Have you ever wondered what the difference is between demand generation and inbound marketing ? What does each phrase mean for marketing and sales? Which approach should your company focus on? Is one more relevant or important than the other? If you find yourself scratching your head trying to hammer out the differences between demand generation and inbound marketing so you can execute, well, this post is for you.
Is There Really a Difference?
Demand Generation and Inbound Marketing are pretty similar at first blush, but don’t be fooled. Demand Generation and Inbound Marketing are very different.
Demand Generation is More Sales Centric:
Let’s call demand generation what it really is….. it’s really just a new approach to driving revenue with traditional outbound marketing approaches. There are some cool technologies that are improving on the last 50 years worth of demand generation best practices, but there is nothing really and truly paradigm shifting. It is the same type of outbound marketing practices that prospects are getting more adept at shutting out – think unwanted cold calls (these days called warm calls), email blasts, list buying, TV commercials, sponsored webinars and the like. The demand generation approach is really gravitated to by companies with sales driven cultures that place an emphasis on the cold call.
Inbound Marketing is More Marketing Centric:
Inbound Marketing is paradigm shifting and the strategies used to implement inbound marketing have been around for less than ten years. The real shift has only occurred in the past five years as blogging, true opt-in email, social media, and SEO have grown in popularity. Inbound marketing is all about creating content and viewing yourself, company, etc. as a publisher of content, that when combined with other inbound marketing best practices, can generate quality inbound leads for your business, inside and outside sales teams. Inbound marketing leads are also less expensive than traditional outbound marketing approaches to demand generation. This approach is adopted by forward thinking companies that place an emphasis on being where the marketplace is moving.
What is the Right Mix of Demand Generation and Inbound Marketing?
This is what I like to call a holy grail question – every organization will be starting from a different level of skill, attitude, and belief set so the mix will vary greatly from company to company. If we look at the data we can see that inbound marketing budgets are increasing and traditional outbound marketing budgets are declining. The marketing mix is shifting to inbound marketing and expect this trend to accelerate in the years ahead.
What Does it Mean for You?
The big idea is that for the vast majority of companies a budget focused on inbound marketing instead of traditional outbound marketing will be more than enough to improve revenue, bottom line profitability and make your job much easier.
Photo Credit: Garrett Albright
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Chad Levitt is an Inbound Marketing Specialist with HubSpot and author of the New Sales Economy blog that focuses on how sales 2.0, social media, and how inbound marketing can be used as a
sales strategy
for the Web 2.0 world. You can connect with Chad on Twitter
@chadalevitt
.
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Imperial Image 9:03 AM on June 17, 2010
Being a witness and practitioner of both the demand gen and inbound marketing, I agree that they need to collaborate together but I find more and more that my inbound marketing efforts payout with a greater return given my time invested.
Brian Gilbert 9:56 AM on June 17, 2010
I agree with Mike - the mix is important. I also don't know that some of the more traditional methods are as ineffective as the author would have us believe. Combine those methods within the context of the social media landscape, and your KoolAid is multicolored.
Patrick Gold 1:52 PM on June 17, 2010
Mind expanding stuff! Looking back over the last few years I guess we've all been slowly gravitating to the inboard marketing approach mostly because of technology changes and cost effectiveness....but how far should we go down this road and will the tide turn? Only time will tell.
Steve Watts 3:06 PM on June 17, 2010
The only difference I can see is that the "demand" is "generated" from either an indirect vs. a direct response.
"Marketing" creates demand through the subtle suggestion, "Look at us, we're a cool company, we have good products and services, maybe you should check us out the next time you're looking for the stuff we sell."
"Demand Generation" is simply more direct--"We think you, Prospect X, have a need, and we think we can fill it now."
MISSIcom 7:09 PM on June 17, 2010
I am an unabashedly great admirer (fan) of virtually everything that the Hubspot team has generated and the work that they do for clients, however, having been involved in technology business development on both sides of the pond for many years, while it may seem pedantic and even academic, I agree with Mike Damphousse that "Demand Gen (encompasses) every activity that is focused on creating, generating, capturing and converting prospects to leads in order for Sales to engage with them".
In fact, for any business that does more than just collect pass-through retail sales activity via the web, they most likely also have Operations and Supply-Chain concerns in which case Demand Generation is also a factor in "Sales and Operations Planning" (S&OP) hence use of terminology that may, in certain situations, actually be ambiguous can have an unexpected, unintended impact well worth avoiding. We all need to use words that convey consistent meaning to our audience, do we not?
Hence, for clarity, we still have the subsets of marketing under the umbrella term "Demand Generation" consiting of Out-Bound and In-Bound marketing.
How's that for TMI?
Aside from that, this is a great blog Chad: Thank you.