Tuesday June 14, 2016
What is Account-Based Marketing (ABM)?
Account-based marketing (ABM) is one of the latest terms picking up steam in the B2B marketing community. While not an entirely new concept, ABM is both a complimentary and more targeted strategy than traditional demand generation.
ABM—when executed properly—is effective at helping firms create and sustain growth and profitability with both new and existing clients. Research from ITSMA found that over 80% of marketers who measure ROI say that ABM initiatives outperform other marketing investments.
Account-based marketing defined
Like most marketing concepts, the definition varies depending on who you ask. However, the underlying principals are consistent—ABM is a strategy focused on fewer, specific targets, as opposed to marketing to the masses.
Here’s a textbook definition of ABM provided by SiriusDecisions:
Account-based marketing (ABM) is a strategic approach marketers use to support a defined universe of accounts, including strategic accounts and named accounts. It also includes support for the post-sale customer lifecycle using marketing’s toolkit to contribute to the overall customer experience. ABM provides guidance on how to deliver the insights, goal setting, strategy and planning, integrated marketing execution, and sales alignment required to support growth, retention, and loyalty objectives. It also provides guidance on how to measure marketing’s impact beyond demand creation within defined groups of prospect and customer accounts. ABM helps to evolve the role of marketing to reflect a stronger alignment with sales objectives and customer needs to deliver better execution and revenue outcomes.
Engagio, an account-based marketing and sales software company offers up this succinct definition of ABM:
Account Based Marketing is a strategic approach that coordinates personalized marketing and sales efforts to open doors and deepen engagement at specific accounts.
While demand generation focuses on targeting specific personas or client types, ABM is hyper-focused on targeting specific personas at specific companies with which a firm wants to do business or is already engaged. It’s been described as fishing with a spear, as opposed to fishing with a net.
What B2B firms should consider ABM?
ABM is not a strategy that’s appropriate for all B2B firms. Those whose deals tend to be high-volume and lower-value in nature are better suited to a more traditional inbound approach. ABM, on the other hand, is ideally suited for B2B firms with long, complex sales cycles that often involve many stakeholders, and are typically high-value. These B2B firms are significantly less interested in appealing to the masses and tend to be much more laser-focused in their sales efforts.
Not just about marketing
At the heart of an ABM strategy is a close collaboration and alignment with a firm’s sales and business development efforts. Business development reps typically have their eye on landing specific clients and work to nurture relationships with those prospective companies through a number of activities. ABM works alongside of the sales team to assist in the nurturing of relationships. It’s a much more strategic and proactive response and creates a culture of alignment, breaking down traditional silos and ensuring that the marketing team is focused on the same priorities as the sales team.
Marketing to accounts, not leads
For the more complex B2B sale, it’s rarely ever one person making the ultimate decision. There are primary decision makers, of course, but there are also key influencers, end users, procurement departments and other stakeholders involved in the selection process as well. With that in mind, ABM focuses on the account or specific target client, instead of focusing solely on an individual lead.
“Salespeople talk about accounts, they talk about customers…they don’t talk about leads. Salespeople think about how they’re going to win accounts in the first place, then how they’re going to keep and grow those accounts.”
– Megan Heuer, SiriusDecisions
Aim small, miss small
ABM tends to be a more outbound exercise, as opposed to inbound. With ABM, you’re not waiting for target clients to land on your website, download an eBook and end up in your lead nurturing system. Instead, you put together a highly-personalized strategy (that leverages a myriad of demand generation tactics including content marketing, marketing automation, etc.) to reach out to your target clients directly. In a high-value, low-volume, complex sales environment, attracting masses of “top-of-funnel” contacts that may or may not be ideal prospects (or perhaps not a potential client at all) can often lead to wasted time and resources and low hit-rates.
Close more B2B deals with ABM
Because ABM focuses on specific target clients with high potential, marketing’s efforts are much more efficient and lead to better results. Research from Demandbase found that when firms leveraged ABM, it resulted in a 285% higher close rate for targeted enterprise accounts, and a 166% higher close rate for mid-market accounts.
Focusing on the entire client lifecycle
Retaining and growing existing client accounts is a top priority for most B2B firms, as repeat business is often the more desirable source of revenue. In fact, many B2B firms are increasingly taking a hard look at their Customer Lifetime Value and Customer Acquisition Cost metrics and are looking for effective ways to boost those numbers. ABM works to deploy marketing’s resources to assist. Instead of focusing solely on new clients as most traditional marketing efforts do, ABM focuses on leveraging marketing to grow existing clients as well.
It shouldn’t be either/or for B2B marketers
While some may see ABM as a replacement or alternative for demand generation marketing, ideally ABM is a complimentary marketing strategy that runs in conjunction with other broad-based marketing initiatives aimed at raising awareness and attracting unknown prospects. So there’s no need for firms to feel pressure to “pick a side;” rather your marketing strategy should be inclusive of divergent approaches. The truth is, demand generation and account-based marketing (or inbound and outbound to put it more simply) both have a place and serve different, yet important marketing needs.
Smart marketing is always en vogue
The fundamentals of modern marketing center around smarter marketing. This means relentlessly pursuing the right audience, with the right message and at the right time, all while adding value and seeking to influence the selection decision. ABM represents a potentially game-changing opportunity for B2B firms with high-value, lower volume and complex sales cycles to make a bigger impact in this pursuit by better aligning marketing and business development efforts and being more laser focused in their approach.