B2B Lead Generation

Customer Acquisition vs Lead Generation: The Difference?

Carter Edsall
by Carter Edsall / March 19, 2022

Carter Edsall is the founder of Brand Theory, a growth agency that helps businesses eliminate the guesswork from online marketing. Through a career spanning nearly 3 decades, he’s launched and marketed projects for household names like Nissan, Disney and Four Seasons — but remains passionate about helping small businesses scale profitably and predictably. He lives for food, wine, the outdoors and spending time with his family in beautiful Marin County, CA.

If you're like most businesses, you probably focus a lot of your marketing efforts on lead generation. After all, lead generation is what brings potential customers to your doorstep (or website) and without customers, you don’t have a business. But generating leads shouldn’t be your sole focus if you want to build sustainable growth. 


True growth comes from optimizing every stage in your sales funnel. Read on to learn why focusing your resources on customer acquisition versus lead generation is the key to building sustainable, profitable growth for your business. 






Customer acquisition vs. lead generation: What’s the difference? 

The process of moving someone (either an individual or a business) from being a stranger to a loyal customer goes by several names. Some call it the "buyer’s journey." To others, it's the "pipeline" or "funnel." The process may include just a few stages or many, and marketing and sales departments may own different parts. Regardless of what you call it, though, lead generation plays an essential role. 


Once buyers become aware of your brand in the aptly named Awareness stage, lead generation is the next step in the marketing funnel. During lead generation, brands look to earn buyers’ trust—and contact information—often by sharing educational content that helps them research the problem they are trying to solve.


When people convert at this stage in the process, they are called leads. Leads are often segmented into marketing qualified leads (MQLs) and sales qualified leads (SQLs). An SQL is someone who has moved past the awareness stage and is moving toward the bottom of the traditional sales funnel. They haven’t been sold yet, but are more likely to become a customer than someone who is just beginning their journey (an MQL). 


In the digital marketing arena, lead generation takes many forms, from cold calls to social media marketing to publishing blog content. Some tactics are labor intensive and others are high cost. In some cases, generating quality leads becomes not only a matter of efficiency, but economic survival. 


Customer acquisition is a process that includes lead generation, but spans the entire funnel. It takes time and effort to educate a prospect about your products or services, explain their value and convince a lead that your solution is the right one for the problem they are trying to solve. This is the process of lead nurturing and without it, leads are less likely to move forward. Once a lead becomes a customer, it only makes sense to maximize that investment with retention and revenue expansion tactics that increase the value of each customer. 





The AAARRR model (aka: "Pirate Metrics") illustrates a full-funnel customer acquisition framework. It includes the traditional sales funnel stages of awareness, acquisition (interest), activation (consideration), and purchase (revenue), as well as retention and referral efforts that increase customer lifetime value (LTV) and customer acquisition cost (CAC)—all keys to profitable growth.



Should your business focus on customer acquisition or lead generation? 

There’s no question that marketing is the department most often tasked with generating lead–building awareness and attracting potential new customers to your business. But strategies that focus on lead generation alone can cause your business to focus on the wrong KPIs. You may spend too much time and too many resources pursuing leads that clog your sales pipelines instead of fueling growth. A holistic approach that looks at every stage in the funnel will keep your marketing team’s goals aligned with those of your business. 


Growth marketing strategies rely on customer acquisition metrics to prioritize and improve the tactics that will have the most impact on your business objectives. Generating leads is a part of that process, but it isn’t the end goal—scaling sustainable, profitable revenue growth is.


How does growth marketing optimize customer acquisition? 

Because growth marketing is a strategic, data-driven approach to marketing, it enables you to power those parts of your funnel that will benefit you the most. Growth marketers don’t simply launch a set of generic strategies to bring in leads and hope for the best. They look at each stage of your funnel to identify weaknesses and opportunities. They validate tactics that are profitable, repeatable, and scalable. This creates a revenue engine with unlimited potential. 


Growth marketers still use lead generation efforts to fill the top of the sales funnel. Then they nurture those leads until they are sales-ready. Central to a successful growth marketing program is a customer relationship management (CRM) system that enables marketing, sales and customer success teams to collect and share data to better understand their leads and customers. Using this information, growth marketers can create content that speaks to buyers at every stage and moves them forward on their journey. 

A customer acquisition strategy for your business

Ready to stop spending money on marketing that doesn’t move the needle? Ready to engage buyers and move them into and through your funnel? Ready to measure, test and improve your way to exponential growth? Find out how an outsourced growth team can work with your business by scheduling a no-pressure, one-on-one SmartGrowth Session now. You’ll get a free growth game plan customized to your goals and a clear roadmap to results. It’s time to make profitable customer acquisition your superpower.








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