Demand Generation vs. Lead Generation: The Key Differences and How to Combine the Two

Rather than solely focusing on generating more leads—which may not always result in conversions—shifting your strategy to prioritize demand generation could make a bigger impact.

In the demand generation vs. lead generation debate, demand generation builds awareness and interest first, creating a stronger foundation for attracting high-quality leads. By creating demand, you're more likely to engage prospects who are genuinely interested and ready to convert, making your lead-generation efforts far more effective.

Here’s an example: Imagine heading to the grocery store after work, feeling hungry but unsure what to eat. While on the subway, you see a video ad featuring crispy, mouth watering fried chicken. Suddenly, you're craving fried chicken—they’ve successfully created demand by sparking your interest and shaping your decision.

Although not everyone sells something as universally tempting as fried chicken, this approach works across industries, including software companies. By creating demand, businesses can influence potential customers' preferences and guide them toward their product or service, even before they realize they need it.

Effective demand generation aims to improve lead quality by building interest and desire for your product or service before encouraging prospects to purchase. Rather than rushing to convert, the focus is creating demand that draws in more engaged and qualified leads.

This approach is especially impactful in B2B environments. At Leadfeeder, we've seen firsthand how demand generation can drive tangible results, helping us nurture stronger relationships with prospects and ultimately leading to higher conversion rates.

But first, let’s look at demand generation vs. lead generation differences and how each works.

Note: Leadfeeder uncovers hidden site visitors so you can track sales and marketing efforts more effectively. Learn more about how we work, or try us free for 14 days. 

What is lead generation?

Lead generation identifies and attracts potential customers interested in a company's products or services. This usually involves content marketing, email campaigns, and social media outreach to capture attention and gather contact information. Businesses can nurture and guide these prospects through the sales funnel by targeting already engaged people.

Once leads are identified, the focus shifts to qualifying them—assessing their level of interest and readiness to make a purchase. Effective lead generation helps ensure the sales team works with prospects who genuinely intend to buy, increasing the likelihood of conversions. The goal is to convert these leads into paying customers through tailored follow-ups and targeted offers.

What is demand generation?

Demand generation is a marketing approach that creates a demand for a product or service before gathering leads or pushing for conversion.  

When it's effective, it generates brand awareness and drives traffic to your website. 

It is ideal for businesses with a new or less-known offering — especially those in the B2B sectors — but any organization looking to expand its pool of potential customers can leverage this strategy.

It might sound a lot like brand awareness, but there is a key difference. 

Demand generation marketing doesn't focus on your brand as a whole. Rather, it focuses on educating potential customers about their problems and possible solutions. 

Demand generation is a process, not a one-step strategy. The first step generates demand by informing your audience of your offering and encouraging them to learn more. 

The second step is demand capture, where you capture intent and push them to convert. 

This might sound like a strategy you're already using — good old lead generation. 

So what's the difference? 

What is the difference between lead generation and demand generation?

Demand generation builds awareness and fosters interest in a company's products or services. It employs various strategies to engage potential customers and can also effectively reach new target audiences.

In contrast, Lead generation is all about gathering contact information from your target audience so the sales team can reach out later.

1) Goals

• Demand generation: The primary objective is to increase awareness of your company and the specific problems your products or services address. Even if individuals don’t need a solution, they must recognize your brand as a potential provider when needed. By establishing this awareness, you create a foundation for future engagement.

• Lead generation: The goal is to convert this built-up demand into actual leads. As potential buyers progress through their journey, they become increasingly familiar with your offerings. At this point, you can present your product as a solution to their challenges, effectively guiding them from initial interest to a willingness to engage and potentially purchase.

2) Engagement

• Demand generation: This fosters trust between your audience and your brand, establishing your authority within your industry. By consistently positioning yourself as a thought leader, you encourage greater engagement from potential customers drawn to your expertise and insights.

• Lead generation: This is crucial in distinguishing your brand and solutions from competitors. It highlights your product's unique benefits and value, effectively showcasing how it addresses the specific needs of your target audience. This differentiation is essential for capturing the interest of potential leads and converting them into loyal customers.

3) Impact

• Demand generation: This focuses on educating your target audience by providing valuable, free resources that address their questions and concerns. This approach often includes blogs, videos, and guides that are readily accessible without any barriers, allowing prospects to engage with your content and build familiarity with your brand.

• Lead generation: This takes this further by employing more targeted content to nurture potential leads and enhance brand positioning. This strategy typically involves gated resources, such as eBooks, whitepapers, or exclusive webinars, that require users to submit their contact information before accessing the material. By doing so, lead generation provides valuable insights and helps capture and qualify leads for further engagement.

How is lead generation different from a demand generation marketing strategy? 

Lead generation is just one step in the demand generation process. With demand generation, organizations get users excited about their offerings, draw them in, and then work to push them through to conversion.

Lead gen only has one goal — gather as many contacts as possible. This can result in no leads if customers don't know you exist or a ton of unqualified leads (no matter how hard you work to qualify them.) 

Here's the thing — the B2B buyer journey has changed dramatically in recent years. Traditional B2B marketing, sales, growth, and lead gen strategies are no longer a one-size-fits-all strategy. 

For starters, sales and marketing teams are moving closer together. That means separating steps like lead generation from the rest of the funnel is no longer effective — or needed. 

To win at B2B growth, organizations must focus on building awareness and demand, creating high-quality content that solves a problem, and getting in front of buyers on the platforms they’re engaging on—not hiding it behind lead capture forms.

Once the demand is there, take the time to understand intent signals, build a presence on high-intent channels, and engage your sales team when prospects are ready to buy.

How to bring demand generation and lead generation together

Combining demand and lead generation requires a strong strategy that integrates both approaches to maximize their effectiveness. Here are some key steps to achieve this:

1. Create comprehensive content: Develop high-quality content that educates your target audience while addressing their pain points. Use demand generation techniques to create awareness through blogs, webinars, and social media, and complement this with gated resources like eBooks and case studies that encourage lead capture.

2. Leverage analytics: Utilize analytics tools to track audience engagement and behavior. By analyzing data from demand generation efforts, you can identify which topics resonate most with your audience. This insight can inform your lead generation tactics, allowing you to tailor your offerings to their interests.

3. Nurture leads effectively: Once you've captured leads through gated content, implement targeted email marketing campaigns that provide additional educational resources. This nurtures the relationship and maintains interest in your brand, effectively bridging the gap between demand generation and lead generation.

4. Align sales and marketing teams: Foster collaboration between your sales and marketing teams to ensure a unified approach. By sharing insights and feedback, both teams can develop strategies to convert interest generated through demand generation into qualified leads.

5. Focus on customer journey: Map out the buyer’s journey to understand how prospects move from awareness to consideration and ultimately to decision-making. Create tailored touchpoints that address their needs at each stage, integrating demand and lead generation efforts to guide prospects through the funnel.

6. Use retargeting strategies: Implement retargeting ads to re-engage users who have shown interest in your demand-generation content. This keeps your brand top-of-mind and encourages them to explore your gated lead generation resources, moving them further along the sales funnel.

Imbalanced lead gen vs. demand gen leads to:

• Unhappy customers

• Elevated customer acquisition costs

• Misaligned objectives for marketing and sales teams

• Decreased team productivity

What should be your marketing priority? Demand generation or lead generation?

Your marketing priority should focus on demand generation first, as it establishes awareness and interest in your brand, creating a foundation for long-term engagement. 

Once you’ve generated demand and built a relationship with your audience, lead generation can take the forefront to convert that interest into qualified leads. Balancing both strategies is essential, but starting with demand generation ensures that your lead generation efforts are more effective and targeted.

Assess your audience's awareness level

To decide whether to prioritize lead generation or demand generation, it’s essential to evaluate where your audience stands on the awareness spectrum. You can achieve this by asking key questions, such as:

• Are your target buyers aware of a potential business problem?

• Do they recognize possible solutions to that problem?

• Are they informed about how your product specifically addresses these issues?

If your audience is unaware of the problem you are solving or is only beginning to understand the situation and available solutions, you should focus on demand-generation tactics to spark their interest. Conversely, if your audience is generally aware of the business problem and potential solutions but lacks understanding of how your product uniquely resolves these issues, it’s an ideal moment to shift your focus to lead generation efforts.

Demand vs. lead generation: comparative analysis

Here’s a comparative analysis table outlining the key differences between lead generation and demand generation:

Aspect	Lead generation	Demand generation
Definition	The process of converting interest into qualified leads.	The process of creating awareness and interest in a brand.
Primary focus	Capturing contact information from potential customers.	Building brand awareness and establishing trust.
Target audience	Individuals who are already interested in your product or service.	A broader audience that may not yet know they have a need.
Content type	Gated content (e.g., eBooks, whitepapers, demos).	Ungated content (e.g., blogs, videos, webinars).
Goal	To generate actionable leads for sales teams.	To educate and engage potential customers about solutions.
Sales cycle stage	Usually operates in the middle to lower funnel.	Primarily targets the top of the funnel.
Measurement metrics	Conversion rates, lead quality, and sales closed.	Website traffic, engagement rates, and brand awareness.
Duration of engagement	Shorter-term engagement aimed at immediate conversion.	Longer-term relationship building and nurturing.
Approach	Transactional, focused on immediate results.	Relational, focused on providing value over time.
Impact on brand	Can lead to quick sales but may not foster long-term loyalty.	Enhances brand reputation and trust among potential customers.

B2B demand generation tactics 

Demand generation should be a collaboration between your sales and marketing teams. 

Aligning sales and marketing creates a seamless process from awareness to closing. Involved team members from marketing may include demand generation team leads, marketing directors, and marketing strategists. On the sales side, you'll likely involve sales managers and operations managers. 

So, how do you generate demand? 

Some of these tactics may be strategies you're already using. The difference with demand generation is the focus on generating demand rather than gathering leads — that comes later.  

Create high-authority, SEO-backed content 

B2B buyers spend just 17 percent of their time meeting with potential suppliers. How do they spend the rest of their time? Mostly researching independently. 

The key to engaging with potential customers in this stage is high-authority content that’s both informative and SEO-optimized. 

Depending on your business (and industry), this might include: 

• Blog posts 

• Videos

• Case studies 

• Ebooks 

• FAQ pages 

Remember, this content isn't gated. The demand generation stage is about generating demand, not gathering leads. 

Focus on exploring challenges users face, common problems, and offering solutions. 

Buyers in different stages of the buying funnel are attracted to different kinds of content. TOFU users are looking for content targeting informational keywords, while BOFU searchers lead toward more brand-related content like case studies or in-depth research. 

Whatever type of content you create, focus on optimizing it for SEO and making it as useful as possible. Don't push for conversions yet. 

Freemium services 

Offering a freemium product or service is one of the best ways to engage B2B buyers. 

These days, B2B purchase decisions often require input from many different stakeholders. Offering a freemium service (meaning access to a limited version of your tool or product) allows stakeholders to better understand your offering and the value you provide. 

We leverage this strategy by offering an always-free version of Leadfeeder and a free, two-week trial.

This gives users the chance to see the value we provide before they engage other stakeholders. When they can show, "Hey, this platform brought us X number of leads already," it's a lot easier to convince higher-ups to invest. 

Once they start using your tool and seeing the benefits, they're likely to stick around. It can also help you better understand how your users leverage your tool. 

It's kind of like when you walk through a mall food court, and the restaurants let you try their orange chicken for free, hoping you'll buy it. Except we offer software, not orange chicken. 😉

If you don't have a free software offering, create a tool that solves a major pain point. For example, an SEO company might offer a free, automated SEO audit. It's low effort for them but provides users with a lot of value. 

Think about your target audience and their key pain points — then create a solution and give it away for free.  

Build authority by offering training 

Webinars, live events, podcasts, and videos allow you to train people on more detailed or technical tasks. 

For example, a website tracking tool (like Leadfeeder👋) might offer training on aligning sales and marketing more effectively. 

Aligning these two teams is a key pain point for our customers, so helping them solve this challenge is a good way to get noticed. 

This type of training establishes your authority and value before users ever have to make a purchase. Offering value for free builds trust. 

Training doesn't have to be related to your specific product or service quite yet. (Though it can be used for demand capture as well.) Instead, focus on solving a problem your prospective customers face. 

If you aren't sure what topics to cover, ask them! 

Use a poll on X or LinkedIn to find a pain point. 

If a team member is knowledgeable about the topic, have them host a webinar, video, or podcast. If not, partner with another organization to host a training. 

Focus on LinkedIn 

With more than 800 million members, LinkedIn is one of the most effective platforms for B2B marketing. It's also ideal for demand generation. 

Start by building trust on the platform by sharing your SEO-driven content, training, and free tools — but don't only push your own resources. 

Join groups related to your industry, answer questions, and provide insight where you can. Social selling strategies, like optimizing your profile and engaging in conversations, are a good place to start. 

Pay attention to what content users share, the challenges they face, and the interests you have in common. As you build relationships and get to know your audience better, you'll be in a better position to capture leads using paid ads or other demand-capture strategies. 

LinkedIn actually offers a demand generation guide to help you leverage the platform effectively.

Leverage account-based marketing 

Account-based marketing and demand generation go hand-in-hand. This strategy targets very specific accounts, making it easier to focus on generating demand with decision-makers. 

Start by building a target account list. If you do this right, generating demand should be a pretty simple process. Use intent-based data to ensure you target accounts that are a good fit for your business. 

Then, target those accounts with SEO-backed content, training, and other useful content to generate demand. Personalize your outreach by addressing specific pain points they have. Consider using dynamic content to create a more personalized experience. 

I also recommend using a tool like Leadfeeder to track their actions on your website so you can see which content is most effective.

Once an account engages with your content, move on to capturing their contact information using the tactics mentioned in the next section. 

B2B demand capture tactics

Once you've created demand using the strategies in the previous section, it's time to turn that demand into paying customers. The key is to focus on high-intent signals and channels, not just gathering as many leads as possible. 

Identify high-intent customers using tools like Leadfeeder 

Website tracking tools like Leadfeeder use IP and domain information to track what companies visit your site. For example, you can see that someone from Microsoft visited your website, including what pages they viewed, how long they stayed on each page, and their exit page. 

But we don't just hand over a huge list and leave you to sort through the data. 

Leadfeeder's custom feeds and filters help you zero in on high-intent leads, such as those who have visited your website five or six times, read your blog, and then visited your pricing page — or whatever behavior you consider high-intent. 

Define what high-intent means for your business, then use a custom feed to send those leads directly to your Slack channel, get an email notification, or even create an account in your CRM and assign it to the right salesperson. 

Host in-depth webinars or training that requires registration 

We know we covered offering training in the first section — it is a solid strategy for generating demand. However, it can also help capture demand depending on what topics you cover. 

For example, you might use demand generation to share seven ways to get more customers. That establishes your value and, well, generates demand for your offering. 

In the demand capture stage, you'll want to be a bit more in-depth and product-focused. For example, you might host a webinar to train users on a new feature, offer an in-depth demo, or walk them through complicated processes. 

Asking users to sign up or register allows you to gather more information you can later use to reach out, retarget ads, or otherwise nurture them. 

Use niche targeting for paid ads 

Paid ads are incredibly effective for demand capture. Awareness can also mean a lower CPC, which is awesome. 

At this stage, users already know who you are, what you offer, and have a solid understanding of the value you deliver. 

Leverage paid ads to show up at the top of search results, above organic results. The purpose here is to get attention from users who already know about your offering and have engaged with you in the demand generation stage. 

By narrowing your focus (and targeting) to users already familiar with your brand, you'll spend less on paid ads and enjoy a higher conversion rate. 

The key here is targeting. 

Use niche targeting to get your potential audience down to a much smaller-than-average size. 

Remember, the goal isn't to cast a wide net; rather, you're looking to engage users who are aware of your brand. 

Your exact targeting parameters will vary, of course. 

Consider uploading a target email list to Google Ads and target users who engage with you on other platforms, like social or email. If you don't have access to this, use interests, location, and other targeting options to create a smaller target list. 

Google offers targeting automation features that may be useful here.   

Engage users on review websites 

Users on review sites are generally BOFU. They're comparing their options and making the final purchase decision. 

The demand has been generated, so now it's your time to shine. 

Take the time to optimize your listing on review sites like Google, Yelp, G2, Capterra, SaaS Genius, etc. 

Make sure your pricing is correct, and your features are well-represented and easy to understand. 

Then, head to the comments section. If there are positive reviews, thank users for engaging. If you have negative reviews, take the time to respond, ask clarifying questions, and offer a solution. 

Demand generation metrics to track your success 

Demand generation shifts the entire sales and marketing strategy — which means you can't keep tracking the same old metrics. 

To tell how effective your efforts really are, focus on sourced pipeline. 

For example, your overall close rate isn't going to tell you much. Hopefully, it tells you closes are going up, but you need to dig deeper to understand what, exactly, is driving that increase. 

Rather than tracking overall metrics, track these five metrics for your BOFU demand capture channels:

• Close rate per channel: Close rate is a broader metric, but it can be more useful when tracked per channel or platform.  

• Cost per acquisition: This is one of the most important metrics for demand generation. Engagement and close rates are all fine and good, but make sure to track how much each acquisition costs on each channel as well. 

• Cost per lead: Track your overall spend per lead to calculate how much you'll need to invest to scale your efforts. 

• Engagement rates: A slightly softer metric (you'll have to determine what you consider engagement). However, it's helpful to see how effective your demand-generation strategies are.  

• Customer lifetime value: CLV tracks the average profit you earn for each customer. Aim to track this for each channel to understand better where to focus your efforts and budget. 

Demand generation vs. lead generation: the key to B2B success is clear

In the demand generation vs. lead generation debate, a strong demand generation strategy helps B2B organizations attract new prospects by creating excitement and interest around their offerings. Instead of pushing for immediate conversions, this approach prioritizes building genuine relationships and trust with potential customers, fostering long-term engagement.

Rather than relying on short-term tactics like offering incentives and hoping leads respond, demand generation focuses on delivering value and creating demand organically. This strategy encourages meaningful interactions that guide prospects toward becoming high-quality, ready-to-convert leads.

Demand generation can potentially enhance both the quantity and quality of your leads significantly. To streamline this process, consider automating where feasible. Automation can help manage the influx of leads more effectively, allowing you to focus on closing more deals and nurturing valuable relationships.

For instance, Leadfeeder is a demand generation tool designed specifically for B2B businesses, helping you identify and track high-intent visitors to your website. These tools can optimize your lead generation efforts and gain insights into your audience. Start your journey today by signing up for a free two-week trial!

FAQs about demand generation vs. lead generation

What is demand generation vs. lead generation?

Demand generation vs. lead generation refers to two distinct marketing strategies: demand generation focuses on creating awareness and interest in a company’s products or services to attract a broad audience, while lead generation zeroes in on converting that interest into qualified leads—prospects who are ready to engage and make a purchase.

Demand generation vs. lead generation: how do they work together?

Demand generation and lead generation work together to create a seamless marketing strategy. Demand generation builds interest in a company's offerings, effectively warming the audience and creating a strong foundation. Once this interest is established, lead generation takes over by converting engaged prospects into qualified leads, guiding them through the sales funnel. Together, they ensure businesses attract potential customers and nurture them into loyal clients, enhancing overall conversion rates.

What is an example of demand generation?

An example of demand generation is a software company hosting a free webinar on industry trends and best practices. By providing valuable insights and expertise, the company attracts a wide audience of potential customers interested in learning more. During the webinar, they promote their software solution as a tool that could help address the challenges discussed. This approach builds awareness and interest in their product and positions the company as a thought leader, effectively generating demand for their services.