Although often used interchangeably, growth marketing and demand generation are distinct strategies that share some tactics and end goals. Understanding the differences between these two will help businesses implement customized solutions based on their marketing needs.
So, what are their unique features, and how do each contribute to the overall business success?
This guide will dive into all aspects of growth marketing vs. demand generation.
TL;DR – Growth Marketing vs. Demand Generation
How does growth marketing compare to demand generation?
The following table provides a quick way to understand their benefits and drawbacks.
| Growth Marketing | Demand Generation |
|---|---|
| Optimizes the customer cycle to increase revenue | Focuses on increasing brand awareness through educational content |
| Pros | Pros |
| - Focuses on improving the entire business - Building a strong strategy results in sustainable growth - Identifies unique opportunities that a business can leverage - Optimizes marketing costs for better ROI | - Increased brand awareness and helps attract new leads - Improves conversion rate at each stage of the marketing funnel - Helps nurture customer relationships and produce quality leads - Utilizes low CAC organic channels and produces high ROI in the long-term |
| Cons | Cons |
| - Takes time to build a growth strategy due to lots of unknowns - Complex and expensive to execute - Uses aggressive marketing tactics, which can sometimes annoy prospects | - Complex and requires thorough planning - Ineffective without proper budget allocation - Uncertain results due to the ever-changing market dynamics |
| Best For | Best For |
| Companies looking for growth in all the stages of the funnel | Businesses targeting the top of the funnel (TOFU) stage |
An understanding of both strategies is essential for marketing and growing a business.
For over two decades, I’ve partnered with businesses for their demand-generation campaigns that create genuine interest in their offerings.
Schedule an intro call to discover how we can collaborate to create marketing strategies that drive long-term growth.
What is Growth Marketing?
Growth marketing is a long-term strategy to increase a business’s revenue by improving consumer interaction and retention.
Growth marketers use different techniques to:
- Reach new prospects and retain existing customers
- Reduce customer acquisition costs (CACs)
- Test new marketing strategies
- Track KPIs and other metrics
- Improve conversion rates
Growth Marketing Example: Dropbox, a cloud storage solution, implements one of the most successful growth marketing strategies. Through its referral program, it grew from 100K to a million users, achieving a 3900% growth in 15 months.
What is Product Led Growth Marketing?
Product-led growth (PLG) marketing highlights the product as the company’s primary customer acquisition tool.
The PLG marketing strategy prioritizes the following:
- Easy Product Accessibility: Offering firsthand experience of the company products through free trials.
- Outstanding User Experience: Products are developed with the users in mind, resulting in an excellent value-driven user experience.
- Shorter Sales Cycles: Unlike sales-led models, the product-led strategy simplifies the complex onboarding processes and leverages customer feedback to improve products.
- Reduced Acquisition Costs: Excellent offerings and freemium models attract paying clients quickly, reducing marketing costs.
- Streamlined Onboarding: The focus is on personalization through targeted onboarding and customized user experience.
PLG Marketing Example: Slack, the communication channel, excels at utilizing PLG marketing. It provides in-app tutorials that teach users how to use the platform, offers a free plan, and has several customer feedback loops.
Growth Marketing Framework
The growth marketing framework guides businesses in experimenting with strategies, identifying the most productive tactics, and ensuring efficient execution.
Here are the 4 fundamental steps of creating one:
1. Define the Buyer Personas
Define customer profiles by analyzing demographics, geographic locations, and industry.
Segment and map out their journey to create customized messaging showcasing how the product or service will solve their needs.
2. Set Clear Goals
Setting specific goals ensures that all departments and functions use available resources to achieve the same result.
An example of a measurable goal is ‘increasing product sign-ups or landing page traffic by a particular percentage.’
3. Run A/B Tests
The next step is to conduct A/B testing to determine the most effective strategies for generating sustainable growth. Test various marketing assets, including landing pages, emails, CTAs, headlines, social media posts, and images.
Through message testing, marketers can see which variant performs strongly.
4. Measure and Refine
Collect relevant insights and KPIs, such as engagement and conversions, from the test to make necessary adjustments. Collaborate with all teams to refine marketing and improve products.
Ready to refine your growth marketing strategy?
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Join me on a call to build a winning framework that drives long-term growth.
What is Demand Generation?
Demand generation is a strategy that uses continuous, education-focused content to develop awareness and attract potential customers. The content highlights the prospects’ common pain points and positions the offering as the ultimate solution.
Unlike lead generation, which focuses on capturing qualified leads, demand generation primarily focuses on creating genuine interest (generating demand).
Common goals of demand gen marketing are:
- Establishing the brand credibility
- Improving search engine ranking
- Increasing exceptional inbound inquiries
Demand Gen Campaign Example: Canva, a graphic design tool, has continuously created brand awareness campaigns by offering free trials to allow users to experience their product and realize its benefits.
Most Effective Demand Generation Strategy
Businesses often debate on the most effective demand gen strategy.
Check out the 5 best strategies:
1. Freebies
Unlike lead generation, which heavily utilizes gated content, demand-generation tactics focus on capturing the audience’s attention and generating excitement for an offering with freebies, such as free trials and strategy sessions.
2. Educational Email Content
Email marketing is another low-cost, high-ROI demand-generation tactic. Businesses can implement email series or courses that showcase how the offerings solve the audience’s pain points.
They can also segment the email list to make the messages relevant to each recipient.
3. Social Media Marketing
While it’s competitive, social media marketing is a great tactic to increase brand awareness.
Businesses can mix organic social media posts with ads to build a consistent, cohesive presence across multiple channels and reach a large customer base.
4. Industry Collaboration
Guest blogging, influencer marketing, sponsorships, YouTube guest appearances, and podcast interview marketing can generate massive brand exposure and increase brand authority.
Demand Generation Best Practices
Here are the top 4 best practices to enhance demand generation efforts:
- Know the Buyer Persona: Conduct in-depth audience research to define the ideal customer profile (ICP). Understand their demographics, pain points, preferences, purchasing behavior, and goals. These insights lay the foundation of the entire strategy and facilitate the creation of targeted content across multiple channels.
- Develop a Content Strategy: Create a consistent messaging framework to guide the content across all marketing channels. Remember to segment the audience, test various content, make the content valuable, and repurpose performing content to maximize the reach.
- Use Automation Solutions: Use tools like Zapier and HubSpot to streamline, manage, and support marketing tasks across multiple channels, such as creating targeted campaigns, scoring leads, getting data reports, or performing A/B tests.
- Analyze the Campaigns: Evaluate and audit each campaign by tracking metrics like marketing qualified leads (MQL), sales qualified leads (SQL), cost per acquisition (CAC), sign-ups and activations, and customer lifetime value (CLTV). Remember to optimize ongoing campaigns with these data-driven insights.
Relevant Characteristics Between Growth Marketing and Demand Generation
Here’s a side-by-side features comparison of growth marketing and demand generation:
| Growth Marketing | Demand Generation | |
|---|---|---|
| Focus Area | Revenue generation and scaling | Creating interest in a brand and capturing attention |
| Goal | Growth in all stages of the funnel | Generate a consistent flow of leads that move down to the bottom of the funnel |
| Approach | Holistic and data-driven | Marketing and campaign-focused |
| Metrics | Return on investment (ROI), churn rate, retention rate, customer lifetime value (CLV), repeat purchase rate, conversion rate, monthly recurring revenue (MRR) | Brand sentiment, click-through rate, website traffic, marketing qualified leads (MQLs), cost per lead |
| Content Strategy | Personalized content that provides ongoing value to improve customer retention | Content to establish brand authority, drive traffic, and generate leads |
| Customer Lifecycle | Focuses on all stages from acquisition to loyalty | Focuses on the early stages to create awareness and interest |
| Collaboration with Sales | Cross-functional team effort | Primarily collaborates with marketing functions |
| Channels | Social media, email marketing, video marketing, PR, SEO, referral programs | Email marketing, webinars, content marketing, events, social media |
| Retention vs Acquisition | Optimizes acquisition and retention efforts | Solely focuses on acquisition efforts |
| Tactics | Run A/B tests, referral programs, personalization, and customer segmentation | Host webinars, offer valuable free resources, and utilize social media channels |
Similarities and Differences
Understanding the differences and similarities between demand generation and growth marketing is essential because they require different tactics.
Growth Marketing vs. Demand Generation Differences
These are the 5 clear distinctions between the two strategies:
- Focus: Growth marketing focuses on the whole funnel, while demand generation focuses more on the top stage of the funnel.
- Approach: While growth marketing aims to maximize the user experience, demand generation seeks to attract new customers mainly through educational content.
- Timeframe: Growth marketing strategies mainly rely on short-term tests and swift iterations, while demand generation takes longer to nurture relationships and leads.
- Key Metrics: Growth marketing mainly analyzes growth rate, while demand generation focuses on lead quality.
- Team Structure: While demand generation experts mainly focus on marketing, growth marketers typically collaborate in multiple roles, including product development and marketing.
Growth Marketing and Demand Generation Similarities
Check out the areas where the interests in these two areas overlap and where they work together:
- Customer-centric: Both approaches focus on understanding the customer needs and delivering value through different marketing efforts.
- Automation: Both heavily depend on marketing tools for audience research and targeting.
- Data-driven: Like growth marketing, demand generation utilizes data analytics to assess, scale, and optimize campaigns.
- Cross-functional: Both strategies encourage collaboration between departments, such as marketing.
What About Growth Hacking?
Growth hacking is an experimental mix of creative strategies that brands use to achieve rapid growth within a short period with minimal costs. It combines aspects of data analytics, marketing, and product development.
There are three main aspects of growth hacking:
- Content Marketing: Guest posts, hosting webinars, podcasting, and posting on appropriate forums are vital for a growth hacking strategy.
- Advertising Strategies: Implement PPC marketing and social media ads to expand the brand’s online presence quickly.
- Product Marketing: Leverage FOMO, limited sign-ups, referral programs, gamified onboarding, and affiliate marketing.
Bottom Line
Integrating demand generation and growth marketing strategies enhances conversion rates and customer retention.
Need help to implement a growth marketing strategy?
As a business growth consultant, I can help you create winning strategies that spark genuine interest and craft compelling messaging that drives meaningful connections. Through our collaboration, we will also capture high-quality leads, shorten the sales cycle, and formulate tactics that align with your business goals.
Book a discovery call to build an actionable strategy that steers your company toward sustainable growth.
Frequently Asked Questions (FAQs)
Below, we’ve answered frequently asked questions about growth marketing vs. demand generation:
Can Demand Generation Exist without Growth Marketing?
No.
The two concepts aren’t mutually exclusive. Other than sharing some techniques, demand generation is a subset of the broader growth marketing strategy.
What is B2B Growth Marketing?
B2B growth marketing uses data collected from marketing campaigns to drive sustainable, long-term growth and build strong relationships between businesses.
What is a Demand Generation Funnel?
A demand generation funnel visually depicts the customer journey from initial contact to conversion. The stages include awareness, interest, consideration, intent, purchase, and post-purchase experience.
