Revenue marketing vs. Demand generation: Key differences explained

There are two key approaches when you think about driving more business and new leads: demand generation and revenue marketing. These terms are not mere buzzwords but they represent distinct philosophies that guide how businesses attract, engage, and retain customers.

Understanding the nuances between demand generation and revenue marketing is crucial for businesses looking to align their organizational goals and maximize the impact of their efforts.

• What is demand generation?
• What is revenue marketing and how does it fit in?
• Revenue marketing vs. Demand generation: How are they different?
  • …when it comes to goals & objectives
  • …when it comes to metrics & measurements
  • …when it comes to integration with sales
• Combine demand generation & revenue marketing for a comprehensive strategy

What is demand generation?

Demand generation (also called demand gen) primarily focuses on creating awareness and interest in your product or service. It involves activities aimed at generating leads and filling the sales pipeline. It happens before hand-raising, and even before people know of your product. The goal is to create a broad audience that may show interest in what you offer.

Here’s what demand generation looks like for B2B companies:

• Content marketing: Creating and disseminating valuable content to attract and engage potential customers.
• SEO strategies: Optimizing online content to improve search engine visibility and drive organic traffic.
• Paid advertising: Utilizing paid channels like Google Ads and social media advertising to increase brand visibility.
• Email marketing: Building and nurturing relationships through targeted email and account based marketing campaigns.
• Events and webinars: Hosting or participating in industry events and webinars to connect with a broader audience.
• Lead magnets: Offering valuable resources or incentives to capture contact information and generate leads.
• Social media Engagement: Leveraging social platforms for brand promotion, engagement, and lead generation.

What is lead generation?

Lead generation goes a step further. It’s the process of attracting and converting prospects into someone who has indicated interest in your company's products or services. It often involves collecting a potential customer's information through various strategies and channels to nurture them into making a purchase.

What is revenue marketing and how does it fit in?

On the other hand, revenue marketing encompasses a broader spectrum. While it includes demand generation, it goes beyond the initial stages of the buyer's journey. Revenue marketing aligns marketing efforts with the entire customer lifecycle, from awareness and acquisition to retention and expansion.

Here’s what revenue marketing looks like for B2B companies:

• Full-funnel approach: Aligning marketing efforts with the entire customer journey, from awareness to advocacy.
• Lead qualification: Implementing robust lead scoring systems to prioritize and focus efforts on high-potential leads.
• Sales and marketing alignment: Ensuring seamless collaboration and communication between sales and marketing teams.
• Personalized customer journeys: Tailoring marketing campaigns based on individual customer behaviors and preferences.
• Customer retention strategies: Implementing initiatives to enhance customer loyalty and encourage repeat business.
• Closed-loop reporting: Establishing mechanisms to track and analyze the performance of marketing efforts throughout the sales cycle.
• Attribution modeling: Understanding the contribution of each touchpoint in the customer journey to revenue generation.

Revenue marketing vs. Demand generation: How are they different?

…when it comes to goals & objectives

While both are geared towards achieving business growth, they differ in their fundamental orientations and objectives.

Demand generation

In demand generation, the spotlight shines on immediacy and lead generation. The primary objective revolves around sparking instant interest and creating a substantial volume of leads. The emphasis here is on casting a wide net, capturing potential customers in the initial stages of their journey, with the ultimate aim of nurturing them into valuable conversions.

Your goals for the quarter may look like:

• Increased traffic: Drive traffic to specific channels, such as the website, landing pages, or social media profiles.
• Database growth: Expand the contact database for future marketing efforts.
• Audience engagement: Encourage interactions through social media, content engagement, or event participation.

Revenue marketing

Revenue marketing is inherently goal-oriented with a laser focus on driving revenue. Beyond the scope of lead generation, it tracks and influences the entire customer journey. The goal is not merely to accumulate leads but to create a strategy that guides prospects seamlessly from awareness to conversion. Every marketing initiative is a calculated step contributing directly to the overarching goal of revenue generation.

In contrast to the goals of demand generation, revenue marketing becomes concrete and has clear impact on revenue goals:

• Customer retention: Enhance strategies to retain existing customers and encourage repeat business.
• Lifetime value (LTV): Increase the overall value derived from each customer throughout their lifecycle.
• Cross-selling/Upselling: Promote additional products or services to existing customers to maximize revenue.
• Customer advocacy: Cultivate satisfied customers into advocates who recommend and endorse the brand.

…when it comes to metrics and measurement

Demand generation

Metrics for demand generation often include lead quantity, conversion rates, and cost per lead. The success of demand generation is typically measured by the number of leads generated within a specific period.

Some of your metrics for demand generation may be focused on top-of-funnel emphasis:

• Reach: Measure the unique number of users who have seen a particular post, providing insights into the actual audience reached.
• Impressions: Track the number of times a social media post is displayed, indicating the potential reach and visibility of the content.
• Content views: Track the number of views for different types of content, such as videos, blog posts, or infographics.

Revenue marketing

While revenue marketing metrics extend beyond lead generation. Success is measured by the impact on revenue, customer lifetime value, and the overall contribution of marketing activities to the company's bottom line.

Metrics for revenue marketing focus on:

• Marketing Qualified Leads (MQLs): Identify and measure leads that marketing deems as having a high potential to become customers based on predefined criteria.
• Sales Qualified Leads (SQLs): Evaluate the leads that the sales team has deemed ready for direct sales engagement, ensuring alignment between marketing and sales efforts.
• Conversion Rates: Track the percentage of leads that move through the conversion funnel, from MQL to SQL and, ultimately, to customers.

While both metrics give insights into your marketing efforts. Demand generation metrics primarily focus on short-term goals, emphasizing lead quantity, website traffic, and engagement, serving the marketing team's immediate needs.

In contrast, marketing revenue metrics take a more extended time horizon, aligning closely with sales objectives to track lead quality, conversion rates, and the actual revenue generated over time. Demand generation metrics may not always provide clear insights into revenue impact, marketing revenue metrics are designed to measure and attribute marketing activities directly to revenue outcomes.

…when it comes to integration with sales

Demand generation

In a demand generation scenario, the marketing team's primary objective is to attract a large volume of leads and pass them along to the sales team. This interaction is somewhat transactional, resembling a relay race where marketing swiftly hands over the baton (leads) to sales for further pursuit. For instance, a business running a social media campaign to drive sign-ups for a free trial might capture a broad audience, generating numerous leads for the sales team to follow up with.

Resources used for demand generation may be more general and include:

• Demo and trial requests: Encouraging leads to request demos or trial periods serves as a valuable resource in demand generation, allowing potential customers to experience the product/service firsthand.
• One-pagers and brochures: Concise and visually appealing one-pagers that highlight key product/service features and benefits are often used in demand generation to capture initial interest.

Revenue marketing

Conversely, in a revenue marketing approach, the collaboration between marketing and sales is more like a synchronized dance than a relay. Marketing doesn't merely hand off leads; instead, it actively participates in guiding prospects through the entire customer lifecycle.

For instance, marketing might deploy targeted content at various stages, nurture leads through personalized email campaigns, and equip sales with valuable insights garnered from customer interactions. This continuous collaboration ensures that marketing's role extends far beyond the initial lead generation, contributing to the overall revenue-generating efforts of the organization.

Resources used for revenue marketing:

• Customized case studies: Detailed case studies tailored to different buyer personas can assist sales teams in showcasing how the product/service addresses specific challenges.
• Interactive content: Revenue marketing often involves more engaging content, such as interactive presentations or calculators, to provide a personalized experience for potential customers.
• Collateral aligned with the buyer's journey: Sales may use collateral specifically designed for different stages of the buyer's journey, ensuring relevant information is shared at each interaction.

Demand generation may be more product-centric, emphasizing features and benefits to capture the attention of a wide audience. While revenue marketing adopts a customer-centric approach, understanding the needs and preferences of individual customers. It tailors marketing strategies to address specific pain points and challenges throughout the customer journey.

Combine demand generation & revenue marketing for a comprehensive strategy

Both demand generation and revenue marketing play vital roles in a comprehensive marketing strategy. The choice between the two depends on organizational goals, the nature of your product or service, and your desired depth of engagement with customers.

While demand generation focuses on creating demand and generating leads, revenue marketing takes a holistic view, aligning marketing activities with revenue goals and fostering long-term customer relationships.

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