching solutions, to making a purchase.

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By understanding the difference between demand generation and lead generation, businesses can more effectively create demand for their products or services and win new customers.

To get a better sense of what demand generation vs lead generation entails, let’s go over the most prevalent classifications of "leads".

Marketing qualified leads (MQLs): Potential customers who have expressed interest in a business in response to marketing activity. An MQL for HubSpot, the marketing automation platform, would be a marketer who has signed their business up for a free trial of the forum and wants to explore its features.

Sales qualified leads (SQLs): A subset of MQLs who have been contacted by sales and deemed likely to become customers. In order to be classified as an SQL, a lead must typically exhibit certain behaviors, such as expressing interest in learning more about your product or service.

Product qualified leads (PQLs): PQLs are leads who have used your product and shown an interest in becoming a paying customer. For example, a PQL for an eCommerce site might be someone who has added items to their shopping cart but has not yet made a purchase.

While demand generation and lead generation both ultimately aim to generate new leads for your business, they differ in terms of approach and focus. Lead generation is primarily focused on generating as many leads as possible, irrespective of quality, while demand generation takes a more holistic approach, aiming to generate higher-quality leads that are more likely to convert into paying customers. As a result, demand generation is often seen as a more complex and time-consuming process than lead generation. However, the payoff can be more significant, as demand generation leads are typically more valuable customers in the long run.