The idea of account-based marketing (ABM) has been around since the early 2000s. It’s an innovative approach to B2B marketing that helps businesses target high-value prospects. When used effectively, account-based marketing can help companies to close bigger deals while reducing the total effort spent on marketing. But what is ABM, how does it work and why should your business consider adopting it?
What is ABM?
In the modern version of account-based marketing, businesses focus their efforts on high-value prospects. ABM helps reduce the effort businesses have to invest into marketing while improving the results.
According to one survey, 91% of respondents report the deals won through ABM are bigger than those earned through traditional methods. In one-quarter of those cases, the deals are at least 50% larger than non-ABM deals. Another report from 2016 found companies that use ABM generate 208% more revenue from their marketing. These results clearly indicate why the practice of ABM has remained popular for more than 20 years since its inception and why its popularity is continuing to grow.
According to one 2021 report, the ABM industry is expected to have a CAGR of 11.6%, reaching a value of $1.6 billion by 2027. The practice is seeing particularly strong growth in the United States and China, but there is worldwide interest.
Account-based marketing differs from the broader approach to marketing seen in some areas of the B2C space. Instead of casting a wide net and trying to reach as many people as possible, account-based marketers work with the sales department to find the prospects who are most likely to convert and become high-value customers. The practice is primarily used in the B2B space; however, it could apply to consumers as well in more luxury markets.
How Account-Based Marketing Works
Account-based marketing is quite a focused and time-consuming effort. The practice does not use blanket ‘spray-and-pray emails or other broad campaigns. Instead, account-based marketing uses direct outreach, with account managers approaching individual prospects directly and tailoring the marketing and offers to the needs of the customer.
This approach works particularly well for high-value B2B campaigns where the sales cycle is usually longer, and several people are involved in making purchasing decisions. Building a relationship with the key decision makers and learning what they’re looking for helps marketers create offers that their most valuable prospects will be interested in.
When To Use ABM
Account-based marketing makes sense for businesses that sell high-value products and/or rely on long-term repeat customers. However, even within that category, it’s not always worth using ABM. This marketing practice complements traditional marketing; it does not replace it.
It wouldn’t make sense to invest a significant amount of time learning about every prospect and tailoring marketing campaigns to them. If this strategy is employed indiscriminately, you may invest a lot of time into a prospect who lacks the budget or the authority to sign a large deal. The human resource element of ABM can be expensive, and if a prospect does not sign a high-value deal, the cost of the research in the early stages of ABM could end up being more than the revenue the customer generates.
That’s why it’s so important to save ABM for the highest-value prospects who are already well-qualified. Even with this kind of vetting, not all of the prospects will convert, but the percentage that do will generate more than enough revenue to make the effort worth the investment.
The Key Components of Account-Based Marketing
The individualized approach is the cornerstone of how ABM works and what makes it so different (and so much more effective for businesses) from traditional bulk marketing. To implement account-based marketing effectively, it’s important to understand the key components of the practice and how they’re used.
Ideal Customer Profiles
In consumer-focused marketing, the idea of buyer personas is often used. Marketers focus on aligning personas with the buyer journey. Using buyer personas in B2B marketing can be effective, with one report suggesting that building websites with a buyer persona in mind can make them two to five times more effective and accessible to that target audience. Ideal customer profiles (ICPs)are similar to buyer personas but with some key differences.
In some sales scenarios, you may find yourself dealing with two people at an organization who have competing objectives or whose opinions differ in areas that are important to the deal. This is something you should note in your ICP. Successful ABM requires understanding your prospect on a deeper level, and this means understanding how those conflicting goals or opinions could interfere with the sales process.
Humanizing the Prospect: High Quality vs. High Volume
ABM focuses on generating high-quality leads rather than high volume. Instead of wasting time contacting cold leads, ABM lets marketers and sales professionals focus their efforts on pre-qualified leads. Using lead scoring, it’s possible to identify the best, most sales-ready prospects, so marketers can direct their efforts toward them. One highly qualified prospect with clear purchase intent is worth more than 100 cold leads who haven’t expressed an interest in the product or service.
With the correct approach, ABM helps build relationships with prospects more quickly. Instead of feeling like they’re talking to a faceless corporate marketer, the prospect will feel they’re talking to an old friend. This isn’t just personalized marketing, it’s humanized marketing.
Sales & marketing alignment
Sales and marketing alignment is vital in ABM. These two teams’ collaboration must be airtight for ABM to work properly. Once you’ve identified your target prospect accounts, you begin researching them individually. This kicks off a series of steps involved in successful account-based marketing.
Furthermore, sales and marketing will collaborate better with improved business transparency and if the entire ABM process is managed in a unified CRM.
Sales and Marketing Alignment
The alignment of sales and marketing is an essential component of ABM. The two teams must work together effectively for ABM to be successful. The first step in an ABM campaign is to identify target prospects. Next, the marketers must research each prospect individually to determine the best approach to take with them.
To help sales and marketing communicate more effectively and ensure business transparency, it’s useful to use a unified CRM to manage the ABM process.
ABM Prospect Research
The research into each prospect should cover several areas, including:
- The names and positions of key decision makers
- The company’s history
- Current goals and pain points
- Any needs the product or service might be able to address
This data can be gathered from a variety of sources, such as:
- Social media
- Business-focused platforms such as Glassdoor and LinkedIn
- Trade journals
- Company reports
- Internet searches
- General networking
The goal of the research phase is to learn as much as possible about the prospect and find any insights that might help close the deal. The sales and marketing teams can utilize a unified CRM to share these insights. By having all the information about prospects stored in one place, accessible to everyone, there’s less risk of miscommunication, misunderstandings and wasted effort.
The Benefits of Account-Based Marketing
As mentioned earlier, account-based marketing helps businesses close deals with the prospects who offer the highest potential, both in terms of likelihood of conversion and the value of the purchase they’ll make. The ABM Alliance highlights another key benefit of account-based marketing being the long-term quality of the conversions. Businesses that employ ABM report customers having increased loyalty and higher lifetime value than those relying on traditional marketing techniques.
Using account-based marketing can also save time and resources by cutting down on outreach to dead-end leads. Marketing teams are empowered to focus on qualified prospects more likely to become buyers and make repeat purchases. This lends stability to the business in the longer term.
The benefits of ABM can be summarized as:
- Sales and marketing teams are empowered to focus on the highest-quality prospects
- Time spent on cold outreach can be greatly reduced
- Increased closed/won rates
- The most valuable customers/prospects enjoy a better and more personalized experience
- The increase in efficiency frees time to develop stronger customer relationships
- Using a unified CRM makes it easier to track the results of different campaigns
- A unified CRM also helps teams track each interaction with high-value customers, reducing confusion or frustration
- Improved sales and marketing alignment supports faster growth
There are several things to consider when building an ABM strategy. First, both the sales and marketing team must be on board with the idea of ABM and have effective ways of working together. If your teams are not familiar with ABM, they may need some training, both together and as separate departments, to help them understand the benefits of the practice and how it will save them time and effort in the long term.
Once you’ve built a robust framework for the sales and marketing teams to work together, the next step is defining the market segments you’ll target with your ABM. The most successful account-based marketing programs target clearly defined segments. Your criteria may include:
- Organization size
- Annual revenue
- Current and/or projected spend
Defining your audience segments and filtering messaging based on these criteria will help reduce wasted time and make the messaging more effective. There’s little point in spending resources targeting a small-cap company if your product or service is aimed at the Fortune 500 level and you’re looking for correspondingly large scale project spending. In contrast, if you’re a smaller organization, tendering for something you’d be unable to deliver on would also be a poor choice of effort in the short to medium term.
Once your audience segments are defined, you can filter your contact list to get a list of prospects to research. These prospects have passed the first stage of qualification, and it’s during the next level of research your teams will determine which contacts to invest the most time into. All records about prospects should be entered into the unified CRM so the sales and marketing teams can effectively work together to build relationships with the qualified leads. Each lead will have their own customized campaign, designed around their needs, pain points and interests.
Throughout this process, it’s a good idea to track all contacts and activities so everyone dealing with the account can see how far the prospect is along the sales funnel. In most cases, a high-value prospect will have a dedicated account manager who is responsible for all communication, both inbound and out. These prospects will not receive standard email campaigns or other automated communications.
Over the course of the campaign, it can be useful to host regular meetings with sales managers to get feedback on the progress with different contacts. This feedback can help improve the targeting at earlier stages of the process, so you can gradually refine your strategy and find the highest-quality leads to invest time into.
Tactics and Tools for Account-Based Marketing
How To Implement ABM
If you’d like to get started with account-based marketing, the key areas to focus on are the preliminary research into the qualified leads and the delivery of the custom campaign. Successful ABM campaigns require a robust tech stack, including:
- Market research tools
- Engagement monitoring
- Lead scoring
- Marketing automation
- Unified CRM
Ideally, these tools will offer out-of-the-box integration, so the friction faced by sales and marketing workers will be minimal. Depending on the size of the business and the scale of the ABM campaigns, you may wish to consider deploying end-to-end ABM tools rather than trying to supplement existing traditional marketing suites with bolt-on tools.
Whichever approach you decide to take, talk to key stakeholders in the sales and marketing teams to discover what their current workflow is and what they need to be able to do their jobs effectively.
What Does an ABM Campaign Look Like?
The nature of account-based marketing means a successful ABM campaign will look different for each prospect. An ABM campaign builds a relationship over a period, so the prospect starts to trust the business, and when they’re ready to make a purchase, that brand is at the forefront of their minds.
Some ABM campaigns are targeted to multiple companies within a vertical. Others are one-to-one. Unlike broader traditional marketing campaigns that simply present a problem and show how your product or service solves it in a general sense, ABM campaigns present things in a more tailored way according to the buying stage, industry and even size of the company in question.
This kind of targeting requires more work. Let’s imagine you’re the owner of a company that sells expense tracking software. The ad campaign you run to reach people in the freight industry would look very different to the ad campaign you’d run for finance executives. The extra work, however, pays off in getting more responses from high-quality leads.
Personalization and ABM
ABM campaigns don’t have to target sectors. Many successful campaigns are one-to-one, with a company researching a specific director or purchasing manager and reaching out to them directly. If the deal you’re hoping to secure is large enough, this level of research can pay off.
Some marketers rent billboards outside company offices or follow their prospects’ social media profiles to learn about their personal interests, then send a marketing message that incorporates them. Creativity is key here. Sending a comic book describing your product to someone whom you know is a manga fan or chocolates themed around a specific niche interest could be an effective way of securing the face-to-face meeting you need to get your foot in the door.
Do You Want To Learn More About Account-Based Marketing?
If this post has piqued your interest, look out for our next piece on account-based marketing. In the follow-up guide, you’ll learn how a unified CRM can make your ABM efforts more efficient and effective.