Account-based marketing, or ABM, is the newest trend in business-to-business sales. Or is it? In an industry where everyone is always celebrating the next big thing, ABM is the latest in a series of revolutions, but how revolutionary is it, truly?
There’s no denying the rising interest in ABM. Google Trends shows a marked increase in searches for “account based marketing” within the last year:
But looking more closely at the trend line, we can see there have been several spikes in interest since 2004, when the term was first coined by the Information Technology Services Marketing Association, or ITSMA. The idea of ABM, of course, is much older.
What is ABM?
Before we can discuss ABM’s history, we’ll first need to define it. According to SiriusDecisions, “Account-based marketing (ABM) is the strategic approach marketers use to support a defined universe of accounts, including strategic accounts and named accounts” (emphasis added).
According to ITSMA, “ABM focuses explicitly on individual client accounts . . . it is a collaborative approach that engages sales, marketing, delivery, and key executives toward achieving the client’s business goals.”
What does that mean? In a traditional lead generation model, you start by defining your market: what are your buyer personas? Then, following a reductive strategy, you qualify prospects who match your personas, contacting only those who meet your criteria and take the actions you define. In an ABM model, you follow an additive strategy. Instead of buyer personas, you start with firmographics. What do my best customers or prospects have in common, and how can I use that knowledge to target additional organizations?
Marketers spend their time, advertising dollars, and other efforts on the accounts most likely to be a fit for their product and/or service. Anyone in sales or marketing should be familiar with the Pareto principle: 80 percent of your results derive from 20 percent of your efforts. In other words, 20 percent of your sales drive 80 percent of your income.
So, we just target the large “whale” accounts, and don’t worry about anything else, right?
Acknowledging that 5.4 decision-makers are involved in an average B2B purchase, an account-based marketing strategy means targeting your efforts to reach all of the key decision-makers at an organization. It means treating each individual account as a market of one. You can’t just stop at targeting the organization; you must target the individuals at the organization.
If you’ve paid attention to sales and marketing at all in the last 50 years, you’re probably thinking, “Wait a minute, this sounds familiar.” You are correct. Strategic account management, named account management, key account management — they all share a similar ethos as ABM: target the right accounts, and you’ll increase the efficiency and effectiveness of your sales team.
So, what’s so new about ABM? We now have the technology to make this approach effective and scalable.
ABM Growth Timeline
Account-based marketing has taken many forms over the years. The Mad Men-era three martini lunches and decadent client dinners, the stadium luxury suites of the 80s and 90s, and the invite-only parties at the tradeshows of the 00s were all precursors to the ABM we know today. For an even more retro tactic, design company Intridea purchased a billboard in 2014 near the offices of a large account they wanted to sign . . . and it worked.
Though these examples are decidedly account-focused, you won’t hear many gurus associate them with modern ABM. Why? Because you can’t measure their success.
To learn more, check out this handy table put together by Australian consulting firm Barrett.
What distinguishes “old” ABM from “new” ABM?
As the classic business maxim goes, “You can’t manage what you can’t measure.” This saying, widely attributed to management consultant Peter Drucker, might have been in response to John Wanamaker’s even older marketing quote: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
Modern marketing is all about measurement — ABM or otherwise. Connecting the dots between actions a user takes online (especially a pool of users at one company) has been possible for some time, but not without a fair amount of human conjecture and/or programming prowess to link siloed information. Now, thanks to tools like Terminus, Engagio, Demandbase, and others, companies can quickly and easily measure the reach and impact of their ABM efforts.
This is what makes ABM possible in a way Don Draper could never have imagined — actionable insights that marketers can deliver directly to sales, down to the number whitepaper views sorted by company and individual. Seven people at your targeted firm have viewed your content, but one of those has viewed it seven times? That’s probably an internal advocate you can work to help make the sale. Thanks to new ABM technology, companies are returning to the relational selling of old.
ABM isn’t new; the technology that makes ABM measurable is new. But Terminus CMO Sangram Vajre reminds us, “ABM is a strategy and not a product,” so don’t focus too much on software. Instead, focus on aligning your entire company — not just sales and marketing — with your new, account-centric strategy.