057. Lead Generation vs. Demand Generation: An Overview

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Welcome to this episode of boundify's Demand Gen Studio. My name is Miranda Jenkins and I am the newest Bound if I employee and will be taking over as the host for Demand Gen Studio. And I'm joined with Emilio, our CEO of boundify.

Miranda, how are you?

Good. Today we are going to be discussing lead generation versus demand generation. And so we're going to be talking through the difference between the two and how both impact B2B marketing success. To get us started, we'll go ahead and kick off just talking through what the definition of lead generation is. So, Amelia, do you want to kind of walk us through lead generation and some of the goals?

Yeah, sure. First of all, very excited about this topic. I we have talked among ourselves how this, this episode is the first in a series of episodes that, where we were covering about demand generation. And it's inspired by a, by a tool called Cognizant. If I'm not mistaken, it's a sales enablement, sales intelligence tool. And they have come up with a very nice, they call it Playbook where you can get a very good idea about how you will set up a demand generation program if you were a B2B marketer that are in charge of deploying that for your company. And so I think there's a ton of resources out there that explain what demand generation is and an idea of what they are. But I haven't found yet something as well explained as what they have done. So it is so good that, you know, I will take the liberty of, you know, unpacking some of those chapters in conversations with, with you, Miranda. And this is the first one for sure. And obviously the first question, as you were saying, is, well, how do we compare demand generation to lead gen? And I like, I like that concept because for me, lead generation came up into the marketing world out of a need. And the need is that digital channels, especially websites, have something that real physical stores don't have, which is a person can visit your store and then you are immediately able to see them and get a sense of who they are and what they might need. Right. If I'm going to put a simple example. You go to a, to a gym or you go to a activity store or location and if you are the host there, you will immediately know, is this a person that works for me or that is a client or is a prospect? And obviously you want to be intrusive, but you will say, hi, right? How can I help you? If it's a clothing store, you will guide into the right section all those things. So all of those things that you can do physically, you can't do on a website, right? Because the visitor, until they, they consent for tracking and being part of your database, you don't know who they are. And you cannot guide them or help them out discovering what parts of, in this case your website will be more appropriate for them. So this is a very simple example of lead generation for me came up to be because we lack information about the people that is visiting our website. So the goal of lead generation is first, to surface who are those visitors, second, obtain permission to start a conversation. And typically that conversation obviously happens over email at least, right? It can be sometimes messages, but typically it's email. And so all the whole point of lead generation is to bring up that. Now it has kind of degenerated into tactics that are not very healthy, right? Like trying to get that lead, but by, by any means possible, offering very little value to then try to hammer them with a ton of emails. And that's what it calls a numbers game. And that's what is. Have got a lot of bad rep, if you want to call it that way. But in a sense that for me, what lead generation is, right? Surfacing those visitors that have some intent, hopefully to your website.

And then conversely, how would you define what demand generation is?

Yeah, and also that one is a controversial one, at least in LinkedIn because there is a group of people, and I agree with them, that say, you know, demand generation is just. You are putting a new ski on a, I don't know what is to say an old cat or something like that, right? You are just renaming, reusing words that already exist out there. And it's true. My argument for that is that we do that all the time, right? If we, if we weren't doing. And it's not just marketers, everyone does that. If that was not the case, languages wouldn't evolve. Like we come up with new words that have a slightly different meaning than the ones that we have used in the past and they stick if the reason for the name changing is positive, right? If, if they don't, they disappears or get out of use. So I think demand generation is a little bit of that. And again, the sources are digital. It's not new in the sense that instead of focusing on getting tons of leads that you don't know if they have intent or not, because the methods that you use are questionable, you focus more on. Even if I don't know who you are, I want to make sure that if you are the right Person, the right buyer, you know about the problems that we solve, why are we better? What makes us different and help out the conversation with the prospect. But is more importantly, because you have digital channels nowadays and attribution, you can to some extent follow up the impact that all that brand awareness, which is where have had on the, on the prospect up to the point of purchase, which is for me the part that makes it different. Maybe the name the mayor generation is a little bit misleading because you are making the assumption that you can actually create demand for something and is marketers magically influencing buyers. But the reason I think why you need a different word is because you can tie this information of the brand awareness to the CRM data and to the businesses. Something that was not as easy or as potentially possible as in the past. So for me the generation is all about that. Right. How do you combine brand awareness, intent and the CRM data and align with sales so you can move forward deals is has more commercial intent. Right. So that will be kind of like a definition for that.

I've heard the analogy for lead generation and demand generation. Like demand generation, if you're familiar with the word chum in deep sea fishing.

Yeah.

The chum block is essentially like a frozen block of tiny chopped up pieces of fish. And the deep sea fishermen will throw the block into the water to start creating that demand, that attracting the fish. And then lead generation could be like the fishing net. When you get all of the fish attracted to your boat, then your lead generation efforts is actually throwing in the net and collecting those fish.

Yeah. And I, I love it because it's true the part where people maybe fight over is that well, if the fish is not hungry, it doesn't matter how many chum blocks you drop in the water. It's true, it's true. You cannot create. Well in, in theory you can create hunger on fish. But, but if you have the chum fish will come.

Right.

So if the need is out there and you offer something and if you sell, say go outside and go tell to the market, I have a solution for this. People to some, to some extent will come. So yes, I love that, that definition. Yeah.

So let's go ahead and talk through how the comparison between demand gen and lead gen and kind of talk through the differences in what stage the buyer is in and kind of talk us through that, that sales funnel again.

Yeah, to some extent and maybe I'm, I'm going ahead here of the topics, but to some extent you can say that legion is part of demand generation to Some extent. Because if you are doing a great job at demand generation, at creating awareness or increasing the awareness of your company, in theory what should happen is that then you have visitors and typically you will have some lead gen programs in place to capture that intent and get leads or at least get conversations going with demos and similar things so they, they work together in that sense. But again the differences are, or the way that I can see it is that for the main generation you can influence the buyer even if you don't know who they are. Or if you know who they are, you don't necessarily need to know who they are to for them to exchange information with you to have an impact. Like you will do an advertising on social media if you select the right ICP and the right buyers, the right profile for the companies and the right buyers, you can deliver your message and if they consume them, even if you don't know who they are. Exactly right. That's okay for demand generation. That's enough right metrics that you have there. You focus more of consumption, you focus more on am I targeting the right people? That when you are super focused on lead generation, that's where the trap can be, you know, like if I don't know who you are, if I don't get that email, then I discount the activity that happens on the website, right? So for example, when you have these lead gen focus, you gate a ton of content, right? You, you gauge your ebooks, you gauge your videos, you are trying to get every guide, every case study. And that's okay if your focus is learning more about your buyers and having opt in for communication later. But if your focus is more, you know, I want to be known more, then that's where your gate should move into. What if I ungate all that content or at least offer glimpses of it or provide some value about it without gating it before. And maybe the very, very valuable things are the ones that I actually gate. Some other differences that I've seen is that when you have that demand generation lens, maybe you only focus on lead generation for the very high intent prospects to manage both the volume and the quality of your leads. And so your sales team doesn't have to work a ton of volume. That will not deal business opportunities, right? So I think that's, that's the, the biggest difference, right? When you have that lead gen focus or not like you're leading with lead generation, if you want to say that what that way then you will focus a ton of activities that measure volume and activity. But when you Shift to demand generation. You care less about that and you care more about consumption. Now the way it comes back and should be measured is because you lose a ton of volume. The way he should come back and say well I'm having an impact is with those inbound requests, right? People coming in into the not only the website but phone calls, chat conversations, whatever channels you have open for people to come in that number should increase, right? So it that's the other thing that is important. I think that people that is worried to jumping into more the main chain activities worry about well how we are going to measure success, how we will know that we are having an impact beyond consumption. Because then it feels like you are just focusing on vanity metrics, likes and engagement. Well yes, it should have an impact. The impact is at the end you should have more commercial intent rise it conversations with your buyers. But that's where I want to use the word fate. But at least this idea of I know is going to work kick in. Because the lag, the time between the efforts that you're doing on demand generation and the impact that you will have will be way larger than the ones that you have for lead gen, right? Because legion you are dealing with people that is already on the website. The time between their intent and maybe fill in a form is very short. And for demand gen that can be. That can be weeks, that can be months, that can be years in some cases. I I tell to prospects that for some activities you have to behave like a farmer or a person that cares for plants. You have to believe that lemon trees give lemons. If you don't, if you don't believe that if you want to use the word believe or at least know the right that if you put that seed, water it and give it sun, it will grow and eventually give you lemons. If you don't trust on that, then you will never do it right? And for years you have nothing. But that doesn't mean that it's not working. You can see you can use all other metrics, other points of reference to know that you are making progress, that your plant is alive, that is growing, that is getting those leaves and all that. So it is analogy that I like to use that the other big difference between the management and lead gen that is the most problematic, especially not just for the marketer but for the executive team is to buy in the fact that if you are in the right places with the right potential buyers delivering what makes you difference. It's just a matter of time that people will learn about what you do and they ask for your services. And so for me that's the biggest difference or comparison that you can make.

So how would you say that demand gen strategies and your lead gen strategies, how do they work together?

Yeah, and that's where you can say well, so is one or the other. No, it's not one or the other. They definitely can work together. And for me how they work together is in that, that interface that is very specific to each business, to each company on how, how in that, how much in advance do you want to work with your prospects on their buying process, considering and this is very important, like the charm example that you gave that they're going to be different, they're going to be fish that will have different levels of hunger and you can force. That's the part where the word generation or creation I think makes a ton of problems because it's true. You cannot make if you're a fool. It doesn't matter how many chunk box boxes I throw into the water, you will not get close, right? So that happens to buyers for many, many reasons. Contracts because they have already a solution. Because the pain point is while there is not painful enough to justify the change, there's risk aversion. There are other priorities. So because of all that you have this spectrum of prospects that are very interest versus the one that are not that interest. And lead gen the work, the way that they work together is that at what point do you want to surface who that person is and at what point do you want to start engaging with them to build up that need over time until they raise their hand and say I want to talk to you. So if your company is really struggling with, you know, have a big sales team that can do a lot of things or you have a big marketing apparatus and group of people that can do a ton of lead nurturing activities, then you can use lead gen app maximum, right? Engage almost everything and get a ton of volume and try to work out those leads and be more present, right. Be more timely. On are you hungry? Which is pretty much the question that you're trying to ask. But if you are struggling with a ton of volume opportunities on sales and your marketing team is not that big anyway and you have to manage your resources to a handful of initiatives, then your lead gen engine, maybe you can dial it down and say I would just try to ask for leads at points in the funnel where there's a ton of intent, right? Using that typical top of the funnel, middle of the funnel, bottom of the funnel, maybe just Focus at the bottom of the funnel. Right. Just the commercial form. That's the leads that you get. Those are the leads that you nurture and maybe you ungate everything else, your case studies, your guides or you decide to ungate most of your guides except the ones that are truly brand new, hard to find research information and it's super valuable to your leads and show intent as well. So that's how I think they need to work together. I don't believe there's any scenario where you can just work with pure, you know, like brand awareness and never asking who you are. You at least need that for a conversation. It's helpful to have. Yeah, there are many good reasons why you want to have for the people that have shown intent or information so you can reach out and ask are you interested in our services? There's nothing wrong with that. But. But that balance I think depends on the company for the. Sure.

Yeah, I would say they definitely are complementary to one another because they one affects the other. Right? Like if your demand gen efforts are lacking then your lead gen efforts are going to suffer and conversely if your lead gen efforts are lacking then your demand gen efforts were almost in vain because you filled the funnel you got people in but then you failed to really nurture them through the funnel and turn them into valuable paying customers.

Yes, you said something that is truly important is great demand generation engines lower the cost of your lead gen efforts. Right. If you are, if you are. The best example that I have is if you have the very well tuned demand generation efforts on advertising on social media for example and especially in B2B for places like LinkedIn. Your cost of acquisition of leads on places like Google Ads will drop and the reason will be because that ad text will have a ton of brand recognition. Right. You will see that ad and says like yes, I know about this company, you will click on it and you will convert faster and those higher rates will bring in lower cost of conversion. So yes, they, they complement each other. But if you have no presence in the marketplace, even if someone is showing you 10, your lead capture efforts will be very costly because there's no trust around you. So yes, they, they complement each other very well.

So let's move forward and can you provide any actionable tips for our listeners to implement both lead gen and demand gen strategies?

Definitely, I will try to have both. Right. That will be my biggest recommendation. But if you have to really pick one, if you know I don't even have enough resources to start one initiative on demand generation and one initiative on lead gen, actually I would start with lead gen, right? There's some, there's some intent out there anyway, always are. So if you have to pick and show some action, lead gen efforts are typically easier to justify because you have that initial traction on setting up some forms on your website to entice people to convert on the points that they have. High intent, obviously your 404, let us give us a call or offer a trial or download some content. Unless you have almost zero traffic, those actions, those call to actions will yield some interest, right? The next best thing obviously is that you combine those simple actions, right? So creating call to actions at the very bottom of your funnel. So your lead gen effort should be the ones that you start with. The ones at the bottom of the funnel and on the demand generation side, definitely start engaging with, you know, your prospecting, prospect buyers in the places that they spend time. So that typically means in the digital world that you pick one social media platform that is the closest to where your buyers spend time, right? Gathering places where they, they spend time and start showing up there, start building some brand awareness. If you can get more sophisticated, of course you can always go into the paid version of it, which is more effective because you, you guarantee delivery. But if not, start organically, right? So have one channel for demand generation in one place where your buyers spend time and have one lead gen effort at the bottom of the funnel list. And from there you expand, right? You expand on the organic side with more initiative, more channels, building up subscription base and you spend on the lead gen going up the funnel as much as possible. But those are the two efforts that I will, I will definitely implement. And the last recommendation is that it doesn't matter if that lead, if you are focusing on lead gen or demand gen, find a CRM or system that is the whole version of truth, right? It's where you hold the database of not just your prospects, but your prospects, your, your current opportunities and your current customers. That is the other biggest opportunity that I see for most companies, right, that they don't have a center where you, they can, they can tell the story.

That's interesting what you said about the, the platform because if you think about it, we're all creating content in some form. And so I think it can be really powerful. If you understand the two sheets, the different strategies between demand gen and lead gen, it can help you kind of take a step back and assess the pieces of content that you're putting out or your marketing strategies as a whole and start to think, okay, what Is this piece of content saying, am I building trust? Am I sharing more about my brand and building awareness? Or am I really speaking to someone as if they know who I am, they know what I offer, they know that they have a problem that I can provide a solution to. And then it can help you make sure that that piece of content is being delivered on the correct platform where it's going to reach the person who's in the stage of their buying journey. Journey where hearing that the content you're providing is going to be the most impactful for them.

Yes, yeah, I agree. That brings awareness about the stage of the buyer and it's hard to do. I, I myself typically focus on what I want to say or what boundify to say. But truly, you want to focus on what the state of that buyer if you are providing value to them. That's very important. I, I actually just had a conversation with a prospect. We were talking about a website and they were asking questions on the sense on the area of, you know, we want someone that understand our industry so they can tell us what to say in our website. Right. We want someone that understand us. And I counter, yes, you want that, of course. Right. It's better if you have, if you work with someone that has very good understanding of your industry because they will be able to see the patterns. But at the end of the day, that company, that agency, that firm, actually have to extract what you know about your buyers, not about your company. Right. So because the website is not built for your company, it's not for the industry you are, is for the needs of the persons or the people that are going to visit it and that the agency doesn't know. You probably don't know very well, actually have to go and ask your buyers and the people that have to buy, what are they searching when they search the website? Right. Because that's, that's the thing is when you are the owner, you're thinking, well, I'm going to hire this website firm or this developer and I want to tell them all about us so they can put it on the website. And that's not the right approach. The right approach is I want someone that is capable of extracting what my buyers want to know and reflect it on our website, which is a different mindset that is hard to remember. Right. Because obviously we are very focused on ourselves. We are very focused on our companies. We want to tell a story and we forget about where we're selling to.

Yeah, definitely. All right, well, I think that is all the topics that we had to cover. So just to briefly summarize, we talked through the difference between demand gen and lead gen and what those two strategies are and then the comparison between the two, the ways that they can work together and coexist together and how they not only affect one another but can negatively or positively impact the other one. So thank you so much for your time. Emilio, do you have any last thoughts to share with our listeners?

No, just that I'm very excited to having this conversation with you. I hope that, you know, eventually we have more people than just me, you and you and we can bring in some of our, you know, audience which is B2B marketers. We'll be delighted for that. And yeah, I had a blast and we kept it below 30 minutes. That's fantastic.

Thank you. All right. Well, thank you so much for tuning in and listening and as always, subscribe and follow our podcast to hear more marketing insights.

Awesome. Thank you, Miranda.