Earlier this year, SiriusDecisions released a study revealing a staggering 92 percent of marketers believe account-based marketing is essential for business-to-business marketing.
a slew of new technologies is making it possible for small and mid-market companies to target the proverbial “whales”
Despite the fact that only one in five of those same respondents have a full program in place, the amount who highly value account-based marketing (ABM) is overwhelming.
So what’s creating such substantial demand for ABM? Is this just the beginning of the next hype cycle for B2B marketing and sales?
Answering the first question should help us arrive at a second answer.
The main influence in ABMs popularity is the substantial complexity of enterprise purchase cycles, or more specifically, the intricacies of the buying groups that confirm or deny these important deals.
This type of buying cycle is by no means new, but the resources necessary to navigate the treacherous terrain of enterprise buying groups was previously only available to other enterprises.
Now, a slew of new technologies make it possible for small and mid-market companies to target the proverbial “whales” rather than be content with a net full of minnows.
Why Target Accounts Instead of Personas?
The advancements in marketing technology over the past decade have made demand generation a major piece of the marketing lexicon. Using inbound techniques in conjunction with marketing automation, SEO, social media, and other techniques empowered marketers to drive traffic to their site, capture contact information, and nurture those contacts into leads for sales.
Bigger contracts yield bigger results
Using personas to personalize these campaigns made it easier to attract the right type of visitors, and therefore the right type of leads. Marketers were essentially targeting a “type” of buyer, and used increasingly sophisticated technology to engage with all buyers that met the requirements.
This approach worked — indeed, still does work — for attracting companies with smaller buying groups, but it’s not ideal for enterprises that use large groups rather than individuals to make purchasing decisions.
In 2013, CEB estimated that on average 5.4 people must formally sign off on B2B purchases. If the size of the group isn’t impressive, consider this: the likelihood of the group even making a purchase is inversely proportionate to the size of the group. So the more decision makers involved, the harder it is for them to come to a consensus and actually make a purchase.
Through a series of surveys, CEB also concluded that personalization — at least on a persona level — can backfire by highlighting the value a product holds to certain members of the group without addressing the consensus needed to reach a collective decision.
And here’s where account-based marketing turns demand generation on its head. Instead of using inbound methods to target personas, ABM goes on the offense with outbound strategies that personalize messaging for specific companies (read: accounts).
For further clarification, John Miller, founder of Marketo and CEO of Engagio, broke down the differences even further:
In truth, ABM is an even higher level of personalization than demand generation usually employs, because every message delivered to the target account is personalized solely for that account.
Sounds like a lot of work. Is it worth the effort? According to a survey by the ITSMA, 42 percent of respondents indicated that ABM delivered significantly higher ROI than other marketing initiatives.
Bigger contracts yield bigger results.
In Practice: It’s All About Sales and Marketing Alignment
In practice, ABM begins with sales and marketing drawing up a list of accounts to target — again, in stark contrast to the demand gen approach of driving “traffic” to your website and then turning them into known accounts.
SiriusDecisions presents four main ways marketing and sales can create their list:
Once the list is complete, it’s time for marketing and sales to develop materials that target each account on the list. This may sound similar to outbound sales, but the difference is instead of running one-off campaigns, marketing orchestrates a series of “always-on” campaigns that specifically target stakeholders from each account.
Craig Rosenberg, co-founder and chief analyst at TOPO, provides an excellent example when he quotes a sales executive explaining an ABM program:
“It’s pretty simple: we identified that the company’s key growth strategy for the year was to drive significant expansion internationally. I spent a month identifying the key executives in charge of the expansion. We then set up campaigns focusing every message, every conversation, every presentation to them around this strategy. We spent months working different angles and eventually turned that into a big [8-figure] deal.”
By using ABM to create consensus among stakeholders, this executive was able to tie down a massive contract. His company didn’t target keywords or hashtags, they researched the specific needs of a specific company and targeted an entire campaign towards that one account.
New Software Gives ABM Mass Appeal
Despite the tremendous amount of hype being heaped on ABM, the practice isn’t new. Enterprise vendors have dedicated entire teams to specific accounts since the 1980s. But like nearly everything else in marketing and sales, technology has made this practice more accessible to SMBs and mid-market companies alike.
Often referred to as advertising automation, the software functions a lot like PPC software, but instead of targeting known visitors or keywords, you can target accounts by their IP address, sales stage in your CRM, and their position at the company.
This allows businesses of all size to fairly easily target stakeholders from their list of accounts — regardless of whether the prospects are known in the marketing automation and CRM system.
While such software is an enabler of account-based marketing, the skills needed to operate it are an obstacle. In SiriusDecision’s survey, 47 percent of respondents thought their organizations lacked the skills to implement full-fledged ABM.
It’s Not All About New Business
This article has mainly focused on using ABM for acquisition purposes, which makes sense because most B2B vendors likely want to know how ABM will help them reel in the big fish. But an ABM framework can also be used with existing customers to upsell, cross sell, or more broadly, turn loyal customers into effective advocates for your brand.
Because the logistics of keeping and upgrading existing customers is far superior to the cost of acquisition, drawing up a list of your current customers to target with ABM will likely yield excellent returns, too.
So, with the motivators of ABM’s popularity revealed, it’s fair to return to the second question: is this the dawn of another hypecycle?
Given ABM’s historical usage among enterprises as well as the lowered barrier to entry, it appears ABM is a strategy that most B2B marketers should study well.
After all, who wouldn’t want to focus on the most valuable accounts that will drive the most revenue? The logic seems very sound.