Demand generation is one of those terms that's a little too easy to ignore – and that's led to a lot of misinformation about what it really means, and how demand differs from lead generation. We don't like confusion, so let's clear it up!
Demand Generation vs. Lead Generation
First, the obvious question: What's the difference between demand and lead generation? Because they do sort of sound like the same thing. This has led to a lot of confusion: You'll see a lot of people saying that they are interchangeable terms, or claiming things that just aren't true.
Let's set the record straight. Lead generation is about identifying prospects and bringing them through the sales funnel to a sale. Easy enough, right? Demand generation is about raising long-term interest in a brand and encouraging more buyers to think about purchases. This type of generation isn't concerned as much about any particular sale or client. Instead, it looks at the big picture and the long-term sustainability of a company.
Demand and the Funnel
Okay, so how does generation built on demand relate to our good friend, the sales funnel? The answer helps clarify just what role demand plays in the process: We see this type of generation both before and above the funnel.
- Before the funnel: Here it works to create buzz and raise name recognition. The goal is to get buyers interested to notice products and services – to take their very first step into the funnel. Usually, this is more about brand than data: In other words, instead of using contact lists or cold calls, it uses content, events, contests, social media and more to build a beacon that reaches out to all potential buyers.
- Above the funnel: As buyers make their way through the funnel, demand generation isn't so much involved in each conversion as it is managing the process as a whole – like a conductor leading a symphony. Here, the goal is to impress the buyer and make sure they know about all related products and services, helping to ensure their return in the future.
Fusing Marketing and Sales
Let's look at this a different way. Lead generation is more of a sales specialization, while demand generation is more of a marketing specialization. The good news is that they're a package deal. Demand generation doesn't make much sense on its own, and lead generation is strictly short term without work in the demand area.
So, if you're still having problems with the infamous marketing/sales alignment issue, you may want to think about bringing this type of generation into the office as an important component of your sales funnel. This can encourage marketing and sales to coordinate more closely with a concept that both sides can quickly understand.
Where to Look for Demand Generation Talent
If you really want to focus on this new type of generation and alignment, then you may want to put someone in charge of it – but how do you pick a specialist in this area? It's is another important question, but it's harder to answer. We suggest taking a look at the marketing side first, since this sort of perception-oriented stuff is more in line with marketing goals. However, more important than the department is the leadership quality. As Marketing Profs puts it, "Today's demand gen manager is a shepherd whose job it is to design and build experiences that lead customers to engage more deeply with your business. Modern gen managers are masters of technology and marketing."
More briefly: You need someone who can see the big picture clearly and coordinate between others constantly to provide the optimal customer experience. If a promising employee needs to be groomed for leadership, your demand generation strategy can be a great training ground.