Ever wondered which marketing strategy is right for your business: demand generation vs demand capture?
While both concepts drive sales, each focuses on different stages of the customer journey and uses unique tactics.
Demand generation includes the things you do to create demand for your service or product among potential customers.
Conversely, demand capture is a marketing strategy that targets customers who are already in the market and ready to buy.
In this article, we'll explore the difference between demand generation vs capturing existing demand. We'll also share how they complement each other to improve your marketing results.
Ready? Let's get started!
What is demand generation?
Demand generation focuses on strategies you use to create interest in your product or service to convert potential customers into paying ones.
It covers everything you do to capture the attention of audiences who are unfamiliar with your brand and its offerings. This approach involves identifying the pain points of your target customers and providing solutions.
The process involves building or increasing awareness and creating demand for a product or service. You can achieve this by providing valuable information that highlights the need for what you offer.
So, what's the role of demand generation in creating market awareness?
How does demand generation target potential customers?
Demand generation targets potential customers unaware of a product or service by creating awareness and interest through strategic marketing efforts.
It involves selecting a target audience, understanding their needs, and using the information to create relevant content that will resonate with them.
This content is distributed through various channels like social media posts, blogs, and infographics to educate potential customers about the benefits and value of the offerings.
Additionally, demand generation uses tactics like SEO and influencer outreaches to increase visibility and attract new audiences.
This means you can create informative and engaging content to guide your potential customers through their buying journey and convert them into paying customers.
Here's an example to help you understand what demand generation does to create awareness about a product:
When a SaaS company creates a new type of project management software, they often find ways to create a demand for the tool.
They can decide to launch a content marketing campaign and create a series of blog posts, eBooks, and webinars that highlight the challenges of managing remote teams.
These resources educate potential customers on the advantages of using project management tools to improve workflow and team collaboration. This way, the company builds awareness and interest in their software, creating demand among businesses looking for solutions to improve their remote work efficiency.
Now, what are the effective tactics you can use for demand generation?
What are demand generation tactics for targeting potential customers?
If you want to reach your potential customers, build interest for a service or product they aren't aware of, and drive customer acquisition, try out these key tactics:
- Content marketing: This is a primary inbound marketing strategy in demand generation.
It deals with creating informative and valuable content like blogs, videos, infographics, and other content types to attract the attention of an audience and educate them about your offerings. With this strategy, you can establish your brand as a thought leader on the subject you're focused on and earn the trust of your target audience.
This method helps capture prospects' interest and stirs up the desire to learn more about your brand.
Hubspot offers free resources to its prospects.
Surfer provides free SEO resources via blog posts.
- Search engine optimization (SEO): SEO puts you in the face of your potential customers. It's a lead generation strategy that focuses on optimizing content for search engines so your potential customers can easily find you.
This formula works by using relevant keywords and improving your website structure so you can increase your visibility on the search results pages and attract users who are already searching for solutions that are related to your products.
Mailchimp targeted the keyphrase “Content marketing” for demand generation.
- Social media marketing: Another effective demand-generation method is social media marketing. You can use your social media platforms to reach a broader audience. You can achieve this by sharing engaging content and interacting with your followers and page visitors. This will enable you to build a community of loyal followers around your brand.
Also, social media lets you perform targeted advertising so you can effectively reach a specific demographic.
Sharing engaging and relevant content can help you generate demand.
- Influencer outreach: In this strategy, you partner with influencers in your niche or industry to project your brand's message and reach.
These influencers can introduce and promote your brand as a solution to a specific problem (or problems) in your niche. This way, they will build interest in their followers and persuade them to subscribe to your service or buy your products.
This strategy works well because their followers can easily relate to them and trust their recommendations.
Examples of influencer marketing.
What is demand capture?
Demand capture deals with the actions you take to make prospects choose you over your competitors.
It's a marketing strategy focused on converting potential customers in your target market actively seeking what you offer.
The goal is to capitalize on existing demand and generate revenue from low-friction prospects ready to buy.
This method seeks to increase ROI by efficiently converting warm leads into short- to medium-term revenue.
Demand capture integrates seamlessly with the sales funnel by focusing on the later stages of the buyer's journey.
Here's how:
In demand capture, you look for prospects that need what you have to offer. At this stage, you're not about to convince them to recognize a need. Instead, your goal is to make them choose you over your competitors.
Unlike demand generation, demand capture is about converting existing demand into revenue by engaging with prospects actively exploring their options.
How do you find these ready-to-buy prospects?
This is where Warmly steals the show. Warmly enables you to identify and classify the individuals and companies that visit your website. The tool scouts different sources to provide you insights on potential leads who have shown interest but have not yet converted. This way, you can send them personalized follow-up messages, special offers, discounts, and other promotional deals.
What are the key tactics to adopt in demand capture?
- Pay-per-click (PPC) advertising: PPC is lead conversion-focused and lets you target specific audiences based on locations, relevant keywords, and demographics.
This method ensures you target the audiences actively searching for what you offer, and this can increase your chances of converting them almost immediately.
Examples of PPC advertisements in Google search
- Retargeting: You can retarget prospects who have previously visited your website or engaged with your posts on social media. With retargeting, you'll repeatedly remind them of your offerings, encourage interaction, and increase your chances of converting them into customers.
This method works by displaying your ads to these audiences via different channels to remind them of their initial interest and persuade them to complete a purchase.
Additionally, retargeting increases your brand visibility and keeps your business top of mind of your target audiences. This way, prospects are more likely to choose your brand when they are ready to buy.
An example of a Clickup ad on Youtube.
- Conversion rate optimization (CRO): This involves optimizing various aspects of your website to enable you to convert a higher percentage of your visitors. You identify and eliminate things that can prevent conversations and tailor your website experience and offerings to meet the needs of your audience.
For example, you can optimize your landing pages and call-to-action (CTA) strategies to increase your lead conversion. Furthermore, you can also experiment with other strategies and see how they perform in terms of lead conversion.
- Social media advertising: Social media marketing provides tools to monitor your engagement metrics, conversion rate, and overall campaign performance. This will help you learn how well your strategies are performing and point out the areas to make necessary adjustments to improve their performance.
Also, social media provides a channel for promoting special offers, discounts, and other promotional deals. You can create urgency through time-sensitive deals and motivate prospects to take immediate action.
Examples of social media posts that promote discount offers.
What happens when you integrate both strategies? Let's find out.
How do demand generation and demand capture complement each other?
Demand generation and demand capture are both effective marketing strategies that can significantly boost the effectiveness of your business's sales funnel.
Demand generation has a sole aim– lead generation and demand capture focuses on lead conversion.
When combined, demand generation and demand capture provide a holistic marketing approach that addresses every stage of the customer journey.
Let's explain further how they complement each other.
Engaging customers throughout the buying journey
As stated earlier, demand generation seeks to build awareness, attract potential customers, and educate them about their needs and the solutions available to help.
This phase is crucial if you're looking to build or increase your brand recognition and establish trust.
For instance, you're adopting demand generation when you use content marketing, social media campaigns, and influencer outreach to create interest in audiences who are yet to recognize their need for your product or service.
On the other hand, demand capture targets prospects who are already aware of their problems and actively seeking solutions. This strategy uses tactics like pay-per-click (PPC) advertising and retargeting to engage these high-intent individuals.
With these two strategies, you will engage with prospects at every stage of their journey, from initial interest to final purchase.
So, demand generation creates a steady flow of new leads, while demand capture ensures that those leads are effectively converted into sales.
Creating a sustainable pipeline
Demand generation helps you to build a pipeline of potential customers. As you constantly educate and nurture leads, you'll maintain a consistent flow of prospects who may turn into customers.
This long-term strategy will help you avoid stagnation, expand your market reach, and prepare you for future opportunities.
Conversely, demand capture deals with turning these leads into actual sales. When you target individuals who are already interested and ready to buy, you can make immediate sales needs and also benefit from the groundwork and effort of demand generation.
With both approaches, you'll gain sustainable growth by balancing the need for short-term revenue with the importance of building long-term customer relationships.
Maximizing marketing efficiency
Integrating demand generation and demand capture strategies will enable you to achieve a higher return on your marketing investments.
Demand generation expands your audience reach via creating awareness and interest, while demand capture ensures that most of those interested prospects are converted.
This way, you don't need to over-rely on one strategy but smoothly transition audiences from awareness to purchase decisions.
Balancing short-term and long-term goals
Demand capture often delivers quicker results by converting leads who are ready to make a purchase. This immediate revenue generation is vital for business sustainability.
But, relying solely on demand capture can lead to a narrow focus that neglects the need to nurture future customers.
In contrast, demand generation emphasizes the need to build long-term relationships by constantly educating potential customers. With these sustained relationships with potential customers, you can ensure steady streams of leads over time.
A balanced approach that combines both strategies lets companies achieve immediate revenue while also investing in future growth. This balance is crucial to help you stay ahead and relevant in the market.
Sales funnel optimization
While demand generation fills the top of the funnel, demand capture converts the bottom of the funnel.
Demand generation ensures the top of your funnel remains consistently full. This strategy provides a steady inflow of prospects, and demand capture focuses on not letting interested prospects slip away without converting.
And if the top of your funnel is underperforming, demand generation helps boost visibility and lead generation.
Plus, if the middle or bottom of your funnel is where leads stall, demand capture optimizes conversion efforts through tailored campaigns to convert them.
Let's see an example of how they work together:
Let's say a retail software company, Xenia, uses demand generation strategies to publish how-to guides on optimizing multi-location staff scheduling, attracting interest from retail managers who will learn about the importance of staff scheduling software and become interested in trying out the software.
As these leads show intent, demand capture uses strategies like free trial offers or discounts to speed up their conversion process by letting them try out the software's features.
Examples of successful integration
Several businesses exemplify the successful integration of demand generation and demand capture:
Simultaneously, they use targeted PPC campaigns (demand capture) to convert leads who are actively searching for marketing solutions. This dual approach not only builds brand awareness but also drives conversions.
You can check out how Hubspot creates great ad copies.
- Salesforce: Salesforce uses a comprehensive approach by providing valuable resources and tools that educate users about CRM solutions (demand generation).
Salesforce offers educational materials to attract prospects.
They also use targeted email marketing campaigns to engage leads who have shown intent to purchase (demand capture), this ensures that interested prospects receive the information they need to convert.
- Adobe: Adobe adopts an integrated strategy by offering extensive tutorials (demand generation) to attract users to their software. Once users are engaged, Adobe uses targeted ads and personalized follow-ups (demand capture) to convert these leads into paying customers.
Adobe offers free resources to attract users.
When to focus on demand generation vs demand capture?
You'll need to know when to focus on demand generation vs demand capture to optimize your marketing strategies effectively. This is because each approach serves distinct purposes and is influenced by factors like business goals, marketing priorities, industry trends, and customer behavior.
Below are some scenarios that will need you to focus on demand generation:
- When you launch a new product: When introducing a new product or service, you need demand generation strategies to create awareness and educate your potential customers about the product's benefits. This is primarily important if the product addresses a problem that your target audience is yet to identify.
- When expanding into new markets: If you plan to enter a new geographical area or demographic, you'll need to generate demand to build brand recognition and attract a new customer base that may not be familiar with the offerings and their benefits.
- When you aim to build a long-term brand image: If you want to establish your company as a thought leader in your industry, you should focus on demand generation. This includes creating valuable content that educates and engages potential customers and builds trust and loyalty.
- When you notice a change in customer behavior: If you notice a shift in your consumers' preferences or behaviors, you can adopt demand generation tactics to help you re-engage customers and inform them about new solutions that meet their current needs.
Let's see the situations that will require you to focus on demand capture:
- High-intent prospects: When targeting individuals or businesses that have already shown interest in your products or services, you need to use demand capture strategies. This strategy focuses on converting leads already set to buy, thus shortening the sales cycle.
- Established products in competitive markets: If you sell well-known established products, especially in industries with many competitors, you can focus on demand capture to drive immediate sales. In such industries, customers are already actively looking for products or services similar to what your company offers.
With demand capturing efforts like running targeted ads, and optimizing landing pages, you can attract these ready-to-buy customers who are set to make purchase decisions and make faster conversions.
- Seasonal promotions or time-sensitive offers: Demand capture is highly effective at conversion during certain periods like holidays, seasonal events, or promotional campaigns (like Black Friday or a product launch). You can use highly targeted marketing campaigns like limited-time offers, discounts, or exclusive deals to capitalize on the urgency or heightened interest during these times.
- Post-engagement follow-ups: After you win the initial interest of your potential customers through demand generation efforts, you should pivot to demand capture to nurture these leads and convert them into customers. You can effectively follow-up your leads with tools like Warmly. Warmly automates outreach through various channels like Email, LinkedIn, and Chat. With this, you can engage with prospects across the channels they prefer. Plus Warmly can also help you send personalized messages and follow-ups automatically.
Demand generation vs demand capture: how to get started.
Choosing between demand generation vs demand capture depends largely on your business goals, industry, and customer behavior.
However, you need an integrated marketing strategy to strike a balance and avoid relying extensively on one approach as both strategies complement each other.
You can evaluate your current strategy to see if you need to make some adjustments.
If you're yet to figure out how to start the whole process, you can connect with companies like Warmly to help you get started with your demand generation and demand capture process.
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