What is Account-Based Marketing? Should You Use It?
What is all the talk about account-based marketing (ABM)? Is it another flash-in-the-pan buzzword or is it here to stay? And should your team invest the time to learn and implement it?
For starters, let’s explain what it is. At a high level, account-based marketing (ABM) is a concentrated and personalized approach to B2B marketing in which marketing and sales work together to focus on a clearly defined set of best-fit target accounts with the ultimate goal of deepening engagement and turning them into long-term customers. ABM has become popular among B2B marketing and sales teams in more recent years because, when done well, it is highly effective for not just engaging (and hopefully closing deals) with enterprise accounts, but also expanding relationships with existing customers.
ABM has changed the way many B2B marketing and sales teams operate. It’s no longer about marketing generating as many leads as possible then handing them over to sales. With ABM, marketing and sales becomes a team effort, involving marketing and sales (obviously), as well as customer success, product, and leadership. It’s a collaborative approach in which teams first identify their ideal customer profile (ICP) then prioritize their list of target accounts based on the revenue potential, fit, intent to purchase, and level of engagement.
Casting a net for one
Many have used the fishing analogy to describe ABM: Instead of trying to get thousands of fish into your net, then qualifying them, you focus your efforts on one fish or one big whale. This whale is not only a great fit for your organization, they also have the greatest potential to expand their relationship with you over time.
We like how Joe Chernov, VP of Marketing at InsightSquared, describes ABM: “ABM aspires to be ‘zero-waste’ marketing.” Rather than churning and burning through leads, you’re qualifying them first and deliberately developing campaigns to build relationships with those ideal accounts –– and many times, those campaigns are geared toward a market of one.
Often, organizations will tier or segment accounts based on the above mentioned criteria (fit, intent, and engagement) to determine the right type of campaign for that account. These high-level segments typically fall into one of three buckets:
- One-to-many
- One-to-few
- One-to-one
Accounts won’t stay static in those buckets. As intent and engagement fluctuates, so too will the type of campaign you deploy. For instance, if you are trying to establish brand awareness among an identified group of accounts, you’ll likely start with the one-to-many approach, perhaps deploying targeted digital ads with tailored messaging based on what you know about these accounts or specific keywords you know they are searching for. As their engagement deepens, they might move into the one-to-few campaign in which your messaging is more personalized based on engagement data (content or information they’ve consumed or shown interest in on your website). In the one-to-one, this is a no-holds-barred approach to personalization. Messaging and outreach will be tailored specifically to that account and the individuals in the buying committee.
ABM is essentially a very customer- or account-centric way to market that creates value (for all involved) and deeper engagement, and to that end, results. But it’s not for everyone.
What types of organizations use ABM and why?
Because ABM is personalized and deliberate, it naturally requires more resources, and often an organizational shift. The juice has to be worth the squeeze. With that in mind, it’s particularly effective in B2B where products and services tend to have longer sales cycles and larger deal sizes. ABM is also effective when the accounts you are targeting have buying committees with multiple decision makers involved in the process. In other words, you’re not targeting a single buyer but have to influence multiple people within in the company –– which is common, when the stakes are higher.
Because effective ABM involves account-level personalization, it can be a heavy lift for many organizations to get off the ground. In the early days, ABM was a challenge for most organizations to implement and practice at scale. Though it still requires a significant amount of work, through trial and error, many teams have defined best practices and luckily shared those with the rest of the world. ABM technology tools have also become more prevalent and have taken a lot of the manual processes associated with ABM out of the equation. This has enabled teams to implement ABM without as much of a drain on the resources and has made it easier to scale much faster.
So, why are organizations using it? Here are a few stats:
- 87% of B2B marketers agree ABM delivers higher ROI than other marketing activities (ITSMA)
- Companies with aligned sales and marketing teams realize, on average, a 32% annual revenue growth rate. Those that aren’t aligned go the opposite direction, experiencing a 7% decline (Forrester Research)
- 30% of marketers using ABM strategies reported a 100% engagement increase among their C-level targets (SiriusDecisions)
- 91% of marketers using ABM have reported larger deal sizes, with 25% reporting deal sizes more than 50% larger (SiriusDecisions)
These are just a few of the stats pointing to ABM’s effectiveness. ITSMA also points out how ABM drives results in three important areas of marketing, what they term “The three Rs of Marketing.” These are reputation, relationships and revenue. That said, ABM is a long-term strategy geared toward creating long-term success versus short-term revenue gains.
In the next post, we’ll cover how to determine if you’re organization is ready for ABM, particularly since it is a more involved process.
For greater detail on what ABM is, check out these resources:
