growth markeing vs demand generation

If you’ve ever asked, “growth marketing vs. demand generation: which will be best for my business?” You’re not alone. 

You can achieve your business revenue goals only if you have a solid marketing strategy. Unfortunately, several marketing strategies struggle to steal the spotlight. Demand generation and growth marketing experts come with tips and tricks, and different companies have used both approaches to grow their businesses or rebound from bad years. 

How can you differentiate between growth marketing and demand generation? Can each strategy cause a significant change in your business, or are they just words?

In this article, we’ll explore the meaning of growth marketing and demand generation and consider their similarities and differences. Let’s delve in. 

What is Growth Marketing?

Growth marketing is a data-driven marketing approach that focuses on one thing – growth. It utilizes several marketing tactics across different platforms to enhance customer acquisition, expansion, and retention. 

In growth marketing, businesses use intelligence systems and high-intent data to identify growth opportunities in every sector and optimize them as much as possible. 

The concept of growth marketing stemmed from growth hacking, which is finding new ways to grow by any means possible and with minimal cost. Growth hackers barely make long-term marketing plans. 

They only work with quick and creative methods. 

Unlike traditional marketing strategies that create awareness and generate leads, growth marketing takes a holistic approach by utilizing data and focusing on activities that yield the highest conversions to employ them for the next campaign. How does this work?

Growth marketing works with the Pirate Funnel (AAARRR… do you understand?) to create awareness, generate leads, and increase all growth metrics. 

growth-hacking-pirate-funnel

Source: GrowWithWard

  • Awareness: Increasing the number of people that know your offer
  • Acquisition: Converting site visitors into leads
  • Activation: Nurturing the leads and determining if they can convert to sales
  • Revenue: Turning high-quality leads into paying customers
  • Retention: upselling and ensuring that customers repeatedly use your product or service
  • Referral: Using your current customer experiences to generate new leads and gain more customers. 

Growth marketing uses awareness, acquisition, and activation to draw customers in and see the value of their offer. Then, it uses revenue, retention, and referral to keep these customers in the loop. 

Every great business that has stood the test of time has a solid growth marketing strategy focusing on revenue generation, retention tactics, and referral campaigns. That is the only way to create a sustainable, long-term business. 

What are common growth marketing tactics? 

  • SEO optimization
  • Blog content repurposing
  • Lead magnet creation
  • Automated email marketing campaigns using high-intent data

What do Growth Marketing Teams Do?

The ultimate goal of a growth marketer is to acquire customers and sustain their brand loyalty for as long as possible. Therefore, the growth marketing team uses data analysis and automation to remove any obstacle on the buyer’s journey. 

They work with different tactics and utilize several data to develop actionable insights that could increase your business revenue and expand your customer base. 

Growth marketers are risk-takers. They’re not afraid to try something new, even in the glaring face of failure. If it doesn’t work out, they re-strategize and try other possibilities as long as they don’t exhaust their marketing resources. But if it goes the way they want it, the company benefits. 

Everyday tasks of growth marketing teams include: boosting product retention, removing obstacles that distract prospects from buying products or services, content optimization, creating landing pages for SEO and PPC campaigns, and targeted email marketing campaigns. 

What are Standard Growth Marketing Metrics?

Here are standard metrics marketers use to measure the effectiveness of growth marketing strategies: 

  • Increase in site traffic
  • Great retention statistics (cross-sells, upsells, and churns) 
  • Increase in the number of direct and indirect customer referrals
  • Marketing-qualified leads
  • Sales-qualified leads

What is Demand Generation?

Like growth marketing, demand generation is a data-driven marketing approach that creates demand for products and services. It’s often confused with similar buzzwords like lead generation, inbound marketing, and growth marketing. 

But it’s none of them. It simply informs people about an offer, tell them how that offer will benefit them and is there every step until they make a purchase decision. 

Demand generation entails finding the target audience, identifying their customers’ pain points, figuring out how their offer can solve their problems and stand out from competitors, and projecting their brand as the right solution provider. 

The typical demand generation process involves creating informational content across all relevant platforms to interact with potential customers and look out for high buyer intent at strategic points over time, using the right omnichannel marketing strategy. According to Hubspot, over 82% of marketers use content marketing to reach their target audience. 

The goal is not just to create awareness but to establish a relationship between the brand and the consumer to build trust. When people see you as an authority or reference in your field, you’ll naturally be a go-to option when they have pressing needs. 

Demand generation works with a sales funnel and creates content that caters to every stage of that funnel. The content created at the TOFU stage isn’t the same as that created at the BOFU stage. 

Demand gen funnel

At the TOFU stage, you’re creating awareness and inspiring genuine interest in people, even those who had never considered that product. Blog posts and primary informational video content serve this stage well. But at the BOFU stage, you can develop deep-seated content like whitepapers, case studies, and webinars. 

While recurring revenue and referral campaigns are focal points, demand generation aligns both sales and marketing teams to focus on predicting an accurate sales pipeline. This marketing strategy focuses more on reducing the sales cycle than on long-term growth. 

What do Demand Generation Teams Do?

Demand generation teams focus on exploring new markets, curating content for the target audience, attracting leads, sparking their interest, and keeping them invested. 

A demand generation team consists of experts identifying the target audience and new markets, observing buyer preferences, and knowing the appropriate advertising strategies to achieve their marketing objectives using analytical and automation tools. 

Here are the six common roles in typical demand generation teams: 

  • Vice President of Demand Generation: The VP oversees the implementation of the demand generation strategy
  • Director of Demand Generation: manages the sales and marketing teams and delegates tasks. 
  • Content Strategist: responsible for the content plan to promote the brand and the strategy for spreading it across different channels 
  • Marketing Operations Manager: supervises the tools and technologies used to run data-driven marketing campaigns.
  • Copywriter: writes and edits copy for the brand
  • SEO Specialist: supervises SEO content and campaigns 

If your business can’t afford such dedicated teams, consider outsourcing your campaign to an excellent demand generation marketing agency like FrescoData. 

Standard Demand Generation metrics

Here are some demand generation metrics to consider

  • Conversion rates
  • Cost per acquisition
  • SQLs and MQLs
  • Average deal size
  • Cost per lead
  • Customer lifetime value
  • Close rate

Growth Marketing vs. Demand Generation: What are the Similarities?

It’s easy to confuse growth marketing with demand generation, not without a cause. Both marketing strategies are nearly identical. Here are some similarities to consider

Both are data-driven

Both marketing approaches use data to run successful campaigns. They measure specific metrics and KPIs and track progress on daily, weekly, and monthly actions. 

Targeting ideal customers

Demand generation and growth marketing work with buyer intent data. They are data-driven marketing approaches focusing on targeting idea customers instead of spreading marketing efforts hoping to hit the right target. 

Both strategies create content and lead magnets to attract prospects and predict a sales pipeline. 

They align marketing and sales teams.

In both marketing approaches, marketing and sales teams collaborate to develop a plan to attract leads, convert them, and generate revenue for the company. 

Growth Marketing vs. Demand Generation: What is the Difference?

Demand generation is different from growth marketing for the following reasons: 

growth-markeing-vs-demand-gen

One focuses on growth, and the other focuses on revenue.

As the name implies, growth marketing focuses on growth, but demand generation focuses on revenue. This fact doesn’t mean demand generation doesn’t consider growth, but most strategies aim to shorten the sales cycle. 

Now, does this imply that more revenue doesn’t lead to growth? Not always. While revenue is a core element of growth, it’s possible to boost revenue without experiencing any significant increase in other growth metrics. 

Growth marketing optimizes all components of the pirate funnel (AAARRR) to lower customer acquisition costs and build brand loyalty. If you look at the AAARRR growth marketing funnel, the three As focus on changing ideologies and helping customers see the brand’s value. At the same time, the three Rs sustain those customers and use their experiences to bring new people on board. 

Structure of teams

Companies rarely have dedicated demand generation teams because they spread across the board, from the strategy, content, and creative teams to the lead nurturing and sales teams. In most cases, small marketing teams handle all these responsibilities. 

Growth marketing teams, however, work cross-functionally. A typical growth marketing team comprises marketers, designers, developers, copywriters, content creators, and operation managers. 

Some companies build more internal growth marketing teams. Still, it’s better to outsource to an excellent growth marketing agency with a dedicated team so that you can free up time to focus on more critical aspects of your business. 

They have different referral and retention systems. 

Growth marketing focuses on building sustainable businesses, while demand generation focuses on short-term sales. This fact doesn’t mean demand generation doesn’t include retention in its strategy, but it’s not a big priority compared to growth marketing. 

Demand generation creates interest in a product or service. The business positions itself as an authority, providing relevant information to prospects and answering any related questions. 

Demand generation is a continuous process because people most likely won’t pay attention the first time. Marketers consistently create content to draw people in, and the cycle starts all over again when they make a purchase. Demand generation focuses more on getting new customers than upselling and referrals. 

Growth marketing, on the other hand, focuses on both aspects equally. Marketers realize that sustainable businesses can’t extensively depend on getting new customers all the time. At some point, your customer base must be solid enough to bring in new customers through referrals and support your business, even if you never rerun a sales ad.  

Growth Marketing vs. Demand Generation: Which Should You Choose?

There is no clear-cut answer to this. Companies have used both strategies to expand their customer base and increase revenue. Therefore, choosing the best approach depends on your business growth. 

In most cases, demand generation is essential for early-stage businesses that want to create awareness for their products and services. But growth marketing helps companies that have already spread awareness to build a sustainable ecosystem and foster long-term growth. 

Both marketing approaches can work simultaneously. 

Let FrescoData choose the Right Marketing Strategy For Your Business.

FrescoData is a data-driven digital marketing company that offers business data, consumer data, and customized marketing solutions to find the ideal target audience and generate revenue. We have the best automated and analytical tools to mirror offline and online digital campaigns through demand generation or growth marketing to give you the best results. 

Do you know the best part? We never compromise privacy. 

Contact FrescoData today and let us help you choose the marketing strategy that yields results.

Recommended Posts