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Lead generation vs. demand generation: Which is better for B2B companies?

Many B2B companies don’t do marketing. 

The marketing departments at these companies often find themselves in a sales support role — driving leads, creating decks, crafting messaging. This is an important part of marketing, but it is focused mainly on the final phase of a customer’s journey. 

Without creating demand for their company’s product or service, marketing teams get stuck on short-term tactics focused on generating leads for a finite market demand. 

Demand generation helps with positioning: the marketing department’s role, the company’s differentiators, and the category’s importance in the market. 

With demand gen comes a paradigm shift that can help organizations grow their market share by accentuating their unique points of view and differentiators (things nearly every growing company struggles to define). Demand gen works to champion a company’s category and positions that company as the leader. 

Let’s dive in to see the benefits for your company. 

The difference between demand capture and demand creation

Demand capture is targeting the people already looking for your product or service. 

You have to catch buyers at the right moment when they have demand for a new service or product. 

Demand capture tactics:

  • Outbound sales
  • Paid search
  • Account-based marketing (ABM)
  • Conversion-based paid social

Lead gen is a demand-capture strategy that optimizes for collecting a high number of contacts, accomplished through methods that include form fills, gated content, and lead contact providers. 

Marketing and sales customer-relationship management (CRM) software works great at tracking lead generation because it is further down the funnel. Salesforce, HubSpot, Pardot, and Marketo have tools to capture and measure leads to pass on to the sales team. 

Many companies over-index demand capture because it is easier to measure. But it can work against them in the wrong market conditions. Recessions are problematic for companies with a demand-capture go-to-market strategy, because demand shrinks as budgets get reined in. Without creating new demand for your product or service, the number of people in-market (existing demand) shrinks.

That’s why companies need to better balance demand capture with demand creation. 

Demand creation is a strategy to increase interest for your category or industry. 

Demand creation addresses the challenges people are having and positions your expertise or product as the solution. 

Demand creation tactics:

  • Speaking engagements
  • Webinars
  • Podcasts
  • Blogs
  • Organic social

Successful demand creation is accomplished through consistent thought leadership. The best demand gen positions competitors as inadequately addressing people’s challenges or needs. Your bold viewpoint and clear differentiator help to establish you as the leader in that category. 

If market conditions (e.g., a recession) cause the market to shrink, companies that effectively create demand for their products or services win.

Why lead gen rules the roost

The business landscape is ruled by revenue reporting at monthly, quarterly, and yearly cadences. Lead gen is far easier to report on against goals. 

# of calls > # of leads > # of convos > # of closes > $ revenue

This is a measurable equation for sales and marketing technology to report on. Yet many companies aren’t even properly looking at this funnel and conversion data. They blend all lead sources together, when in reality there are certain places and channels in which customers enter the pipeline that close at far higher rates.

It is more difficult to explain through data how a new customer attended a talk at a conference, followed the leader on LinkedIn, and read social posts for six months — all before reaching out. 

When monthly sales numbers are the most important metrics, it is difficult for marketers to focus on brand, positioning, and long-term growth strategies. 

Sales support materials such as white papers, case studies, and outreach templates become the focus of B2B marketers for a couple of reasons. First, because measuring leads against these tactics is easier, as already mentioned. 

More important, it’s the measure of success for most marketing departments. In general, marketers measure the number of leads and sales accountable for revenue. This misalignment of incentives causes marketing to focus exclusively on tactics that generate new leads that month or quarter. 

It’s possible that marketing hits its lead goal, yet sales still misses quota. In this case — which is common — marketing and sales teams are in conflict, rather than aligned. “The leads are bad!” “Why can’t you close the leads?” 

Sales teams say they want more leads, but that’s not entirely accurate. If a company has the budget, sales can gather as many leads as they want through ZoomInfo, Clearbit, D&B, or other software tools.

What sales teams really want:

  • Warm leads
  • Companies looking for their product or service
  • High demand for their product or service

Creating demand for your product or service

Creating demand begins with a distinct point of view (POV). It’s demonstrating that you deeply understand your customers’ challenges and what it takes to overcome them. 

To create a POV you need to:

  • Understand your customers
  • Create awareness for their problems
  • Illuminate the solutions available
  • Illustrate why you’re different
  • Tell stories that validate and give them reasons to believe

Creating demand is done by positioning your category as essential for the right type of person. “Cheap MP3 player” or “MP3 player with the most storage” isn’t category positioning; it’s attempting to differentiate features in a set category. “1,000 songs in your pocket” elevates the category for all music listeners. 

Even in already crowded categories, you can create demand through a unique POV. This is where branding and education come in. 

Education: a demand-gen marketer’s primary tool

B2B products and services generally are more nuanced than consumer products, requiring more education. 

Tactics such as speaking engagements, blogs, social media, and podcasts are great ways to freely — emphasis on the word “freely” — educate your audience how your product or service will help them. 

These tactics are only effective on a long-term timeline. Marketing isn’t something you just turn on and see immediate return. If your average sales cycle is six months, it might take three months before you see actionable metrics. You can count on six to 12 months minimum. 

A rough progression for demand generation may look like this:

  1. Begin creating content (one to two months)
  2. Gather qualitative feedback — getting impressions/engagement from qualified people, aka your ideal customer profile (ICP) (three months)
  3. Receive qualified opportunities, using a high-intent form (three to six months)
  4. Spend time figuring out how to scale the program to maximize (six to 12 months)
Quote about demand generation from Director of Inbound Marketing, Andrew Dutcher.

It takes time for potential buyers to become leads. They have to:

  1. Understand your category
  2. Understand the pain points you solve
  3. See those pain points in their own business
  4. Prioritize solving this problem

Your potential customers may not visit your website, so you need to educate them in places they already go. Find out which newsletters, podcasts, conferences, and websites they use to learn and keep up with their industry.  

Create content for consumption directly on these platforms instead of linking back to your website. These platforms want their users to stay there, and users want to consume content there. 

Don’t think of these platforms solely as distribution channels; each has its own style of content: 

  • Social channels
  • Slack communities
  • Facebook groups
  • Reddit
  • Content platforms (Apple and Spotify)
  • YouTube

This education and content sharing builds demand among potential customers. Once they enter the buying cycle, you will be top of mind. Only then will they visit your website, and your lead gen efforts can begin. 

The reporting and attribution trap

The famous adage “what gets measured gets managed” has become the rallying cry of digital marketers. 

Digital marketing enabled us to track to minute degrees the user’s purchase path — what ad they clicked, when they converted, time spent on page, etc. This data became a digital marketer’s north star. Software analytic platforms are notoriously biased to last click attribution, so marketers over-index on channels that “capture demand” (SEO and paid search) and under-index on channels that “create the demand” (social, podcasts, live events, community, word of mouth).

The dark funnel is a term that describes all of the tactics and tools at a demand-gen marketer’s disposal that marketing software is unable to track: 

  • CEO speaking at a conference
  • Employee posts on LinkedIn
  • Subject matter experts guest speaking on industry podcasts

Unfortunately, the best way to uncover this information is anecdotally. Add an open line item on a form fill: “Where did you hear about our company?” This provides insight into the true top of the funnel, which often gets obscured or distorted by marketing tools. 

Go forth and create demand!

Demand generation is a customer-focused strategy that builds awareness and educates the market by speaking to the 99% of the target audience that is not yet ready to buy. 

B2B buyers trust their peers most, and they often go to “dark social” for information — social media, communities, Slack, content platforms — which are difficult to attribute. You need to communicate with them where they hang out, providing them with valuable content before they are ready to commit. 

If you aren’t top of mind when they move into a buying cycle, then you are likely too late. 

Lead generation vs. demand generation: Which is better for B2B companies?

Many B2B companies don’t do marketing. 

The marketing departments at these companies often find themselves in a sales support role — driving leads, creating decks, crafting messaging. This is an important part of marketing, but it is focused mainly on the final phase of a customer’s journey. 

Without creating demand for their company’s product or service, marketing teams get stuck on short-term tactics focused on generating leads for a finite market demand. 

Demand generation helps with positioning: the marketing department’s role, the company’s differentiators, and the category’s importance in the market. 

With demand gen comes a paradigm shift that can help organizations grow their market share by accentuating their unique points of view and differentiators (things nearly every growing company struggles to define). Demand gen works to champion a company’s category and positions that company as the leader. 

Let’s dive in to see the benefits for your company. 

The difference between demand capture and demand creation

Demand capture is targeting the people already looking for your product or service. 

You have to catch buyers at the right moment when they have demand for a new service or product. 

Demand capture tactics:

  • Outbound sales
  • Paid search
  • Account-based marketing (ABM)
  • Conversion-based paid social

Lead gen is a demand-capture strategy that optimizes for collecting a high number of contacts, accomplished through methods that include form fills, gated content, and lead contact providers. 

Marketing and sales customer-relationship management (CRM) software works great at tracking lead generation because it is further down the funnel. Salesforce, HubSpot, Pardot, and Marketo have tools to capture and measure leads to pass on to the sales team. 

Many companies over-index demand capture because it is easier to measure. But it can work against them in the wrong market conditions. Recessions are problematic for companies with a demand-capture go-to-market strategy, because demand shrinks as budgets get reined in. Without creating new demand for your product or service, the number of people in-market (existing demand) shrinks.

That’s why companies need to better balance demand capture with demand creation. 

Demand creation is a strategy to increase interest for your category or industry. 

Demand creation addresses the challenges people are having and positions your expertise or product as the solution. 

Demand creation tactics:

  • Speaking engagements
  • Webinars
  • Podcasts
  • Blogs
  • Organic social

Successful demand creation is accomplished through consistent thought leadership. The best demand gen positions competitors as inadequately addressing people’s challenges or needs. Your bold viewpoint and clear differentiator help to establish you as the leader in that category. 

If market conditions (e.g., a recession) cause the market to shrink, companies that effectively create demand for their products or services win.

Why lead gen rules the roost

The business landscape is ruled by revenue reporting at monthly, quarterly, and yearly cadences. Lead gen is far easier to report on against goals. 

# of calls > # of leads > # of convos > # of closes > $ revenue

This is a measurable equation for sales and marketing technology to report on. Yet many companies aren’t even properly looking at this funnel and conversion data. They blend all lead sources together, when in reality there are certain places and channels in which customers enter the pipeline that close at far higher rates.

It is more difficult to explain through data how a new customer attended a talk at a conference, followed the leader on LinkedIn, and read social posts for six months — all before reaching out. 

When monthly sales numbers are the most important metrics, it is difficult for marketers to focus on brand, positioning, and long-term growth strategies. 

Sales support materials such as white papers, case studies, and outreach templates become the focus of B2B marketers for a couple of reasons. First, because measuring leads against these tactics is easier, as already mentioned. 

More important, it’s the measure of success for most marketing departments. In general, marketers measure the number of leads and sales accountable for revenue. This misalignment of incentives causes marketing to focus exclusively on tactics that generate new leads that month or quarter. 

It’s possible that marketing hits its lead goal, yet sales still misses quota. In this case — which is common — marketing and sales teams are in conflict, rather than aligned. “The leads are bad!” “Why can’t you close the leads?” 

Sales teams say they want more leads, but that’s not entirely accurate. If a company has the budget, sales can gather as many leads as they want through ZoomInfo, Clearbit, D&B, or other software tools.

What sales teams really want:

  • Warm leads
  • Companies looking for their product or service
  • High demand for their product or service

Creating demand for your product or service

Creating demand begins with a distinct point of view (POV). It’s demonstrating that you deeply understand your customers’ challenges and what it takes to overcome them. 

To create a POV you need to:

  • Understand your customers
  • Create awareness for their problems
  • Illuminate the solutions available
  • Illustrate why you’re different
  • Tell stories that validate and give them reasons to believe

Creating demand is done by positioning your category as essential for the right type of person. “Cheap MP3 player” or “MP3 player with the most storage” isn’t category positioning; it’s attempting to differentiate features in a set category. “1,000 songs in your pocket” elevates the category for all music listeners. 

Even in already crowded categories, you can create demand through a unique POV. This is where branding and education come in. 

Education: a demand-gen marketer’s primary tool

B2B products and services generally are more nuanced than consumer products, requiring more education. 

Tactics such as speaking engagements, blogs, social media, and podcasts are great ways to freely — emphasis on the word “freely” — educate your audience how your product or service will help them. 

These tactics are only effective on a long-term timeline. Marketing isn’t something you just turn on and see immediate return. If your average sales cycle is six months, it might take three months before you see actionable metrics. You can count on six to 12 months minimum. 

A rough progression for demand generation may look like this:

  1. Begin creating content (one to two months)
  2. Gather qualitative feedback — getting impressions/engagement from qualified people, aka your ideal customer profile (ICP) (three months)
  3. Receive qualified opportunities, using a high-intent form (three to six months)
  4. Spend time figuring out how to scale the program to maximize (six to 12 months)
Quote about demand generation from Director of Inbound Marketing, Andrew Dutcher.

It takes time for potential buyers to become leads. They have to:

  1. Understand your category
  2. Understand the pain points you solve
  3. See those pain points in their own business
  4. Prioritize solving this problem

Your potential customers may not visit your website, so you need to educate them in places they already go. Find out which newsletters, podcasts, conferences, and websites they use to learn and keep up with their industry.  

Create content for consumption directly on these platforms instead of linking back to your website. These platforms want their users to stay there, and users want to consume content there. 

Don’t think of these platforms solely as distribution channels; each has its own style of content: 

  • Social channels
  • Slack communities
  • Facebook groups
  • Reddit
  • Content platforms (Apple and Spotify)
  • YouTube

This education and content sharing builds demand among potential customers. Once they enter the buying cycle, you will be top of mind. Only then will they visit your website, and your lead gen efforts can begin. 

The reporting and attribution trap

The famous adage “what gets measured gets managed” has become the rallying cry of digital marketers. 

Digital marketing enabled us to track to minute degrees the user’s purchase path — what ad they clicked, when they converted, time spent on page, etc. This data became a digital marketer’s north star. Software analytic platforms are notoriously biased to last click attribution, so marketers over-index on channels that “capture demand” (SEO and paid search) and under-index on channels that “create the demand” (social, podcasts, live events, community, word of mouth).

The dark funnel is a term that describes all of the tactics and tools at a demand-gen marketer’s disposal that marketing software is unable to track: 

  • CEO speaking at a conference
  • Employee posts on LinkedIn
  • Subject matter experts guest speaking on industry podcasts

Unfortunately, the best way to uncover this information is anecdotally. Add an open line item on a form fill: “Where did you hear about our company?” This provides insight into the true top of the funnel, which often gets obscured or distorted by marketing tools. 

Go forth and create demand!

Demand generation is a customer-focused strategy that builds awareness and educates the market by speaking to the 99% of the target audience that is not yet ready to buy. 

B2B buyers trust their peers most, and they often go to “dark social” for information — social media, communities, Slack, content platforms — which are difficult to attribute. You need to communicate with them where they hang out, providing them with valuable content before they are ready to commit. 

If you aren’t top of mind when they move into a buying cycle, then you are likely too late. 

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