Is Demand Generation Different from Inbound Marketing?

If you’ve ever had trouble keeping marketing terms and concepts straight, you’re not alone. Many professionals use demand generation and inbound marketing interchangeably. Although these two concepts are similar, they are not identical. In this blog post, we’ll define both concepts, explain how they fit together, and teach you how to maintain a balance between the two strategies.

Inbound Marketing vs. Demand Generation

What is the difference between inbound marketing and demand generation?

Demand Generation

Demand generation is the process of driving awareness and interest in a product or service. It is a long-term strategy businesses use to secure loyal customers. Demand generation encompasses a variety of activities, including sales enablement, PR, paid media, advertising, and inbound marketing.

Demand generation has two primary goals:

1. Get people excited and aware of your product or service offering.
2. Cultivate long-term relationships with key prospects and customers that can help you grow.

Inbound Marketing

Inbound marketing is one type of demand generation strategy. It is the process of attracting, engaging, and delighting website visitors and leads with relevant, helpful, and engaging content. Inbound marketing has one overarching goal:

1. Convert strangers into customers and brand advocates by delivering the right content in the right place at the right time.

Because the goals of demand generation and inbound marketing are similar, it’s easy to mistake one for the other. However, treating these two concepts as one can hamper your marketing and sales efforts. If you forget that there are a variety of demand generation methods you can use besides inbound marketing, you’ll miss opportunities to accelerate your growth.

The Relationship Between Inbound Marketing and Demand Generation

If inbound marketing is only a single cog of the massive demand generation machine, why do people confuse them? It could be because all of the pieces of an inbound marketing machine impact how effectively you generate demand.

Inbound Marketing Directly Influences Demand Generation

The quality of your website content, how well you optimize it for search, and the way you promote it through email, marketing automation, and paid advertising directly affects how many website visitors, leads and customers you convert.

Using inbound methodology to direct your digital efforts allows you to focus on capturing your target audience’s attention in an engaging, rather than disruptive way. When executed successfully, inbound marketing activities accomplish the number one goal of demand generation: pulling people into your brand.

Inbound Marketing is Often the Most High-Performing Demand Generation Strategy Companies Use

Inbound marketing is all about nurturing leads into sales opportunities with relevant, helpful content. Studies show that warming up leads for your sales team with inbound content helps generate and, more importantly, sustain demand.

Nurtured leads make 47% larger purchases than non-nurtured leads. Companies that excel at lead nurturing generate 50% more sales-ready leads at a 33% lower cost. In other words, most demand generation programs need inbound to be successful.

When you use inbound marketing for lead generation, you can leave outdated, less effective methods at the door and focus on bringing in new buyers naturally.

Maintaining Balance Between Demand Generation Activities

Although inbound marketing is a proven, successful demand generation strategy, that doesn’t mean you should forgo tactics like sales enablement, referral marketing, and PR. All of these forms of demand generation serve a purpose.

• Sales enablement gets your marketing and sales teams working together and reduces friction in the buying process. A sales team armed with the right inbound content will serve prospects and customers better and bring in more revenue. 

• Referral marketing can harness the power of positive word of mouth to speed up the sales cycle and generate qualified leads quickly. Incentivizing your successful customers to tell others about you is an opportunity many companies miss, but one that can generate demand faster than inbound. 

• Intelligent PR elevates your brand, reaches more people in a short period, and helps build trust. Good press is especially helpful if you need to grow rapidly or impress investors.

Knowing when to use inbound marketing versus other demand generation efforts is the key to developing a successful marketing and sales engine that builds long-term customer relationships.

Why You Need a Healthy Mix of Activities in Your Demand Generation Program

Inbound marketing is the most organic way to generate demand for your product or service, but if you rely too heavily on this tactic, you risk underpromoting your brand and slowing growth.

On the other hand, if you forget about inbound marketing and only use PR, traditional ads, or referral marketing to create awareness, you’ll burn through your budget quickly without producing the quality and quantity of customers you need to grow.

How do you strike a balance? Let's take a look at a realistic example.

An Example of a Diversified Demand Generation Campaign

Let’s say your team creates a video addressing a specific pain point for your leads.

Instead of only blasting the video to relevant publications and magazines in your industry, you assess which mediums would be best for your audience.

You end up deciding to send the video with a press release to local publications but also use the video as a call-to-action in a follow-up email for a relevant content offer. Additionally, you promote the video on social media and add it to a few related blog posts that have seen a traffic dip.

This scenario demonstrates a situation where many demand generation activities come together to drive awareness and engage your audience.

In a perfect world, it would be easy for an organization to always have the right amount of inbound content for their demand generation efforts. Unfortunately, this isn’t always the case, so it is up to you to determine the best way to leverage inbound marketing in your demand generation program.

Need help with inbound marketing, sales enablement, PR, or demand generation in general? We’d love to chat about your goals. Schedule a free consultation with one of our experts today.