Do you remember about a decade ago when marketing was just… marketing? Nowadays, if you’re looking to grow your company’s presence, there are countless different methods that experts suggest.
Some of the most common marketing methods out there include demand generation, lead generation, and growth marketing. And while they may seem similar, there are subtle differences between each of them.
So, if you’re looking for new marketing tactics for your company and wondering which person to hire and which approach your company needs, we’ll give you the exact differences between demand generation, lead generation, and growth marketing.
Let’s dig in.
Demand generation is a marketing tactic that focuses on – you guessed it – generating demand for your product or service. The main difference between this approach and others on this list is the stage of the sales funnel.
Namely, demand generation is all about the top of the sales funnel: getting customers’ attention to your product, capturing leads, and passing on the most qualified ones to the sales team. Demand generation is a highly data-driven approach to marketing and it can include a number of different channels.
Some common demand generation tactics include:
- PPC campaigns
- Social media ads
- Content marketing and SEO
- Email marketing
- Online and offline events
- Creating lead magnets
Whereas a growth marketer is interested in the entire customer journey, a demand generation specialist is interested in one thing only. They want to attract the ideal customer’s attention, get their information, and pass it on to sales.
That’s the key difference between demand generation – the tightly-knit relationship with sales. While other marketing formats aim to drive as many potential customers to the pipeline, demand gen focuses on one type of leads – sales qualified ones.
Examples of demand generation
If you’ve been in marketing for longer than a minute, you probably know about Ahrefs. This is one of the best-known SEO tools in the business and they have quite a few fans. Since SEO is their bread and butter, it’s only natural that they create quite a lot of content that performs really well in search engine results.
But beyond that, the one thing that makes Ahrefs stand out is that their content generates demand for their product. Their visitors are nudged down the sales funnel with nothing but content.
Let’s take this post for an example: A 16-Step SEO Audit Process to Boost Your Google Rankings. It ranks well for “SEO audit”, which is something that you do with their very own tool, Ahrefs.
As you go through their 16 steps, you quickly realize that most of them are impossible to do without having an Ahrefs subscription. Sure, you could look for a replacement (such as SEMRush), but with all the steps laid out so clearly, you know exactly which buttons to push in Ahrefs… So you sign up for a plan right then and there.
If you look through the Ahrefs blog, you’ll see that each piece of content they create weaves their product into it. It’s a classic example of generating demand.
If you’ve ever seen the famous movie Glengarry Glen Ross, you probably remember the famous monologue by Alec Baldwin. In his amazing performance, Alec Baldwin says that they’re giving the salesmen amazing leads but the sales reps aren’t doing anything with them.
So what’s a lead, anyways?
A lead is anybody who’s interested in what you have to sell. Lead generation is the process of collecting the contact information of those people who are interested in your offer. There are two important things to keep in mind:
- Lead generation spans the entire customer journey and all stages of the sales process
- As a result, there are different types of leads
The main aim of lead generation is to collect information on these potential customers. Once it’s in your system (in a CRM or a similar app), those leads are passed on to sales.
As you would expect, not everyone who’s interested in buying from you is at the same stage of the sales cycle. Some are just browsing and considering what solution they need, others don’t even know they have a problem you can solve and the ideal type is ready to buy and with their hands grabbing their credit card.
With this in mind, we have several different types of leads:
- Information qualified leads (IQLs) – just browsing for information
- Marketing qualified leads (MQLs) – ready to be marketed to but not yet sold to
- Sales ready leads – (SRLs) – have done their research, getting in touch with you immediately to buy
- Sales qualified leads (SQLs) – leads nurtured by your marketing and sales teams who are ready to purchase
The aim of lead generation is to get the contact information from each of these types of leads so your marketing and sales team can get in touch and nudge them further down the sales funnel.
Examples of lead generation
Literally, any website you open now will have an example of lead generation tactics in place. In a very meta example, here’s a lead gen form from HubSpot, in an article about lead generation, they’re offering you to learn more about lead generation:
Once you click on the call to action, you’re forwarded to a landing page where you need to submit your details:
As you give them the information they need, you become a marketing qualified lead. Your inbox will now get hit with carefully tailored marketing emails based on what you downloaded and the information you left.
As mentioned, all companies have some sort of lead gen tactics, from the basic ones where you sign up for a newsletter, to personalized and well-thought-out ones like HubSpot’s above.
Out of the three terms we’re discussing today, this one has the broadest meaning and it’s been thrown around so much to the point where many business professionals consider it a buzzword. Growth marketing is a set of tactics for raising awareness, generating interest, capturing customers’ information, and increasing a company’s revenue.
In short, the major difference between growth marketing and the previously mentioned approaches is that it focuses on the entire customer journey. But shouldn’t we call it just “marketing” then?
The other crucial aspect of growth marketing is the guerrilla aspect of it. While traditional marketing is all about the tried and tested methods (display ads, email marketing, Adwords, etc.), growth marketing puts experimentation at the center of attention.
In the past, marketers relied on doing the same old several methods that produced results, such as Adwords, and tweaking them until the results eventually got better.
Growth hacking as a term was coined in 2010 by Sean Ellis as he was trying to come up with a title for a new marketing role. Essentially, he wanted someone to quickly find ways for a company to grow while testing out different methods and platforms until finding one that works. And at that point, you don’t stop and settle – you look for new channels for growth.
At the core of growth marketing are several aspects:
- A/B testing
- Cross-channel approach
- Creating marketing content for the entire sales cycle
But most of all, a key component of growth marketing is trying out new and unconventional ways to drive growth.
Examples of growth hacking
There’s a good chance that you heard of Clubhouse, the super cool voice chat platform launched in 2021. It was touted as the next big social media platform for marketers, entrepreneurs, and anyone who wanted to gather a crowd around themselves. While the app eventually flopped and disappeared into oblivion, its launch was a pure example of growth marketing.
Within its first year, the app grew from 0 to 10 million users. As the app started growing, Clubhouse decided that it shouldn’t accept new users freely. Instead, you could only join if you had an invite. And each user only got a handful of invites.
The result? Clubhouse invites got so hot that at one point, they were sold on eBay for several hundred dollars apiece. Existing users got one or two invites each with new ones coming only after actively using the app.
Within a few months, the app grew to 10 million users, largely thanks to creating a limited supply of new accounts – a perfect example of growth hacking.
Which one does your company need?
So, you now know the difference between demand generation, lead generation, and growth marketing. You’re probably wondering which one you can use in your company.
It depends on many factors – what you sell, whom you sell it to, how strong your product-market fit is, what you’re already doing in terms of marketing, and more. The truth is, you ideally need a little bit of each approach to do great marketing:
- The sales-oriented approach of demand generation
- The wide scope of lead generation
- The data-oriented, full-cycle approach of growth marketing
Take the best elements from each of the three approaches to marketing and you’ll find a custom model that fits your company, product/service, and budget. Take a look here how you can cover them all 3.
The key differences between demand generation, lead generation, and growth marketing
If you’re still confused, here are the basic elements of each of the marketing approaches in a nutshell.
- Focuses on awareness and interest and a single point in the customer journey
- Requires a tight connection between marketing and sales
- Directly impacts revenue
- Focuses on the entire customer journey
- Collects contact information from potential customers interested in the product
- Passes on leads for further marketing and nurturing or directly to sales
- Involves lots of A/B testing and experimentation
- Typically used by early-stage companies trying to find the right channels for advertising and acquisition
- Focuses on the entire sales funnel
While the lines between them can be a bit blurry, we hope that we showed you the differences between these three popular marketing methods. Now get out there and start generating some leads for your business!