Knowing the differences between demand generation and lead generation is essential for any small business hoping to increase awareness of its brand and offerings.
Demand gen strategies help you meet consumer needs in the long run, while lead gen entices potential customers to learn about your business and begin purchasing as soon as possible.
Let’s dive into the intricacies of demand gen vs. lead gen, discuss how to mix the two, and explore some practical tips for enhancing both with Nextdoor.
What is demand generation?
Demand degeneration uses marketing strategies to raise awareness of your products and company, creating a sales dynamic where your brand is desirable and trustworthy. It’s a long-term strategy for inspiring and holding consumer interest over the lifetime of your small business.
A few common ways to bolster demand generation include:
- Posting blogs and other creative content
- Running effective, wide-reaching social media campaigns
- Hosting webinars and in-person events
- Offering benefits, such as loyalty programs and discounts
Demand generation strategies can enhance your brand’s visibility and lead to more high-quality leads over the years.
What is lead generation?
Lead generation is the process of attracting potential customers to your business and informing them about your brand. The ultimate goal is to drive results that impact your bottom line positively. It generally involves getting a future client’s contact information and playing off their existing interest to steer them toward suitable products and services.
Generally, lead generation leverages:
- Landing pages on your website with contact forms for potential leads to fill out
- Gated content offers that require an email, phone number, or other contact information to access
- Targeted ads with clear Calls-to-Action (CTAs) imploring readers to view your page, make a purchase, or perform some other action
Lead generation is more immediate than demand gen and can impact your sales pipeline faster. It also boasts more cut-and-dry performance metrics, making it easier to calculate the Return On Investment (ROI) you put into your efforts.
Demand generation vs. lead generation: A comparison
The main differences between demand generation vs lead generation come down to the following.
Funnel position
Demand generation focuses on the top of the sales funnel with actions like:
- Raising awareness of your brand
- Inciting interest in your products and services
- Setting your company up for future sales
Meanwhile, lead generation is concerned with bottom-of-the-funnel activities like:
- Evaluating each client’s potential to purchase
- Nurturing existing customer relationships
- Closing deals
Timeframe
Demand generation is a long-term strategy that focuses on building up a brand and maintaining its popularity over time.
On the other hand, lead generation is more of a short-term approach for bolstering your bottom line. It focuses on attracting new customers in the here and now, educating them about your offerings, and closing the deal before they move on to another brand.
Metrics for success
To gauge the success of your demand generation efforts, track and measure your:
- Website traffic
- Social reach
- Brand mentions online and in popular media
On the other hand, your lead generation’s efficacy is more tied to your:
- Conversion rates
- Amount of leads captured
- Cost per lead acquisition
How demand generation and lead generation work together
Both demand and lead generation are essential for your small business's enduring success. A well-integrated demand generation strategy with lead generation techniques can accelerate your sales objectives. Consider these factors to leverage the two for your company’s benefit:
Synergy between strategies
Demand generation lays the groundwork for lead generation strategies by nurturing interest in your brand and offerings. The Mississippi Department of Transportation, for example, has spent years establishing itself as the go-to source for hurricane watch services by providing essential updates and aid during storms.
In 2024, the department wanted as many people as possible to be prepared when hurricane season struck. So, they generated a flurry of new leads with a campaign of sponsored Nextdoor posts. Their efforts raised their Click-Through-Rates (CTRs) to nearly six times their standard benchmark.
Choosing the right mix
When starting your business, it's important to focus on long-term demand generation. Establishing a need for your products and getting your name out on the market bolsters your potential for clientele and returns down the road while expanding brand awareness.
This early attention to demand generation is particularly important for:
- Startups
- Small- to medium-sized businesses
- Companies operating in less densely populated areas
Once your brand is more established, you can pivot your focus to lead generation by targeting specific clients and demographics. Hoover, for instance, has been dealing with dirt and debris for well over 100 years—its name is synonymous with the vacuum industry.
When they wanted to expand their base, however, they leveraged Nextdoor to target a new audience and generate high-quality leads: people who had recently moved. The strategy worked, and Hoover earned a nearly 200% Return on Advertising Spending (ROAS).
Practical tips for businesses
Now that you understand demand gen vs. lead gen, consider these key tips to improve your advertising spending, optimize your B2B marketing strategies, and score more lead conversions.
Leverage tools and platforms
Leverage social media platforms to reach your local audience—especially your Nextdoor Business Page. Nextdoor connects you with real homeowners in your area, helps you develop a personal relationship with your future clientele, and advertises your brand to those most likely to use your services.
Besides Nextdoor, utilize a Customer Relationship Manager (CRM) to keep track of your clients’ information. If it has marketing automation features, you can also avoid much of the tedious work of lead management—such as writing out follow-up messages or scheduling client calls.
Adapt to audience needs
Understanding where your audience is in the buyer’s journey is essential to your lead nurturing and conversion efforts. Every individual takes their own path to purchasing but, generally speaking, the buyer’s journey can be broken down into three stages:
- Awareness – The buyer understands that they have a problem.
- Consideration – The buyer details their problem and starts searching for solutions.
- Decision – The buyer gauges different solutions and chooses the one that best fits their needs.
Knowing where your buyers are allows you to determine the best course of action. If they’re early in the journey, play on the general pain points that your small business can solve. If they’re near the end, detail brand specifics that make your solution the best choice for them.
Bolster both demand and lead generation with a Nextdoor Business Page
Demand generation is a long-term strategy focused on elevating interest and trust in your business, services, and products. Lead generation is a short-term technique aimed at converting specific individuals. Both are essential for sustained success and growth, but to decide which to implement first, consider your current goals and how close your clients are to purchasing.
It's also essential to leverage a Nextdoor Business Page to meet local homeowners and spread the word about your brand. That’s because 88% of Nextdoor users are the main purchasing decision-makers for their households.
Are you ready to reach interested, motivated buyers in your area? Set up your Nextdoor Business Page today.
Sources:
- Oracle. Demand Generation. https://www.oracle.com/th/cx/marketing/demand-generation/
- HubSpot. What Is the Buyer's Journey?. https://blog.hubspot.com/sales/what-is-the-buyers-journey
