Lead Generation VS Demand Generation

A marketing strategy can be the difference between a successful startup and one that fails to generate enough revenue. This is why B2B marketing has become such an essential part of many startups' strategies. For decades, B2B marketing techniques relied on the same basic principles as consumer marketing. However, over the last two decades, B2B marketing has developed into its own field with distinct methods, techniques, and measures of success. The way we do business has altered dramatically throughout time, much like our society's values. When we compare the two, we discover more information about how we buy and why.

In the 1940s and '50s, after the Great Depression, consumers were more frugal with their money, so businesses resorted to more aggressive marketing and sales strategies to boost earnings. This resulted in an increase in self-promotion, intense advertising, and pushier selling methods. Fast forward six decades later, and the same hard-selling approach still exists, in the form of lead generation.

When talking about lead generation, we refer to several methods that are used sparingly across all B2B and tech verticals. Some of these methods evolve direct outreach to prospects Via LinkedIn or email; usually, a company will buy a list of targeted, niche relevant prospects from services like ZoomInfo and then release their SDRs (Sale development reps) to the races. Another famously used lead generation method is trying placing gated content behind ads that are being run on LinkedIn or Facebook. In this case, companies are offering their prospects a chance to read a valuable case study, blog post, or webinar in exchange for their contact info that usually includes an email address. Then the SDRs are off to the races again. These methods have pros and cons. On the one hand, you get email addresses or maybe phone numbers of prospects; on the other hand, they have usually filled out the lead form, only to read the valuable piece of content promised, and are not interesting in being contacted by your sales rep.

Two ways to combat this are by providing another layer for the mentioned lead generation tactics.

Instead of placing ads in front of prospects who have likely not interacted or consumed any of your companies content, you place ads only to prospects who have visited your website or consumed an ungated video or case study of yours.

Suppose you do decide to collect leads that are not in buying mode and are early in the sales process. You can, instead of automatically reaching out to them Via a sales rep, nurture them with a weekly newsletter. Make sure to provide ungated content in the newsletter. You can also create a podcast and invite them to be a guest on it. That is a budget-friendly way to have a one-on-one chat with a prospect while learning about his needs and what sort of product or service features will benefit him. Companies like Slack, General Electric, and Basecamp are all using podcasts as marketing tools.

On the other side of Lead Generation, there is Demand Generation, that in essence, is built on giving value upfront to your targeted prospects instead of having them provide an email address to access your contact.

In recent years, since data privacy regulations and data selling outrages, media users have become more aware and careful about providing info. That has led the B2B marketing industry to adjust. Gated content became ungated. And the quality of the content itself has elevated, as marketers know that they are not only competing for attention but also for credibility and influence among their ecosystem. Media coverage, public relations, thought leadership pieces, and open-source case studies are all effective ways to enhance demand generation.

What have I seen with my clients:

As I often work with series A startups, I know how impatient leadership can be with demand generation methods. "We need leads now," the CEO says, and to see sufficient results with demand generation can take up a year. With heavy product startups (semiconductor, deep tech, network), it can take even longer.

That is why I advise combining both methods in the overall marketing strategy. An example of this is how I structure my clients LinkedIn Ads campaign groups (80% of B2B leads come from LinkedIn)

Each group includes a different content offer.

Lead Generation:

*Gated ROI Guides

*Deep exclusive case studies with High profile clients

*Advanced Optimization methods

Demand Generation:

*Blogs

*Media coverage and press releases

*Podcast and Youtube videos

Remarketing

*Product demo offers

*One-on-One consulting sessions

How Do I Divide the marketing budget? Each client's needs are different. Lots of it depends on the number of resources a startup has. I usually advise placing 60 % of the budget on lead gen tactics and 40% on demand gen. If a company is able to create a high volume of relevant content, then I try to add more budget to the demand gen efforts. If I see that a company doesn't have enough resources, I try to enhance lead generation and squeeze as many market qualified leads as possible. Ideally, with a well-budgeted client, most of the marketing efforts should be in the demand generation space that includes: Public relations and ungated content. This method increases brand awareness, drives more website traffic, and expands prospects' knowledge of the startup's product and solution while enhancing credibility.

For this reason, you can see that based on HubSpot's recent "State of Marketing report." Marketers are allocating 26% of their budgets to content creation, while only a percent more (27%) on paid media. The same report also states that less than one-fifth of marketers think outbound practices provide valuable leads. Outbound practices are things like cold emails (lead gen), cold calling (lead gen), etc. According to data from Demand Metric, content marketing is three times more successful in generating leads than outbound marketing while costing 62% less. According to this finding, marketers with blogs (demand gen method) are 13 times more likely to achieve positive ROIs. This is yet another statistic that demonstrates the importance of demand generation in generating sales. It's time to establish a company blog if you don't already have one.

To summarize

The need for strong demand generation efforts is increasing. At the same time, old-school hard-selling lead generation does still has a place in optimizing urgent revenue opportunities. Combining both methods has shown to be very effective for my clients, with an emphasis on building a long-term demand generation machine.