Wondering what account based marketing is all about? ABM can be an incredibly valuable B2B marketing strategy for the right kind of business. But the key to success is having a clear understanding of what differentiates ABM from other inbound approaches, and developing a strategy to maximize its benefits for your business.
Here’s all you need to know to get started:
What is Account Based Marketing?
Account based marketing (ABM) is a way of selling to businesses that involves targeting accounts instead of individual sales leads.
This isn’t your typical B2B lead generation strategy. With most of the businesses B2B marketers target, there are numerous people throughout the organization who can communicate with and influence a purchasing team. ABM focuses on understanding the unique personas of each of these influencers and marketing to all of them in a way that can turn the business account into a customer.
It’s not just about delivering the same marketing message to different people — the goal is to understand the viewpoints different personas might have and adapt your marketing strategy to their perspective.
ABM vs Traditional Inbound
Lots of people get confused about the real difference of ABM compared to traditional inbound strategies because it utilizes a lot of the same sales and marketing approaches that have worked in B2B for years. The only difference is that the goal is to target and convert accounts. So the people, technology and strategy are all optimized for this approach.
Most traditional inbound marketing strategies start by gathering a pool of potential leads, filter down to the best candidates, then target their company. With ABM, you start by identifying the best companies and target them from the beginning.
When discussing the differences, most marketers liken inbound marketing to net fishing and ABM to spear fishing. Instead of catching a bunch of minnows in a net, you seek out the biggest, most valuable fish and take them home.
Why Go for Account-Based Marketing?
ABM isn’t a breakthrough approach that all B2B marketers need to adopt to succeed. It’s relevant and effective for certain types of B2B businesses. Specifically, it’s most valuable for businesses that have long sales cycles, expensive products, or complex products/services.
If your product costs a lot of money or would require your customers to make some serious overhauls to utilize and benefit from it, ABM makes sense as an approach. You need to convince business leaders of the value of your products using numerous channels. ABM does this.
That said, targeting numerous personas with a unique marketing message takes a lot of investment. B2B businesses selling simple products (e.g. Dropbox Business or similar tools) are much better off casting a wide net than going spear fishing.
If your business has the potential to earn a lot of money from individual companies, then ABM is a good approach. You’re prioritizing quality over quantity — reinvesting to convert more valuable accounts that can earn you revenue.
This is even more important when you have opportunities to upsell and earn more from your current customers. ABM isn’t just about targeting individual businesses, it’s also about expanding with current customers to earn more. If your product/service structure offers ample opportunities to upsell or cross sell, ABM can be very valuable.
The Benefits of Account Based Marketing
If ABM looks like a worthwhile approach for your business, and you’re ready to operationalize it strategically, then you can start benefiting from it considerably.
ABM changes your marketing strategy in numerous ways that bring significant benefits, such as:
Better Sales/Marketing Alignment
Traditionally, marketing teams are charged with targeting numerous potential leads while sales teams are responsible for converting leads that are most likely to buy. With account-based marketing, both marketing and sales are targeting leads that are most likely to convert.
This makes it much easier to achieve the sales/marketing alignment that all B2B marketers strive for. Having both teams work towards a central role has a lot of benefits. ABM encourages this as an essential strategy. For example, marketing and sales teams have to work together closely in order to choose the best accounts to target with ABM.
Build a More Efficient and Effective Marketing Strategy
Marketers who go net fishing with traditional inbound strategies waste a lot of time chasing leads that aren’t likely to become customers. When you start spearfishing with ABM, you’re focusing on accounts that are most likely to turn into sales.
This in turn improves the efficiency of your marketing efforts, because you’re only investing time nurturing the most valuable leads. Focusing on a few key accounts frees up marketing teams to make adjustments and perfect their strategy, making their efforts more effective overall.
Improve Customer Experience
ABM can help improve customer experience in a number of ways. When targeting just a few key accounts, there’s an opportunity to personalize your marketing message to the unique interests and needs of personas associated with an account. That means you’re showing your audience exactly what they’re looking for and streamlining their path to becoming a customer.
Another huge aspect of ABM is taking advantage of opportunities to upsell and cross sell your to current customers. So you’re focused on doing everything you can to ensure your customers like your product, including providing excellent customer service and opportunities for them to get more value from your business.
These efforts improve customer experience overall, and can help you earn more from them. According to a TOPO survey, 80% of respondents say ABM increases customer lifetime value.
Stand Out From the Competition
All marketers today understand that personalization is key to capturing audience attention, nurturing leads and driving sales. However those taking a traditional inbound approach are limited in how much they can personalize content for individual audience members. There are simply too many leads to target, making personalization hard to scale.
When you’re only marketing to a small group of relevant accounts with ABM, you have an opportunity to take a hyper-personal approach. You can personalize your content and ads not just to fit individual accounts, but also individual influencers within the business. This can help you stand out from the competition who are unable to deliver an ultra-relevant message to all their leads at scale.
Higher Close Rates
When you’re targeting a huge pool of leads, there are many who will likely never convert. So it’s a given that your overall conversion rates will be quite low. ABM, on the other hand, has some of the highest conversion rates of any strategy. There are a number of factors that influence this, but most importantly you’re only targeting leads that are most likely to convert.
The key to success with ABM is targeting high value leads that are likely to convert. That way your conversion rates are higher and you drive more revenue than traditional inbound.
Drive More Revenue
Higher conversion rates can lead to more revenue, especially if the account has a lot of spending potential. When applied the right way, ABM can help B2B businesses close deals that are much larger than what they could achieve with traditional inbound.
According to Forrester’s SiriusDecisions report, 91% of marketers that use ABM see a larger than average deal size. For a quarter of respondents, deal size increases over 50%.
Maximize ROI Overall
All of the benefits mentioned above work together to bring greater ROI for businesses overall.
ABM maximizes ROI by:
- Targeting accounts that can bring in larger sales
- More relevant targeting and sales/marketing alignment, leading to higher close rates
- Improved customer experience which leads to better retention
- Better targeting efficiency means more time and resources to invest in expanding marketing initiatives
- Expanding existing accounts through targeted marketing increases customer lifetime value.
Truth lies in the numbers. According to a ITSMA survey, Over 80% of marketers that measure ROI say that ABM initiatives outperform other marketing investments.
How to Maximize the Value of ABM for Your Business
ABM has a lot of benefits that B2B businesses can realize, but only if they have a strong understanding of how the strategy works and are able to operationalize it effectively.
Here are a few key points to follow if you want to maximize the value of ABM for your business:
Select the Right Accounts to Target
Probably the most important key to success with ABM is targeting the right kind of accounts. If your B2B business is like most, you have a wide range of potential leads that are highly likely, somewhat likely, or unlikely to convert. You have to decide:
- Which category of leads are worthwhile to target with ABM
- How much potential revenue you can earn from each account
- How many accounts you can reasonably target at one time
You need to make sure the accounts you target are valuable enough and you’re targeting enough of them to replace the revenue potential that comes from targeting hundreds of leads at once. Ideally, you should aim to earn more by targeting a smaller number of high value accounts.
According to a recent TOPO report, most organizations only pursue 38% of their target accounts at one time. You need to strike a balance between targeting enough accounts to meet your revenue goals and ensuring you have enough time and resources to implement an ABM approach with each.
Perfect Sales/Marketing Alignment
Choosing the right accounts to target is easy enough to do if you really perfect sales and marketing alignment. You can combine data insights from past marketing campaigns with wisdom from your sales team to determine which kinds of leads are easiest to convert, offer the greatest potential LTV, etc.
That said, the importance of sales/marketing alignment also expands beyond just defining your ideal account. Sales and marketing need to work closely together to develop and execute a scalable approach across a broad account list. In fact, businesses say this is the biggest challenge to succeeding with ABM initiatives, along with creating customized content and coordinating programs across marketing, sales development, and sales:
Most business leaders think they have good sales and marketing alignment as long as the marketing team passes along all relevant lead information to the sales team effectively. But they really need to be working together at all stages of the sales funnel, including identifying leads, nurturing them, and turning them into customers.
Effectively scaling your ABM approach also requires clear delegation and efficient processes between the two teams. Determine who’s responsible for activities at different points in the sales funnel, how they’ll reach out, and how both marketing and sales can monitor lead progress.
Define and Target Key Personas
To effectively market to an account, you need to identify several key buyer personas to target. You can directly target individuals who make the buying decisions in a business. But equally valuable to account based marketing is identifying and targeting other key influencers as well.
Depending on your B2B niche, these influencers could be in finance, HR, IT, or they could be end users. Before you get started with ABM, you should work out a list of the most influential players to target for your accounts. Each should be built out as a separate persona with unique interests, point of view, and pain points. Then you can personalize your marketing content and approach to target each.
You can build out standard personas that are similar for most of your target accounts. It might also be worthwhile to take a look at the business structure of individual accounts, as some of the most relevant influencers could be unique to each account.
Map Out Your Channels and Offers
The B2B path to purchase is complicated even when you’re targeting just one persona. When considering the input and feedback loops of additional influencers, it becomes even more complex.
Before you start deciding how to market to your audience and with what offers, it makes sense to effectively map out the buying journey that’s unique to your product:
This gives you a visual illustration of the full picture of your goals, while revealing key areas to invest in as a marketer.
With a buyer journey map and key influencer personas, you’re ready to decide which channels to invest in, and how much. Some persons are more influential than others, so it makes sense to allocate channel investment to reflect this.
Next, you’re ready to create your marketing content and offers optimized to each channel and target persona within the account. Determine how you’re going to use them on each channel and at what frequency to effectively nurture these leads.
Hyper-personalized marketing is key to setting your ABM approach apart from other inbound marketers. It also helps you capture your audience’s attention with a more relevant message. At this point you should also determine how you’re going to personalize content to the needs of specific accounts and the pain points of individual influencers for an account. Make sure this is a realistic and scalable investment, maximizing the value of delivering personalized content when it matters most.
Rework Your Analytics Strategy
The last thing you want to do before you invest in any account-based marketing initiatives is revamp your current analytics strategy. The metrics you use for ABM could be the same as the ones you used with normal inbound. But a lot of these traditional metrics aren’t as valuable in an ABM context.
Since you’re working with a smaller quantity of leads with ABM, metrics like conversion rates and revenue don’t tell you much about the effectiveness of your efforts short-term. If you have a long sales cycle, it can take a while before you convert your first account. In the meantime, you need to have key performance indicators that illustrate how you’re progressing.
Here are the most important ABM metrics B2B marketers use, according to a recent DemandGen report:
While metrics like sales and revenue are still valuable long term, try to increase focus on other relevant metrics short-term, like engagement with key contacts, pipeline metrics, and attributing specific campaign activities to closed/won deals.
If you’re starting to see good results with ABM and want to increase how much budget you allocate to it, you might also consider investing in analytics technologies that specialize in illustrating the effectiveness of ABM campaigns.
B2B businesses have been applying an account-based marketing approach for years now and most agree that it’s more than worth the investment. Numerous surveys of marketers around the web offer overwhelming evidence that ABM can help you drive more conversions, improve marketing efficiency, land bigger sales, improve customer experience, increase customer lifetime value, and more.
If you’re ready to start investing in ABM and realize these benefits for yourself, just make sure you take a strategic approach by targeting the right accounts, understanding key influencer personas, marketing to the whole customer journey, and tracking the right performance metrics to improve your campaigns.
Dustin DeTorres is the CEO of DeTorres Group, a B2B Lead Generation & digital marketing agency that’s been helping B2B companies across the world since 2008. To learn more about Dustin DeTorres, click here.