Demand generation marketing is the primary way brands can bring in new customers.

When it comes to growing your business, it’s not enough to just nurture your existing leads. While it’s true that it’s cheaper to retain current customers than to acquire new customers, it’s equally true that without customer acquisition, your brand cannot grow. 

This delicate balance of building brand awareness, introducing your product, and creating a buzz around what you do all works to bring new eyes to your company.

Demand generation vs. lead generation

The terms “demand generation” and “lead generation” are similar, and many marketing teams make the mistake of using them interchangeably. However, there are some key differences between demand generation and lead generation.

Understanding their differences can allow you to focus on each accordingly, manage your budget effectively, and ultimately yield greater success for your business. 

The difference between demand generation and lead generation

Demand generation marketing involves using data-driven strategies to create awareness and increase demand around a product. Lead generation, on the other hand, takes prospects and helps move them through a sales funnel with the overall goal of turning prospects into customers. 

Many marketers make the mistake of focusing exclusively on lead generation. In fact, marketers are expected to spend as much as $3.15 billion on lead generation in 2022

However, lead generation on its own is not enough. Without demand generation, your audience doesn’t grow. This can cause your business to stagnate in the long term.

Deciding between demand generation and lead generation

Ultimately, both demand generation and lead generation are necessary for your business to succeed. By focusing on just one, you miss the benefits of the other. 

Many companies already know to focus on lead generation, but when you consider that only 20% of leads will ever become sales-ready, it becomes clear that having a larger audience to draw from is necessary for overall business success.

Using data to generate demand

Creating demand for your product relies on more than coming up with a witty catchphrase or a fun social media challenge. Brands that excel at demand generation do so by using data analytics and slowly tweaking their strategies to improve their results.

For example, they may use keyword research to determine what their target audience is searching for. Then, using that information, they would generate content to attract readers to their website using something like Google Ads to improve their successes.

They might also use social media advertising to showcase the things that make their product great, using A/B testing to determine the best social media ads to reach new audiences.

As prospects respond to this generated hype, they might be brought to a landing page that further compels them to be interested in what the brand has to offer.

Benefits of demand generation marketing

Focusing on demand increases the success of other marketing efforts. By turning your attention to demand generation, you can:

  • Build brand awareness
  • Develop brand authority 
  • Create a culture of reliability
  • Boost your lead generation efforts 

Demand generation often has a back-and-forth relationship with these factors. For example, generating demand will build brand awareness. But building brand awareness can also help generate demand.

As a result, focusing on improving any one of these factors often results in improving all four factors.

Building brand awareness

One of the greatest benefits of focusing on demand is that it builds brand awareness. At best, your brand becomes so well-known it becomes a household term. 

Consider, for example, Q-tips. This is a brand-name cotton swab, but chances are you almost never use the word cotton swab, even if you’re not using official Q-tips. The brand name has become synonymous with the product. This is the result of building brand awareness. There are a number of products, from Scotch Tape to X-ACTO knives, that are better known by their brand names than their generic ones.

Social media marketers already know about the importance of building brand awareness — it’s their top priority. Creating hype around a product, with the hopes of it “going viral,” is one of the main jobs of social media marketing. But building brand awareness should be a priority even outside of social media content.

On average, it takes up to seven impressions for a person to remember a brand. But once customers have an understanding of a brand, the impact can be huge.

An estimated 64% of women and 68% of men report having felt an emotional connection to a brand. Omnichannel customer engagement helps — when a brand is presented the same way across all channels, revenues can increase by up to 24%

Developing brand authority

Creating demand for your product or services also helps position your brand as an authority in your industry. While authority doesn’t necessarily translate to trust, it’s easier to trust a brand that has proven authority on a subject. This is important since 59% of shoppers prefer to buy new products from brands they already know and trust. 

Niching down can help you improve your authority on a subject. For example, it may be hard to become a trusted authority on “exercise,” but becoming an authority on “postpartum exercise you can do with your baby” may be easier. Strong keyword research can help you decide where to focus your authority, and thus how to generate demand for your brand. 

Creating reliability

When you consistently generate buzz around your products — and the products actually live up to their reputation — it shows that your company is reliable. 

The importance of brand reliability to your customers can be seen in how customers interact with reviews. For example, for every one-star increase a brand receives on Yelp, they receive, on average, a 5-9% increase in revenue.

This shows a direct correlation between the perceived reliability of a brand and the amount of money customers are willing to spend.

That being said, customers are becoming savvier about the difference between the hype a company generates and its follow-through. Even scientific articles are not outside of scrutiny. PubMed, a leading literature database, is in the testing stages of adding comments sections on their articles to ensure that readers can tell, at a glance, which articles are reliable and which are filled with a scientific bias.

The best way to ensure that the sense of reliability you generate by creating buzz holds up to scrutiny is to consistently deliver high-quality products. 

Demand generation doesn’t overpromise on results. Instead, strong demand is created by consistently living up to promised results. This makes it more likely that people will offer strong reviews, influencers will be willing to work with your brand, and the hype you generate will remain sustainable over time.

Boosting lead generation

Turning your focus to demand generation doesn’t mean you care less about lead generation — it means you’re helping to boost it. Think about it: if lead generation nurtures your current audience, then by growing your audience, it makes sense that your leads also grow. 

You can enhance this benefit by having a clear process for nurturing prospects generated by demand.

For example, making it easy for prospects to sign up for your email newsletter can allow you to bolster lead generation from demand generation. This is where having a strong sales funnel comes in.

How can you generate demand?

Remember that demand generation is data-driven. This means that before you can start generating demand, you have to establish goals for your company and research your target audience. 

Once you have reliable data, you can move on to the strategies — such as content creation and influencer marketing — that can convert that data into demand. 

Establish clear goals

Before you do anything else, it’s important to set goals for your marketing efforts. SMART goals — goals that are Specific, Measurable, Attainable, Realistic, and Time-Sensitive — are effective because you can tell whether you’ve achieved your goals or how far away you were from reaching them. You can then use this information to evaluate your demand generation strategies and determine new goals and strategies going forward.

The goal-setting stage of your marketing process is also a good time to establish which key performance indicators (KPIs) you plan to evaluate. 

The best KPIs for your brand will depend, in part, on the industry that you’re in. The best KPIs for nonprofits differ from the best KPIs for automotive dealers, for example. 

The KPIs you choose to evaluate will also depend on the goals you’ve set. If your goal is to generate 20% more brand awareness in the next quarter, you need a KPI that measures brand awareness, such as responses to brand awareness surveys. On the other hand, if your goal is to see 20% more traffic on your website, data from brand awareness surveys is not helpful. Instead, you’ll need to measure your website traffic for the number of visits over a period of time.

Keeping the KPIs you measure in line with your marketing goals will help you stay laser-focused on improving your brand’s marketing successes. 

Research your target audience

Since demand generation is data-driven, audience research is a large part of it. The more intimately you can get to know your target audience, the more likely you are to strike upon an idea that will resonate with their needs and values.

Start by determining who your target audience is (and isn’t). Creating a customer avatar or buyer persona can help you get a good feel for your target audience.

Once you know who your target audience is, you can use a variety of research techniques to get to know them better. This may include: 

  • Analyzing your competitors
  • Looking into industry trends
  • Using Google Analytics
  • Conducting surveys and interviews

Researching your audience can teach you about their values, their interests, and where they spend the majority of their time. When it comes to generating demand, this information is vital for determining what your audience needs and which ideas are likely to create buzz. 

Have a clear brand personality

The next step to creating a buzz around your brand is to decide how you want to communicate your brand’s personality. Is your brand hip, modern, and eco-conscious? Or are you traditional, upscale, and quality-focused?

Knowing how you plan to communicate your brand’s personality can help you make decisions that range from which filters to use on Instagram posts to which content pieces to create. 

example of brand personality
This is an example of a brand with a clear personality. Their goal — “designing waste out of the human experience” — has influenced their minimalist color choices, imagery, and overall content. Image source: Pela Earth.

As you determine your brand’s personality, keep in mind that tying some sort of social good into your brand’s personality may help you generate more sales. Roughly 13% of customers will pay 31% to 50% more for products from brands they think are doing positive things for the world. 

Create valuable content

On average, marketers spend a quarter of their budget on content marketing. The money is often well spent, as an estimated 80% of people appreciate learning about a brand by reading their content.

Content creation is a form of demand generation because it helps people who have never heard of your brand locate you for the first time. This is especially true when you focus on inbound marketing

With inbound marketing, your goal is to create content that solves a problem your target audience faces. Using keyword research, you can determine which questions your audience members are asking and focus on optimizing your content for those keywords. As your content crops up in response to search engine inquiries, you’ll find that your organic traffic will grow.

To make the most of content creation, try to curate a multimedia content presence.

Having a mix of written content, video content, and images can help you establish your authority on a subject. Additionally, as you interlink between different forms of content, you can naturally establish backlinks and enhance all of the content you create.

Use online reviews and influencer marketing

Social proof advertising can have a huge impact on demand generation. 

Asking for reviews and highlighting those reviews on your website is an easy way to generate demand using social proof.

Over half of customers read at least four reviews before choosing whether to buy a product. Making it easy for customers to find those reviews — and ensuring your products always have reviews attached — allows customers to feel more confident about their purchases before they buy. 

Using influencers to market your products takes your social proof to the next level.

When audiences see their favorite YouTuber or TikToker raving about a product, it’s natural for them to want that product as well. In fact, 6 out of 10 YouTube subscribers would be more likely to purchase a product recommended to them by an influencer than a product recommended by a traditional celebrity.

graph of social networks for working with influencers
There are many different ways you can work with influencers. Although Instagram remains a top choice, other social media channels — like LinkedIn and Twitter — are also effective ways to reach new audiences with influencers, as depicted in this graph from Influencer Marketing Hub.

If you don’t have the budget to work with top influencers, consider working with micro-influencers instead. While micro-influencers have a smaller audience than major influencers, their audience tends to be more engaged.

Ideally, your product will be high enough quality that the majority of your reviews will be positive. But when negative reviews do happen, how you handle those reviews can also tell your customers a lot about your brand.

More than half of customers expect brands to respond to negative reviews within a week. 

Responding to negative reviews can show your commitment to providing quality customer service and growing as a brand. This allows you to build trust with your customers, even when not all of your reviews are positive.

Grow your audience by focusing on demand

From the outside, demand generation campaigns look almost accidental. However, behind the scenes, a lot of work goes into creating a buzz around your products. This includes establishing clear goals, researching your target audience, creating valuable content, and using reviews and influencer marketing.

Setting SMART goals is a great first step to generating demand for your business. Once you’ve set your goals and determined some KPIs for measuring your success, you can begin collecting the data you need to put together strong campaigns that create a big demand for your product.