Overcoming the Demand vs. Lead Gen Tug of War

Published on June 26

Marketing leaders often face the challenge of being pulled in different directions by other go-to-market (GTM) executives, who may prioritize immediate lead generation over long-term brand building, or vice versa. What's more, there's often a desire to frequently and sporadically swing back and forth between both. This tug-of-war can create a difficult balancing act. For instance, some execs may push for quick results in the form of leads and conversions to drive immediate sales, pressuring marketers to focus heavily on lead generation campaigns. Meanwhile, others might pull for the importance of establishing a strong brand presence and fostering customer loyalty, which requires a more sustained demand generation approach. Navigating these conflicting priorities requires marketers to clearly communicate the value of both strategies and how they complement each other. By demonstrating that effective lead generation can benefit from a strong brand foundation, and that brand building can drive more qualified leads, marketers can advocate for a balanced approach that meets both immediate and long-term business goals.

Here’s why and how you should manage demand and lead generation differently to maximize your marketing ROI:

Understanding the Distinction

Demand Generation: This focuses on creating awareness and interest in your products or services. It's about educating your audience, building brand recognition, and nurturing potential customers until they're ready to engage with your sales team.

Lead Generation: This involves capturing information from potential customers, typically through forms, to convert them into leads that your sales team can follow up with. It's a more targeted approach aimed at converting interested prospects into actionable leads.

Why Track Them Differently?

  1. Different Objectives: Demand generation aims to build awareness and drive interest at the top of the funnel, whereas lead generation focuses on capturing and converting that interest into leads for sales. These distinct goals necessitate different metrics and tracking methodologies.
  2. Customer Journey Stages: Demand generation addresses the awareness and consideration stages, whereas lead generation is concerned with the decision and action stages. Understanding where your prospects are in the customer journey allows you to tailor your strategies and track relevant KPIs for each stage.
  3. Resource Allocation: By managing  demand and lead generation separately, you can allocate budget and other resources more efficiently. You can identify which activities are driving awareness and which are converting leads, allowing for better budgeting and strategy refinement. Many industry experts state that at least 40% of the marketing budget should be allocated to demand genFor startups, it is common to allocate a larger portion of the marketing budget towards brand building, typically around 20-30%, to establish awareness and credibility. This is crucial for new businesses trying to make a mark in the market. On the other hand, established businesses, having already built some brand presence, may allocate a smaller percentage, usually around 10-20%, focusing more on direct response marketing and other strategies that drive immediate results.
  4. Timelines: It's important to note that demand generation takes substantially more time than lead generation because it focuses on building long-term brand awareness and nurturing customer relationships. While lead generation aims for quick conversions through targeted campaigns, demand generation involves creating valuable content, engaging with audiences on multiple platforms, and gradually establishing trust and credibility. This sustained effort requires consistent messaging and strategic planning, resulting in a stronger brand presence and more loyal customers over time.

How to Track Demand Generation

1. Brand Awareness Metrics: Track metrics like website traffic, social media engagement, and content views. Tools like Google Analytics can help you measure site visits, bounce rates, and time spent on pages.

2. Engagement Metrics: Monitor social shares, likes, comments, and interactions on your content. Platforms like Hootsuite or Sprout Social provide detailed analytics on social media performance.

3. Content Performance: Evaluate the effectiveness of your content by tracking downloads, video views, and webinar attendance. Tools like HubSpot offer insights into how your content is performing across different channels.

Example: "At Acme Company, we tracked brand awareness by measuring website traffic and social media engagement. Using Google Analytics, we identified that our blog posts were driving a significant amount of new visitors, while Hootsuite provided insights into our most engaging social media content. This data helped us refine our content strategy to focus on high-performing topics."

How to Track Lead Generation

1. Conversion Metrics: Track conversion rates from landing pages, forms, and call-to-actions (CTAs). Tools like Unbounce and Leadpages can help optimize and measure your landing page performance.

2. Lead Quality: Assess the quality of leads by tracking metrics such as lead scoring, qualification rates, and sales follow-up success. CRM systems like Salesforce or HubSpot CRM offer detailed tracking of lead interactions and quality.

3. Funnel Metrics: Monitor the progression of leads through the sales funnel, from initial contact to conversion. This includes metrics like MQL (Marketing Qualified Leads) to SQL (Sales Qualified Leads) conversion rates, and ultimately, closed deals.

Example: "In our lead generation efforts at ABC Corp, we utilized Unbounce to create and track high-converting landing pages. We also implemented lead scoring in HubSpot  to assess lead quality and ensure our sales team focused on the most promising prospects. This approach improved our MQL to SQL conversion rate by 25%."

Conclusion

Managing, budgeting, and reporting on demand generation and lead generation separately allows you to gain a clearer picture of your marketing performance and make more informed decisions. By focusing on the specific metrics relevant to each strategy, you can optimize your efforts, allocate resources more effectively, and ultimately drive better business outcomes. Understanding the distinct roles these strategies play in the customer journey is essential for any marketer looking to create a comprehensive and effective marketing plan.

Similarly, to help find common ground in the tug of war, as marketing leaders it's our responsibility to ensure fellow go-to-market executives comprehend the differences between demand generation and lead generation, and their vastly different goals and timelines. While integrating both strategies can help meet immediate and long-term goals (as a strong brand boosts lead quality, and effective lead gen supports brand credibility) they have unique objectives that need to be acknowledged, understood, and necessitate separate management, budgeting, and reporting approaches.