Are You Lead Gen or Demand Gen Focused?

What is the difference between lead gen and demand gen?

Lead generation is comparable to performance marketing. It's focused on the top of the funnel and short term transaction. It's not conversion rate obsessed. It doesn't prioritize marketing and sales alignment. Only about 1 in every 1000 leads convert with the lead gen model.

Demand generation is full-funnel, targeted marketing. It focuses on qualified pipeline and revenue. And you'll see about a 4-12% conversion rate when you are demand gen focused.

Many companies are not looking at the metrics to see that lead gen models are not efficient or effective.

It may be time to make the switch from lead gen to demand gen.

Benefits of Switching to Demand Gen

There are many benefits of switching your strategies to demand generation as opposed to lead generation.

Here's a list of some of the major benefits you'll see:

  • Better alignment across all teams
  • At least 4x better conversion rates
  • Better scalability with spend
  • Long-term brand building

Demand gen helps you match the way you're selling to how buyers want to buy.

Create Demand, Don't Just Capture Demand

It's important to understand that creating demand is different than just capturing demand. Many companies are only capturing demand through low intent channels.

Creating demand involves more strategy on your part. Study the data to understand the buying patterns of your customers and what people are looking for.

In order to create demand, you need to leverage high intent sources for your marketing, such as google search, lead aggregators, and review sites.

When creating demand, you need to be informing and educating people on your product. Help them understand the pain points it solves for so that when they move into the buying cycle, they already know what features you have and how it helps increase their overall revenue.

Redefine What a Lead is

It's important to note that marketing's definition of a lead may very well be far different than the sales team's definition.

You should redefine what a lead is.

In a recent episode of Digital Conversations with Billy Bateman, Chris Walker shared amazing insights on this topic. Chris stated, "someone that downloaded a piece of content is not a lead, they're a contact." And that's so true! We tend to think that every email we capture is a qualified lead, and that just isn't the case.

A lead should be defined as someone who has shown a little more interest than just downloading content.

Pitfalls of Making the Switch

We highly recommend switching from a lead gen focused strategy to a demand gen focused strategy. However, all change comes with some difficulties.

The process of making the switch with most likely fail if there is lack of executive buy-in and alignment.

This happens because most of the time people are used to focusing on the amount of MQLs. Instead, they should focus on sales qualified opportunities (SQO).

When making the switch, the number of MQLs will go down, which causes executives to worry. However, they need to realize that although that number decreases, the amount of SQOs greatly increases.

Leads do not equal revenue. Qualified sales opportunities are what lead to more revenue. It's all about your mindset. We are often too focused on lead count, but what's important is quality over quantity.

Also, if you don't have a comprehensive strategy with a solid framework, then switching to demand gen will fail.

Quick Wrap-up

In conclusion, you need to shift your focus from just the top-of-the-funnel marketing to full funnel marketing. Demand generation increases pipeline and closes more revenue than having a lead gen focus.

Many marketers simply pump more money into what they are already doing, expecting it to improve the results. However, that strategy won't work. You need to change what you're doing to achieve better results.

Remember that the buyer's journey is not always a straight shot. You need to be guiding them down your funnel by providing the information they need to see the full potential of your product and the pain points it will solve for.