Lead Generation is Crippling Demand Generation

Conflict (Chess II)Lead generation and demand generation, although related, are at odds with each other. When many B2B marketers say demand generation, they mean lead generation, and the program will be measured on leads and the value of those leads.

The problem is, one is focused on changing the audience’s perspective, the other is focused on capturing their information.

Lead generation: collecting registration information, often in exchange for content, in order to build a marketing database for email or telemarketing followup. 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 your audience is more likely to purchase your products or services.

These terms are often used interchangeably by B2B marketers. The result is a single content marketing program that is expected to both deliver leads and drive demand. Unfortunately, it doesn’t work that way.

Case 1: Content Marketing for Lead Generation

Lead generation focuses on the content that is being offered. Your messaging, promotions and navigation paths are focused on the content being offered and funneling individuals into a registration page to access the content.

Your content, secured behind a registration form, is only seen by a small percentage of the individuals that initially respond to your campaign.

Stated another way, the focus of lead generation is creating demand for your content, not your offering.

Case 2: Content Marketing for Demand Generation

Demand generation focuses on creating demand for your category or your specific products or services. Content educates your audience, shapes their perspective and positions your offerings.

For content to create significant demand, it must be broadly distributed. To impact the largest possible share of your audience, barriers to discovering content, consuming content and sharing content must be removed.

In other words, maximizing demand generation requires removing registration capture, and therefore lead generation, from the primary flow.

Combining Demand Generation and Lead Generation

For the best results, you cannot combine lead generation and demand generation. Instead, lead generation and demand generation work together in sequence. The sequence can go in either direction, but it cannot be accomplished effectively in a single step.

Lead Generation First
Lead generation programs are used to create a marketing database. Email, telemarketing and other one-to-one marketing activity drives demand from this smaller audience with targeted sharing.

Drip-based email nurture programs, which have a very low incremental cost per contact, and the recent rise of marketing automation has made this approach the primary one I see among B2B technology marketers today.

Demand Generation First
Demand generation programs create interest in your product. Leads are captured as a means to fulfill on the specific interest that was created by the demand generation program. Contact me forms are an alternative to content offers where significant demand has already been created.

Your Turn

Do you put demand generation or lead generation first? Or do you effectively combine both in a single step? Share your experience or perspective in the comments below or with me on Twitter (@wittlake).

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About Eric Wittlake

I am a digital and B2B marketer with a background in online media and analytics. I work with B2B clients on media and integrated marketing programs at Babcock & Jenkins. You can connect with me on Twitter at @wittlake or in the comments here on my B2B Digital Marketing blog.

  • http://madsciencemarketing.com/ Phyllis Stewart

    Eric – you do a great job of discussing the real differences between lead generation and demand generation.  I had this discussion with a marketing leader just yesterday.  I agree with you – that both are critical to success.  I am not sure the question is “Which comes first?”, however.  I think the answer to determining the correct mix of demand generation and lead generation should be based on both:
    1.  Understanding where the strengths and weaknesses are in the marketing funnel process for the product/solution.  
    2.  The objectives of the organization.  

    Finally, I think the challenge is to integrate consistent messaging and positioning across re-packaged content.  For example, taking snippets of a white paper and making them available without registration – giving shoppers a taste of good content.  If the snippets are compelling enough, they will register to download the entire paper.  

    • http://b2bdigital.net/ Eric Wittlake

      Phyllis, thanks for the comment. I definitely don’t think organizations need to pick an exclusive focus of demand or lead generation, but I do believe an individual interaction with a prospect is doing one or another.

      A lot of good insights packed into your comment here, you nailed some of the challenges and insights we need to have. Thank you for adding to the discussion!

  • http://twitter.com/gfreishtat Gregg Freishtat

    Very timely and good post.  As the field of content marketing emerges, these distinction become important for trying to figure the “Big Shift” from offline outbound marketing to online inbound marketing.  The lines get really fuzzy when marketers mix sending out content to social channels in hopes of getting folks back to their site and also target specific companies withe same content for the same purpose.  At the end of the day, it all comes down to getting content in front of prospects that peaks their interest and intrigues them enough to click and hopefully get to your site.  From there, you need make sure you site has the depth and quality of content to support online sales of your goods/services.  We are working on a key piece of this puzzle with Scribit where we are tying to provide the “content” for content marketing.  Gregg Freishtat, CEO – http://www.scribit.com

    • http://b2bdigital.net/ Eric Wittlake

      Gregg, it is an interesting shift for sure. You mention sending content out to social channels and hoping to bring people back to the site.

      One change I believe we will see is more marketers thinking of those social channels as extensions of their sites. When this happens, they will be more focused on engaging that audience where they are. The site is still critical, but it will no longer need to be pushed on the first and every touch. This will definitely be interesting, thank you for commenting!

  • Maria Pergolino

    Eric, I found the way you discussed lead gen versus demand gen pretty compelling.  And I agree that it’s critical that the two are brought together for the most succes.  Really nice work.  -Maria, Marketo

    • http://b2bdigital.net/ Eric Wittlake

      Thank you Maria! I would love to hear more about what you are doing, Marketo is one of the companies I think of as an example of modern demand generation. Highly measurable, content focused, online, but educating first instead of looking to capture a “lead” on day one.

      Thank you for the kind comment!

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  • http://marketinginteractions.typepad.com/ Ardath

    Hi Eric,

    I love the way you clarified the two terms, however I’m wondering if filling out a form is still the definition of a lead. With anonymous website tracking, it’s possible to know which companies are interested but not self-identifying. Also, every time a prospect engages with your content, it’s also a form of nurturing (or demand gen). What I’m saying is that with buyers refraining from opting in until they are far through their purchasing process, if we rely on forms to determine leads, then we may be losing opportunities because we’re too late.

    If a prospect engages with all the freely available content you distribute – without filling out a form – and then calls sales because they have made a decision to pursue change and selected your company for their short list based on the value of that content (be it blog posts, articles, guest blog posts, conference presentations, YouTube videos, or website pages – all things that they can view anonymously) did your content marketing not serve to generate a lead?

    Which was a convoluted way of saying that I think lead generation has changed along with how buyers have changed. In fact, I think that by labeling everything, we loose sight of the big picture. Why can’t demand generation also serve as lead generation? I submit that it can, but not if lead generation is defined by the act of filling out a form.

    This being said, I work for enterprise companies and I know that opt ins are a form of measurement that they demand. They have mandates to fuel sales with these so called leads and present evidence that their programs are working. I get it. But I think we’re being short sighted to limit our definitions to form and no form. (which I know drives analytics people like you nuts :)

    I think the key is to look at demand gen and lead gen as connected pathways related to relevant content – some free and some gated. It’s not two separate functions but a well designed story that they can stay at the edges of or choose to opt in and dive deeper into the storyline. The problem is that by looking at each separately, we tend to create content separately without thought to overall story.

    By creating content that continuously tells a story across buying stages, when a lead opts in to a specific piece of the story, we theoretically know where they are and how to respond in the most helpful way. That’s part of the strategy piece that so many overlook. It has more to do with topic or the question they’re seeking an answer to than the form.

    I would also stipulate that demand generation is not about creating interest in your products as much as it is in helping prospects to understand what your products enable that solves a problem that’s a high business priority.

    Interesting conversation – thanks for starting it. Phyllis, Maria and Gregg also make good points along the same lines. Although I’d argue that Scribit is going to muddy the water further by enabling companies to post other people’s content to their websites. Curation is one thing. Riding on the back of other people’s work by placing it on their websites to hijack traffic is totally another (which is what I got from the limited content on their site) – but that’s a conversation for another day.

    • http://b2bdigital.net/ Eric Wittlake

      Hi Ardath,

      Wow, thank you for the blog post masquerading as a comment! I love the thoughts you laid out here.

      Anonymous leads are definitely an interesting topic, and one worthy of a full post and I’m pretty certain I’ve read it on your blog already! Identifiable but anonymous contacts allow us to apply some of the approaches normally reserved for lead nurturing. The lines get blurry quickly. 

      I won’t disagree with anything you have said here (I never do), I think we are looking at two different definitions that put us on very similar programmatic paths. Here are a couple examples of what I mean:

      Your example of someone that has engaged with your content and then, mid-stage, calls sales. I view that initial engagement as creating demand, ultimately the demand you created is why they called sales, right?

      Yes, they are connected pathways, I see someone going back and forth. Sometimes, we are creating demand for the next piece of content, “selling” it in order to get them to engage, and potentially register. Other times (within the content itself), we are looking to create demand. As you said (paraphrased), providing solutions for high priority business challenges and opportunities.

      In both cases, the program is the same, the measurement is the same (I believe), and we are drawing the line between demand and lead generation at slightly different places. Maybe to your point, that is why we need one broadly defined term and toss the other!

      Alternatively, maybe my line between the two groups is wrong here. When we consider the idea of anonymous leads, lead generation is getting someone to engage (register or not). What we are selling is the benefit of engaging. As soon as they engage, we are creating demand (through the experience or content) and on the back of the equity or improved perception we create, getting ready to sell the next engagement and the next opportunity to create demand (at the extreme, receptiveness to our followup email communications, many of which go unopened today). 

      Potential new theory: Lead generation creates the next engagement and demand generation creates the perception shift. It’s late, so sticking with ‘potential’ on this one for now.

      Loved the comment, thank you for taking the time to read and move the discussion as well as my understanding of it forward, I appreciate it!

  • http://www.b2bmarketinginsider.com Michael Brenner

    Hi Eric,

    Great post. I really like the way you delineate the 2 different efforts. My first question is more from my gut that tells me that you cannot truly “generate demand” but maybe it’s more about harnessing it. I think if you’re selling candy bars, you can tap into people’s desires to self-medicate with food by showing them a picture of a delicious candy bar.

    But in B2B, aren’t we just educating people that we have solutions to problems they already know they have. Or even if we are educating them that they have a problem, (and thus we have the solution) they are still in control, right?

    So I have started to use the term Demand Management to cover both lead generation and demand generation. The content’s goal is to educate and inform, at different stages of the buying cycle. Some content is more relevant for early stage (problem identification?) and some is more relevant for later stages (solution identification, vendor short list) but it is all about managing that demand to produce more engagement, with more people, earlier in the buying process and earn the right to see them continue their journey with us.

    This is just my 2 cents. Thanks for the inspiring thoughts!

    • http://b2bdigital.net/ Eric Wittlake

      Thanks for the comment Michael. Good points, the audience is definitely in control, and that is something we need to center in when we try to create demand or capture leads from that audience.

      I actually think demand generation needs to be kept separate from lead generation, as a pure focus on one or the other would put you on very different paths. Although focusing on leads without demand is a non sequitur, I can definitely see cases being made for focusing on demand with only a minimal direct focus on leads. 

      For instance: marketers that sell specialized products into a very small market with a limited number of potential prospects. In this case creating demand for their specific approach to addressing the market’s needs, demand for specific functionality, or demand (desire to work with the company) through establishing a strong thought leadership position that is apparent throughout their offering is valuable. They may already “know” most of the key players in a small market, “leads” are less of a concern. In this case developing a receptive audience is paramount.

      Paying $0.02 back. Thanks for sharing your thoughts and the great response on your blog as well!

  • Ecoleman

    Excellent article. 

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  • http://www.indusbpo.com/ IndusBPO

    its good……

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  • Suj

    Eric, Awesome information..great one…

  • Nish

    hi eric. Its good to interact with a person who knows in and out about demand generation. look u may think of it as stupid.. but i want to understand Demand Generation ….For eg: the terms that are used in this profile and then to target relevant audience and then create a demand….please help ..