Demand Generation vs Lead Generation vs Inbound Marketing: Know the Real Deal

If you are into B2B marketing and haven’t heard of the terms demand generation, lead generation, and inbound marketing, what are you doing? These three terms are the A1 starter pack for every marketer. But, many people confuse these terms with each other. Therefore, demand generation vs lead generation vs inbound marketing is a concept that requires clarity. And we’re here to help you.

Now, there’s no doubt that all these processes have the same objectives ultimately. But, that doesn’t mean the journey is alike. Using these terms interchangeably means you aren’t really focusing on your strategies. Demand generation is the bigger umbrella under which lead generation and inbound marketing take space. How? We’ll tell you everything through this blog.

What Is Demand Generation?

Before we move on to the difference between lead generation and demand generation, let’s learn what these terms actually mean. Here’s the demand generation definition:

“Demand generation refers to any marketing activity that involves technology to generate awareness and induce interest in your products and services.”

Demand generation is all about adding value to the customers so that they show interest in your products and services. Every stage of the marketing funnel includes some kind of demand generation strategy. Basically, no marketing process is ever possible without a demand generation campaign.

What Is Lead Generation?

Starting with the lead generation definition:

“Lead generation is the process of identifying, attracting, and acquiring prospects’ interest and contact information through outbound and inbound marketing channels.”

Lead generation aims at getting concrete data from your prospective customers so that you can nurture your leads further or run a retargeting campaign. Statistics say that 61% of marketers agree that high-quality lead generation is one of their biggest challenges. Well, there’s a solution to that too. Interactive content! 

You might be thinking: how to generate leads through interactive content? If a prospect went through your entire quiz or calculator to reach the end, they are probably eager to see the results and won’t mind sharing a name and email address in return. This is because interactive content offers value and satisfaction.

Check out this lead generation course we created and ace your lead generation game!

Demand Generation vs Lead Generation

When one looks at traditional lead generation, it might seem a lot like demand generation. 

So, let’s drop the truth bomb! 

Demand generation aims at creating interest and lead generation targets converting that interest into something more material. 

Demand generation is a long-term strategy covering all stages of the buyer’s journey from awareness and consideration to research and justification. And, lead generation is like a subcategory of demand generation with a narrower focus. It converts the generated demand into leads, which are further transformed into sales. 

Source: Drift

The most important difference between the two is whether or not the campaign aims at collecting the contact information. Demand generation focuses on the awareness aspect of a marketing campaign and lead generation aims at getting something tangible. With the former, you need to remove the friction that restricts the audience from using your content. And, with the latter, that friction acts as a filter where your prospects turn into leads.

It’s important to align your B2B demand generation strategy with your lead generation tactics. Your entire marketing plan should focus on improving not only your lead generation results but also your demand game. An effective marketing strategy is one that focuses on both demand and lead generation.

What Is Inbound Marketing?

Again, you know what we are gonna start with – inbound marketing definition!

“Inbound marketing is a methodology that is designed to attract visitors and potential customers to your business.”

Inbound marketing is all about understanding the customer and making them understand you. It talks “to” the customers instead of talking “at” them. Your inbound marketing strategy should target converting strangers into customers and brand advocates by delivering the right content in the right place at the right time.

Your content should align with your overall business goal. The ultimate goal of inbound marketing is to create relevant content.

Look at this ecommerce recommendation for example. It asks the users questions about their needs and gives the right skincare recommendations. This way, the user feels valued as they see content that they want to see and derive instant value out of it.

Demand Generation vs Inbound Marketing

Just because both demand generation and inbound marketing intend to increase awareness, it doesn’t mean that they are the same. They are similar; but, mixing the two up with each other isn’t a great idea. It’s important to remember that inbound marketing is just one method of enabling the demand generation strategy.

Inbound marketing is the process of generating awareness through relevant content. Hence, it is just one of the many demand generation strategies. 

Lead Generation and Inbound Marketing as Methods of Demand Generation

We hope that now you are clear with the concept of demand generation vs lead generation vs inbound marketing. It’s important to note that demand generation as an umbrella term includes concepts like inbound marketing and lead generation. 

Demand generation is a function that generates awareness by subsequently creating relevant content that generates leads. Yep, you got it right. We sneaked lead generation and inbound marketing in there. 

When we think of demand generation, we think of the various stages of the marketing funnel. It goes from visits to leads to paid customers. And, while the element of lead generation is evident, let’s reiterate it. When the visits start showing interest and give out their contact details, they turn into leads. 

And, inbound marketing is a method through which we aim to make the entire demand generation campaign a success. Every step of the demand generation funnel involves some kind of inbound marketing strategy. But, it’s important to note that demand generation involves other strategies like outbound marketing and account-based marketing too. 

Example

In order to generate awareness about your services, you can start with a SaaS assessment quiz like this. It can be used by a SaaS company to reach out to prospective customers at an early stage.

And, once the interest or demand has been generated, it’s time to get something actionable. Yep, we are talking about leads. And, in order to get some leads, it’s important to offer personalization. 

Now, ROI calculators are a great way to attract leads as you are telling them how you can help them. We use this ROI calculator to help our prospects determine their return from using Outgrow even before they signup. We get leads because we give them the real deal. 

And, since inbound marketing is an ongoing process, it’s important that you create content that adds value to your prospective customers. Look at this SEO assessment for example. A marketing consultancy can use this to test their audience’s knowledge and then offer relevant solutions.

Both inbound marketing and lead generation are two methods of demand generation and it’s important to perform every activity in the process perfectly to make the entire demand process quick and fruitful. 

Conclusion

Well, now that you understand the battle of demand generation vs lead generation vs inbound marketing, we hope that you also understand the relevance of all three. While there’s a difference between them, there’s also a very important relationship. In fact, these concepts co-exist in the B2B marketing plan. B2B demand generation is only successful when B2B lead generation takes place and good content is generated through B2B inbound marketing.

And, the best part – you can perfect all these at one stop: OUTGROW! Start your free trial now and create super engaging quizzes and calculators for all three processes without any coding!