Defining demand generation, lead generation, and inbound marketing, and why you need all 3.

Marketing these days is full of jargon, which can be confusing for senior executives and others who aren’t fully immersed in it on a daily basis. Understanding the differences between demand generation, lead generation and inbound marketing is paramount for business leaders to make logical decisions about where best to apply marketing dollars.

We’ve put together this primer to help you identify primary characteristics and key tactics of these disciplines, so you confidently develop a strategy that includes all three.

Inbound Marketing

While inbound marketing is no longer exactly new, it remains unique compared with traditional marketing methods. Inbound focuses on attracting potential customers through the provision of relevant, helpful content across a broad spectrum of digital channels. The content is aimed at addressing the problems of your ideal customer, with the intention to develop trust and credibility for your solutions and attract qualified prospects. The inbound process is viewed as much more targeted and effective than the old “spray and pray” methods of marketing used in the past.

Inbound marketing strategies and key tactics include search engine optimization, social media marketing, content marketing, pay-per-click advertising and email marketing.


Demand Generation

Demand generation is the lynchpin supporting the overall marketing and sales cycle. It begins with the initial prospect interest and underpins lead generation, nurturing and sales fulfilment, taking the prospect through the entire funnel into a customer relationship. Generating demand for your product or service sounds similar to inbound marketing, but there are differences:

  • Inbound is marketing focused, but demand generation is more sales oriented.
  • While inbound seeks to increase awareness and familiarity with the company as a whole, its products and services, demand generation aims at increasing the actual desire for your offering in your target market.
  • The goal of demand generation is to develop and nurture key prospect and customer relationships over the long term.

Demand generation strategies and key tactics include developing programs aimed at promoting new product features, building consumer “buzz,” engaging existing and prospective customers with orchestrated touch points throughout the process of optimizing lead conversion and the sales cycle. These activities take place on a broader scale than lead generation, but in a more targeted environment than inbound marketing.

Lead Generation

Lead generation is the method used to stimulate and capture prospects’ interest, draw them close enough to obtain their personal contact information and set them on the path to making a purchase. It sets the scene for conversion of a prospect into a customer.

Strategies and key tactics for lead generation include both reaching out to prospects through direct mail, referrals or word of mouth, personal networking, trade shows, seminars and special events, and enabling prospects to approach the company through inbound marketing.

Downloadable, gated content such as white papers and eBooks has been a popular method of obtaining contact information for some time, and ad retargeting is gaining ground as a way to “track” the prospect’s journey to becoming a customer.

Finding Intersectionality

Ultimately, the relationship between these disciplines follows a route that’s both sequential and mutually inclusive:

  • Step 1 – Inbound marketing enables a company and product to become known in the target market. As such, it’s both the overall process and the first step towards increasing sales.
  • Step 2 – Demand generation helps to raise awareness among the target audience of the value a product or service can offer, in terms of their needs and wants. This can’t happen without inbound marketing first familiarizing the audience with the company and its solution.
  • Step 3 – Lead generation identifies those prospects who are getting closer to making a purchase, and enables the company to connect with them to expedite the process. This typically occurs after the generation of demand, and separates out potential customers who are more ready to buy than others.

Making the Cut

In light of this explanation, which of the three aspects of marketing does an average B2B company require? We believe a comprehensive marketing strategy encompasses all three.

  • Inbound marketing as a standalone tactic may deliver lots of awareness and a “primed” target audience. Unless it’s followed by a sound process to identify and approach actual customers, however, the ROI will be non-existent.
  • Generating demand for a product without identifying interested prospects might result in a few transactions made by determined customers, but certainly won’t maximize the profitability of the company.
  • Lead generation without laying a solid foundation on which to build interest and develop awareness is likely to be ineffective, even if it includes ad hoc components of the first two stratagems.

To succeed in the B2B marketplace, companies need an overall inbound marketing strategy that encompasses the important focus areas of demand generation, lead generation, lead nurturing, lead conversion. When these are followed by timely sales enablement and quality service, it’s a winning equation for any marketplace.



About Paul Mosenson

NuSpark Marketing Founder, Chief Lead Generation Strategist and Online Media Director An experienced B2B and B2C marketer, Paul has been helping clients generate leads and grow their businesses for over 25 years. Paul helps plan and optimize marketing and lead generation programs.

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