Semantics: Lead Gen vs. Demand Gen


One of my biggest pet peeves is when people use the terms ‘demand gen’ and ‘lead gen’ interchangeably. A few years ago I was speaking with my VP of Corporate Communications about finding a vendor that could support content development for demand generation across the funnel. She started talking about a vendor she’d worked with that created great lead gen content, and I said “that’s great – we need that too, but I’m talking about demand gen” and she shrugged and said “Eh same thing – it’s all just semantics.”

I remember in that moment wanting to stop her and say “No…it’s not ‘just semantics’ the semantics are important because lead gen and demand gen are not the same thing.” I let it go, but that moment has stuck with me and any time I’m speaking about lead gen and demand gen I be sure to define what I mean and differentiate the two.

So what’s the difference?

The Content Marketing Institute does a great job of defining these two very important marketing concepts, so why reinvent the wheel? Here’s what they say:

Lead Generation
Collecting registration information, often in exchange for content, in order to build a marketing database for email or telemarketing follow-up. The direct outcome of lead generation is new contacts available for sales or marketing.

Demand Generation
The practice of creating demand for an organization’s products or services through marketing. The direct outcome is that your audience is more likely to purchase your products or services.

Bottom line:
Lead Generation is about generating new leads (duh!) Getting names of new people who have expressed some level of early interest in your company. And to be clear, buying prospect names doesn’t count (we’ll talk about leads vs. prospects in another post). You have to earn these leads. Generally they’re in the ‘awareness’ stage of the buyer journey and your content talks more about key issues/challenges/benchmarks, etc. than about your company. It’s meaty and valuable enough that people are willing to fill out a form. Of course, content isn’t the only way to generate leads. A compelling offer, a well-positioned brand message, or a booth at an industry event can also generate leads.

Demand Generation is different. Demand gen is about (gasp!) generating demand for your company’s products/services and moving your leads through the buyer journey. Depending on the nature of your business and your sales cycle, lead gen and demand can can happen simultaneously (in highly transactional situations), or they can happen over a long period of time. In longer sales cycles, demand gen requires a lot of content and a thoughtful approach to presenting that content to your audience. The what, when, who and how of your content positioning matters…a lot. 

Is lead gen important? Yes, of course! But be careful that you don’t rob Peter to pay Paul, and by that I mean: Don’t invest all of your resources into lead gen and shortchange your demand gen investment (here’s a great article on the topic). If you’re not in a highly transactional sales environment, demand gen will require more resources than lead gen. Yes, you need to feed the beast with leads, but they won’t do you any good if you can’t nurture and convert them.

Is it OK to use your customer lists for other purposes?

email Overload

Every summer I hire a company to spray my yard with poison so as to fend off mosquitoes. In the winter I don’t use this service, so imagine my surprise when I received an email from them in the middle of February. My original thought was they were offering reaaallly early bird discounts. But no, it turns out they’re hiring.

I found it very strange (and a bit annoying) that I got an email advertising job openings from my mosquito poison vendor. It turns out that my neighbor, who also uses the service, got an email as well. I think its safe to assume that they emailed their whole customer list just in case any of us were looking for a new vocation as an insect hit(wo)man. I have a point (I swear) and here it is: 

Is it OK for business to use their customer list for purposes other than communicating things related to their customer relationship? My initial reaction was: No way! That’s not cool. 

But as I think about it more I realize that in B2B we do this all the time. We might not try to recruit employees (I hope not, anyway), but we definitely seem to assume that once someone’s email address becomes known to us, it’s fair game for whatever we want to bombard their inbox with.

Think about it. What do our customer get from us?

  • Welcome to our customer community
  • Pay your bill
  • Get to know your account manager
  • Your account manager has changed
  • Your customer newsletter
  • Your industry newsletter
  • Do you want to renew your service?
  • Do you want to buy more services from us?
  • Do you have anyone you want to refer to us (for rewards, of course)?
  • Are you willing to give us a reference?
  • Read our blog
  • Read our whitepaper
  • Attend our webinar
  • Attend our event
  • Are you going to the XXX Industry event? If so, visit our booth!
  • Are you satisfied with your service? Take our survey!
  • We have a new service – read all about it. Want to buy it?
  • We just released a new press release about ourselves. Want to read it?

…and I’m sure that list goes on.

How do we ensure that our customers get the information they need from us and want from us. And not the stuff they don’t need or want. We think all the stuff above is important. But is one more important than the other? How do we make sure the important things don’t get lost in the less important things? Do we need to say everything to everyone?

I have many more questions than answers. I don’t think there is one right answer, but I do think that the customer experience matters above all. Marketers – focus first on delivering a fantastic customer experience, and secondly on all that other shit. We all have goals to reach, but none of them matter without the customer, so find a way to put them first.

Why sales should give a crap about what marketing is doing

Let’s keep going on the theme of marketing and sales alignment. Last week someone told me that sales doesn’t care what marketing is doing, and expecting them to take time to look at marketing activities on a lead record is ridiculous, because they won’t do it. I call B.S. on that, and refuse to accept it. While that may be true in some sales organizations, it’s not right. In fact, it’s madness. Utter madness!

First, I want to establish 2 baseline assumptions. For the sake of the following post assume that:

  1. Marketing has done its job and has implemented a Marketing Automation Platform (MAP) that thoroughly integrates with you CRM and is publishing marketing interaction information to the lead records in the CRM
  2. Sales people are sane, rational and logical

Now, I’d like to set the stage with some interesting numbers:

~ 4 ~

The average number of marketing campaigns B2B companies report a lead responds to before a deal closes (Insight Squared)

~ 7 ~

The minimum number of interactions the average B2B lead has with a brand before they are ready to talk to a sales person (Online Marketing Institute)

~ 38 ~

The win rate increase reported by organizations that have focused on tightly aligning their sales and marketing teams (SAP)

~ 50 ~

The percent of time B2B sales people waste on unproductive prospecting (SAP) AND the percent of B2B sales people that miss their quota (Marketo)

~ 70 ~

The percent of the purchase cycle that’s complete before a lead is ready to talk to sales (Forbes)

~ 95 ~

The percent of B2B buyers that downloaded a piece of thought-leadership content from the vendor they ultimately chose (SAP)

Because you’re a smart, well-read person of business, most of these insights should be familiar to you. After all, I haven’t exactly chosen an original topic. But I’m going to belabor the point because it’s an important one. Armed with all of this info, I hope it is clear to you that for sales to ignore the insights into what leads are doing before they get them on the phone would be utter insanity.

Did you not immediately jump to that obvious and rational conclusion? If not <<face palm>> read on…

You’re welcome.

Once upon a time there were 2 (beautiful) leads: Joe Blow and Jon Doe

Joe Blow is the kind of lead we dream of. He heard great things about your business from a friend and it just so happened he was in the market for exactly your solution and he needed it fast.  So Joe went to your website and submitted a ‘contact sales’ form. In that form, he submitted comments that outlined who referred him, what he wanted, and his timeline to buy.

Awesome, right? Totally! When sales calls Joe, would they want to say “Hi Joe, I understand you wanted to talk to a sales person, how can I help?” or would they want to be ready with a quote and proposal for how they can help address his specific need immediately? The latter, I would hope. Arming sales with even that small nugget of info can help them have an informed conversation that will get them off on the right foot and both Joe and sales would live happily ever after.

Jon Doe, on the other hand, is not so sure what he wants. He finds your company as he’s doing some research on possible solutions to his widget challenge. He has 7 magical interactions with your company: 1) Visits your website; 2) Downloads a white paper; 3) Receives an email; 4) Opens an email; 5) Clicks through the email; 6) Visits your website again; 7) Downloads an infographic.

Jon is an attractive lead, too but he’s harder to get. He looks exactly like the kind of guy you want to sell to (and by that I mean he meets the profile of your company’s standard buyer), and based on everything he’s doing, marketing thinks he’s qualified enough for sales to have a go at him (lucky ducks!) But Jon didn’t actually ask to speak to sales, so when sales calls him, what do they say?

Hi – my marketing team says you have a high lead score so I’m calling you – what’s up? Anything I can sell you?” Hm…probably not. How about “Hi Jon – I saw that you downloaded our white paper on 10 Tips for Improving your Widget ROI and our infographic on the Lifecycle of a Widget. Was that helpful for you? Are there any widget initiatives I can help you with or can I connect you with a widget expert?

Call me crazy (you wouldn’t be the first person), but I think that second talk track might get more traction. The key to enabling that conversation is insight. All sales has to do is take an extra moment to look at the behavioral history and marketing interactions of that lead and BOOM! that conversations is much more informed and much more likely to land a sale.