We often see confusion over what is (and what is not) demand generation and how it compares to Account Based Marketing and Inbound marketing. Understanding the differences between these strategies is essential if businesses are to make informed decisions and optimise their marketing efforts.

In this article, we compare the key elements of demand generation, ABM, and inbound marketing. We aim to shed light on the distinctive characteristics of each approach.

What Is Demand Generation

Demand generation is the process of creating awareness of a product or service. The primary goal of demand generation is to engage potential customers and educate them about the product or service. Many will say that definition should be engage and convert, but that is where the confusion starts.

Demand generation strategies typically focus on building awareness, establishing thought leadership, and nurturing customer relationships. This involves various marketing techniques, including content marketing, social media marketing, search engine optimisation (SEO), paid advertising, and events. These tactics are employed to capture the attention of potential customers.

Demand generation efforts often start by identifying and targeting specific market segments or buyer personas. By understanding the needs, preferences, and pain points of these potential customers, marketers can tailor their messaging and marketing campaigns to resonate with the target audience. The aim is to create compelling content and experiences that attract and engage the market, delivering value by addressing their challenges.

Demand Generation vs Branding

First, let’s define branding. We define it (in simple terms) as – branding is what you do, it’s what you stand for. Ideally, it is an emotional connection with a target audience over time. It is a promise to remain true to your values and deliver consistently over time.

So branding and demand generation are interrelated (but different). Strong branding can support demand generation efforts by creating a positive company image and building trust with potential customers. Conversely, effective demand generation can contribute to brand recognition and loyalty.

The main difference is branding is at the company level, while demand generation is at the product/service level. Branding lays the foundation for customer perception and loyalty, while demand generation generates market interest in something specific.

Demand Generation vs Lead Generation

This is where things get messy and many will not agree with what follows, but here goes.

Let’s say you make floor cleaners. Your primary market is households. Your demand generation activities should be focussed on all households, because at some point any of those households might need a floor cleaner.

You might be able to make an educated guess about which households are more likely to buy than others, but you have no real way of knowing when or if any household may be in the market. If/when they are in the market, you want them to recall your product ahead of the competition. That is the focus of your demand generation activities.

In household A the floor cleaner breaks, they need a new appliance. In household B the owner is elderly and is tired of heaving around his old cleaner. They have been triggered and will be on a path to (potential) purchase. The households are now in the market. You are now in lead generation mode, you have prospects.

Now you are looking for some sort of first engagement. It might be via the website, social, a document download, a webinar sign up or some engagement at an event. Now you can keep in contact with the prospect, inform, answer questions and guide them towards a sale.

Demand Generation Vs ABM

You can find our definition of Account Based Marketing elsewhere on this blog. It is primarily a business-to-business focused process.

In our humble opinion, the term (and process) is driven by software tool providers. Therefore, it is (has become) a mix of demand generation and lead generation activities. Obviously, the tool providers strive to make their tools applicable to as wide an audience as possible. They want to provide their potential customers with a varied toolset.

We do not suggest ABM is flawed because, when applied properly, it can be a powerful process in B2B markets. We only note it can blur the lines between demand generation and lead generation and sometimes that can lead to a lack of focus and wasted time and effort (and money).

ABM should be a lead-generation activity. A target customer or individual is identified. A marketing activity such as a webinar, event or simply a piece of content has triggered (see above) their interest. You now have their information, you have qualified them in (or out) and now you can progress them to sale. Account Based Marketers work closely with sales to deliver a desired outcome.

Demand Generation Vs Inbound Marketing.

In our post detailing the advantages and disadvantages of inbound marketing, we defined inbound marketing. In short, inbound marketing is delivering content that informs and educates potential customers about your business.

Inbound (as the name implies) is passive. You put your information in the marketplace and wait for it to drive potential customers to take the next step. That step might be anything from opening another piece of content, to filling in a form, through to getting in touch.

Outbound marketing is active. It is pushing your message to achieve a specific result. It could be a phone call to secure an appointment. It might be advertising in an industry-specific magazine.

Demand generation often includes both inbound and outbound marketing tactics. Inbound marketing and demand generation are not mutually exclusive and can often overlap. Many organisations incorporate elements of both tactics into their overall marketing approach.

As an aside, inbound marketing is also an element of the Account Based Marketing approach. You can read more in our post comparing ABM with inbound marketing.

While ABM, inbound Marketing and demand generation differ, they are not mutually exclusive. In fact, businesses can leverage each approach in a complementary manner.

Ultimately, the choice of approach and tactics depends on various factors such as target market size, business goals, available resources, and marketing budget.

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