How does marketing help to fill your sales pipeline?
Depending on your operating model, lead generation and demand generation will play a part. They're often confused as the same thing, but they are in fact two very different strategies, each with a distinct purpose and approach.
In this article we look at the differences, the pro’s and con’s - and help you work out which one (or blend) is best for you.
The big difference?
The difference lies in the objectives. Lead generation is sales focused and seeks immediate results. Give me 100 leads, 10 will be interested, 1 will convert. Keep them coming into the funnel. Turn up the dial if we drop behind target!
Demand generation, on the other hand, is brand focused. Building long term market presence and authority, then meeting the buyer when they show intent.
Lead gen is a shorter-term strategy, while demand gen requires longer-term commitment - and in some cases, nerve.
Different Approaches
Lead Gen focuses on identifying potential customer types (Personas or ICPs), reaching them with campaigns, collecting contact information when they respond, then passing to an outbound direct sales team for outreach – a cadence funnel that usually involves booking a meeting and getting in front of decision makers with a presentation – all leading to a sale.
This approach is tactical, and short term. It’s aimed at driving more immediate sales. It can work well for lower cost products, contracts and services, but less so for big ticket or more complex solutions. Of course, some leads inevitably fall into a nurture pot for a longer term horizon, but more on hybrid approaches later!
Demand Gen on the other hand, is a longer term strategic process. You still have a target customer persona, but the aim is to create a sustainable interest in your brand products and services. This is about establishing your brand authority and building reputation and credibility (which comes with inherent trust) for long-term success.
It's less about pushing lukewarm prospects into a funnel, and more about meeting decision makers at the point where they’re ready – true intent. Think about it. Decision makers will consume your content but may not be ready. When they are – either you immediately come to mind, or a quick search will find your brand well ranked on search engines. Because they are familiar with your brand, and are in the funnel, you get straight to quality conversations.
Pro's and Con's
The pro’s of lead generation include a direct link to revenue, highly measurable ROI, and the ability to quickly gauge the market appetite and sentiment cycle.
However, the con’s include more lower quality leads – often not the decision makers. Compounded if you don’t get your targeting right. Picture the exec meeting where marketing present their campaign. A big success with charts and graphs showing waterfalls of click through rates, cost per click, new likes, follows – and leads. But the leads aren’t really leads if we’re being honest. They’re often curious people who have expressed a broad interest. Signing up for an email or following you on linked in isn’t a lead – it might be a prospect, but not a lead. So lead gen needs lots of resource, and there's quite a bit of wasted effort.
The pro's of demand gen include positive brand awareness and sentiment, inherent customer trust, and a solid foundation for future sales.
The con's are that you need a longer timeframe to see tangible results. I mentioned nerve earlier - there is a risk that when the buyer does want to engage there may be no active sales relationship, so a fear of missing out.
That’s often a sticking point with the CFO, who wants to see measurable impact/progress on the pipeline. Demand gen can be perceived as too woolly, as it’s more difficult to directly link your measurement dashboard of activity to sales. You still have a dashboard, and it will show growth - but in softer measurements like engagement and sentiment. The strategic secret is that alot of influencing and sharing takes place where you can't measure - in closed and dark social channels such as whatsapp - but if you're producing good content, it's happening. (watch this space for more about dark social)
Typical Campaign Strategies
Lead gen strategies are generally founded on classic activity like gated web content and driving MQLs through trade events, paid search and digital advertising.
Demand Gen focuses more on thought leadership – value led high quality, informative content on market landscapes and trends, using respected commentators who can tap into the challenges and opportunities facing the target market. Content is usually ungated and served through trade publications, member associations, and social media. All indexed for search.
Once you get into the detail, you can see that the two approaches require different team structures and skillsets. With lead gen, there's more focus on growth marketing activity - paid search and funnel analytics. With demand gen its much more about quality content creation in a wide range of formats.
Trends
Current trends in B2B marketing show a shift towards demand gen, but the reality is that many B2B marketers have a tactical and unintentional hybrid that blends lead and demand gen. Building longer term brand equity through thought leadership and nurture, but still deploying resource into pursuit of the immediate goals of lead gen.
To make a blended approach work, B2B marketers need to be clear about the buyer's journey and the complexities of their decision making process, then align marketing effort to fit. Using demand gen activity like content marketing and social media engagement can warm up the market, making it more receptive to lead gen campaigns that capture lead information.
A successful marketing strategy can leverage the strengths of both to create a robust pipeline and a strong brand presence – the long game in the end works better, but the short term needs of the business need to be served!
Next Steps
If you need help with your Marketing strategy, campaign or communication approach - or would like a consultation on your marketing effort, our GTM Marketing experts can help – check out our rates now.
You can also read the blogs and use our free templates for a range of Marketing topics, including Segmentation, Creative Storytelling, Integrated Communications and more. They're all in the Hive Knowledge Hub.
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