How Account-Based Marketing is Changing the Face of B2B
Account-Based Marketing or ABM is the new black when it comes to B2B. With ABM, rather than targeting broad company groups, i.e. large enterprises, industry sectors, or businesses based in geographic locations, you take a more focussed, ‘laser-guided’ approach. ABM targets specific companies or accounts, and then the individuals within those organizations with personalized content and campaigns. According to one of the pioneers in the field, the Information Technology Services Marketing Association (ITSMA), the simplest definition of ABM is “treating individual accounts as markets in their own right” (1).
Competition and Technology are Key Drivers
As a core concept, ABM is nothing new: you identify exactly the prospects who you want to do business with, and then target them very precisely and directly with marketing and sales activities. The gravitation towards this approach though has been driven by two key factors: competition and technology. Competition in the B2B space has intensified significantly with the proliferation of companies offering solutions across all markets, creating more noise than ever for brands to cut through and get their messages across. This has moved them to go back-to-basics, focusing on attracting higher-value customers, and retaining them. Advances in marketing automation and targeting technologies have also enabled them to do this more efficiently, and on an ongoing basis. In the past, ABM was primarily used only by large enterprises to focus on a few of their biggest accounts due to the costs and complexity entailed in running such programmes. Over recent years, however, tools and platforms have evolved to allow organizations of all sizes to apply ABM methods, delivering tailored activities to a greater number of accounts. The combination of these forces has meant that ABM has now become the go-to strategy for many companies operating in the B2B space.
Flipping the Funnel
ABM flips the traditional marketing and sales funnel on its head. The idea is no longer to have a huge, wide funnel at the top, but rather a narrower, highly targeted funnel with very qualified leads going in. According to Forrester Research, only 1% of leads actually turn into revenue generating customers (2); the premise of ABM is therefore to concentrate directly on these customers in order to build business within those accounts. Historically, most brands focused on broad-reaching “spray-and-pray” campaigns, trying to get their word out as far as possible. The objective was to put out a considerable volume of marketing content to act as magnets, thereby drawing large quantities of leads into your funnel. Conversely, ABM is about concentrating your resources to pursue and convert a defined set of accounts with personalized campaigns designed to resonate with individual stakeholders. You reach out to the right people at the right account with the right message. In this respect, traditional marketing is akin to fishing with a net, whilst ABM is more like fishing with a spear. It doesn’t waste time or resources on unqualified or undesirable prospects that clearly won’t become customers. We see it all the time: people requesting whitepapers or attending webinars, even though they have no intention of buying your product or service. ABM reduces these inefficiencies.
Analysis and Automation
To achieve this, ABM is built on a foundation of extensive data collection and analysis. It utilises detailed firmographic and behavioural insights to fuel predictive analytics around which accounts to target, and then where, when, and how to engage with stakeholders through the buying process. This data platform is married with automation that enables brands to deliver tailored messages, content, and experiences targeted to specific accounts and individuals. ABMs importance today is directly related to the availability of better marketing automation tools like Marketo, Salesforce, Pardot, Outreach, Engagio, and Terminus, now making it an affordable and scalable option. Automation enables marketers to manage and score leads; predict and identify high value customers; nurture and build relationships; deliver and optimize targeted content; and drive efficiencies through programmatic media buying directed to accounts and individuals at whatever stage of the buying process they’re in. These tools allow a type of customization and personalization that was historically done by the best sales people when on the phone, in meetings, or preparing proposals; this creates relevancy of message which leads to greater engagement, resonance, and ultimately conversion. The more specific and relevant what you’re saying is to your audience, the more likely they are to absorb and act upon it. According to research firm MarketingSherpa, 82% of prospects value content made for their specific industries, and 67% content created for their specific job functions (3).
Each Account is a Market
ABM recognizes that successful B2B marketing is about speaking to a collective group of stakeholders within a business or department, not to isolated individuals. We know that business units or departments are less and less being run in silos, and that decisions are made by more than one person. Projects and initiatives are now being led and managed by committees consisting of representatives from different functions as required, including: Marketing, Sales, Customer Success, Operations, HR, Finance, Legal, Procurement, and so on. In most cases these committees are virtual; they come together in a largely informal manner to advise on and make a specific decision before dissolving back into the business. The norm is not to have a formalized panel made up of the same executives each time. In this respect, ABM treats each account as a market in its own right; requiring that you identify and engage with a diverse group of stakeholders and influencers from across the business who will input into the purchasing decision. The individual focus of ABM is therefore just as important as the account.
Cross Team Collaboration
This approach requires close collaboration across the organization, and fundamentally between customer facing teams such as Marketing, Sales, Delivery, and Client Success. There needs to be a joined-up conversation with each respective client account, across stakeholders, directed at meeting their needs and achieving their goals. ABM blurs the boundaries between internal teams and the traditional view of roles and responsibilities within the organization, creating an ongoing practice of shared learning and institutional knowledge building. According to research by LinkedIn and JointheDots, 78 percent of organizations saw revenue growth and 58 percent reported pipeline growth when Marketing and Sales collaborated (4). Implementing an ABM strategy requires a change in philosophy, outlook, and ways-of-working; but ultimately the rewards are significant with 97% of marketers saying that ABM has higher ROI than other marketing activities, and 85% believing that ABM provides significant benefits to retain and expand client relationships (5).
(1) Bev Burgess, ITSMA Blog – Defining the Three Types of Account-Based Marketing (Feb 2017)
(2) Lori Wizdo, Forrester Research – The New Physics of Lead-To-Revenue Management (Mar 2013)
(3) Dayna Rothman, Marketo Blog – How To Develop Great Content That Generates Demand (Jan 2013)
(4) Dan Kent-Smith, LinkedIn Marketing Solutions Blog – Introducing “The Payoffs of Improved Sales and Marketing Alignment (Nov 2016)
(5) Altera Group – ABM Top Level Results (Apr 2011)