How to Balance Demand Gen Vs Lead Gen
Many B2B companies over rely on lead generation tactics and strategies for their marketing. This over reliance on lead gen at the expense of demand gen can throttle topline growth and increase costs. If you are a business marketing to other businesses (B2B) you need to combine demand generation together with lead generation to maintain profitable growth.
In this article we explain:
- What lead gen Vs demand gen
- What channels and activities are considered lead gen Vs demand gen
- How to balance demand gen Vs lead gen
1. What is lead gen and demand gen ?
Demand gen activities are designed to grow the pool of people that are aware of your B2B brand product or service. The job of demand gen is to widen this pool of people through activities that generate interest. This is can be done through brand campaigns or thought leadership on a topic that is connected to the product or service you ultimately want to sell. While no ‘personal’ data is captured at this stage (all content is un gated) it should generate signals that indicate interest. These signals of interest can then be harnessed for lead gen. Demand gen is essentially top of funnel activity designed to prime new prospects for lead gen.
Lead gen activities are designed to capture information about prospects so you can then sell to them more effectively and efficiently. The job of lead gen is to take people who have shown signals that they may be in market for your product or service (now or in the future) and to move them towards action. That action involves sharing more detailed information about them, their business, problems and their needs. That information is then used to convert the prospect to sale by showing them that your product or service is the answer to their problem. Lead gen is primarily focused on bottom of the funnel activities.
Demand gen and lead gen should work together and investment between the two should be balanced. If you over rely on lead gen and don’t invest enough in demand gen your acquisition costs will go up over time.
“ most B2B businesses get caught in the lead gen trap.Over investing budget in lead gen at the expense of demand gen.
While this may work short term it almost always slows growth and increases costs long term"
Chris Godwin - Traktion Demand Generation Expert
2. What channels and activities are best for demand gen Vs lead gen ?
Demand gen activities need to reach new potential prospects to raise awareness of your brand and give you the opportunity to prime that audience for action.
To do this B2B brands will often focus on thought leadership with subject matter experts in the relevant domain to demonstrate they are leaders in that field. If you can do this you effectively prime the audience for later action.
All demand gen content should be ungated because at this stage you simply want as many relevant people to see it with the least amount of friction in order to increase the pool of opportunity.
In terms of channels B2B brands need to map out where potential audience goes and build demand gen activity to focus on those channels and meet their audience in those places
Frequency of communication should be regular because the sales cycle is often long with B2B businesses. You should aim to maintain visibility on the right channels over time to ensure you are top of mind.
Channels and activities will vary depending on business and audience but often include:
- Organic social: LinkedIn
- Podcasts: owned content and guest speaking
- Events: community building and educational
- Top of funnel ads
- PR: digital and offline
Lead gen is designed to take signals of intent and turn them into action that captures enough data and intelligence to start the sales process.
B2B brands focus lead gen on the channels and activities that enable this most efficiently with minimal wastage.
Messaging is often focused on a specific problem and or the appropriate solution provided by your business.
To do lead gen effectively therefore requires good data. The more intelligence you have about the person the more efficient the targeting and the more tailored and relevant your communication can be. This improves the overall efficiency of your lead gen activity
Channels and activities for led gen often include:
- Paid Search
- Gated content e.g whitepapers
- Referral programmes
- Bottom of funnel ads
3. How to balance demand gen and lead gen
One of the biggest challenges B2B brands face is balancing their investment of time and money into lead gen Vs demand gen. Businesses that focus purely on lead gen will over time optimise themselves into a corner and suffer from slowing of growth and increasing costs. Businesses that only focus on demand gen may be missing out on low hanging customer opportunities.
The optimal balance between demand gen and lead gen will vary by business.
The key considerations that should influence your split between demand gen and lead gen:
- Maturity of business
- Competitor spend
- Acquisition costs
- Brand awareness
- Resource (talent)
Each of these will influence to lesser or greater degree the balance of investment so these should each be taken into account. As a general rule though a healthy B2B business should be continually investing up to 60% of resource into demand gen in order to maintain volume and efficiency of lead gen activities.