Most small to mid-sized technology and consulting businesses are continuously evaluating ways to generate new business. Account-based marketing (ABM) is an approach that has captured the interest of many firms, who want to emulate the success larger tech enterprises have enjoyed with this more targeted approach.
Most business leaders recognise that the value of ABM goes far beyond just lead generation. They see it as a more sophisticated strategy compared to traditional demand gen.
The results speak for themselves: ITSMA has found that 72% of businesses deploying ABM say it delivers the highest ROI of any type of marketing [1]. Furthermore, it supports better account engagement, stronger revenue growth, and closer integration between marketing and sales.
But ABM isn’t right for everyone. Despite many firms wanting to implement ABM, not all businesses are either ready or a good fit - and many don't fully understand what it takes to make ABM successful. This blog will outline the types of companies that are better suited to an ABM approach, and help you work out if ABM is a realistic strategy for your business, both practically and commercially.
Do you have the right goals for ABM?
Firstly, your rationale (or goals) for committing to an ABM programme also need to align with ABM as a strategy and the outcomes you can expect. That’s because these tend to be quite different to demand gen.
Typical goals for deploying an ABM strategy include:
- Penetrating a small number of selected new accounts
- Growing business with existing strategic accounts
- Changing perception or strengthening reputation within targeted accounts
- Supporting specific major opportunities or deals
- Entering new markets or selling to new types of buyers
Ideally, you want everyone in your organisation involved in your ABM journey to understand the connection between your ABM strategy and your business objectives. This makes it much easier to get the right people, resources and investments behind your programme - which is critical to its success.
Is ABM a good fit for you?
In terms of good fit, there are several key factors that determine whether your business is a good candidate for ABM:
- You sell high value, typically complex products and/or services
- Your average order value is above £50,000 per annum
- Your sales cycles are long (typically six months or more)
- You sell to multiple decision makers - a buying group consisting of multiple influencers and economic buyers
- You target a relatively finite market, i.e. not 10k+ organisations
Other ‘nice to have’ attributes that would make your business an even better fit include:
- Having a wide portfolio of products and/or services to cross-sell and upsell
- Your clients commit to long-term contracts, or your projects often last longer than 12 months
- You sell to large, international enterprises with multiple divisions
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Are you ready for ABM?
In terms of readiness there are some fundamentals that need to be in place for ABM to be effective, along with a willingness to make some big changes and adopt core principles. These fundamentals include:
- Customer/buyer insight: you’ll need the sales intelligence to inform the right selection of target accounts, along with the tailoring of your value proposition, messaging, content, channels and experiences.
- Resource commitment and training: according to Statista, 40% of B2B marketers said a lack of internal expertise was their biggest barrier to putting a successful ABM strategy in place [2]. ABM demands a very different skill set to demand generation, so using the same people only works if you can retrain them properly. They’ll need to be able to work closely and strategically with sales, develop detailed understanding of client thoughts and needs (and how to obtain this level of insight), and have experience in sales enablement.
- Marketing technology: ABM-specific solutions are still a relatively new innovation, but you should look for technologies that encompass buying intent, personalisation, ABM reporting, predictive analytics, data management and account intelligence.
- Personalisation and thought leadership: the messaging and content that resonates best is built on a deep understanding and insight into your buyer challenges at an individual level.
- Result tracking and measurement: some businesses struggle to track and report effectively on the outcomes from their demand gen programmes. Often, they aren’t sure exactly how marketing activities are impacting pipeline and revenue. Despite this, they are somewhat comforted by seeing a high volume of generic leads. But a high volume of leads is not the outcome of ABM - in fact it's quite the opposite. This means there is no such 'comfort factor' with ABM, so accurate reporting is even more important. ABM metrics/KPIs are different to those associated with traditional demand generation and align more closely with sales metrics. For example, rather than MQLs, you'll be reporting on account engagement and penetration, sales and deal velocity, revenue growth and so on.
Preparing for change
As the above points make clear, there’s a lot of groundwork to do just to get your ABM programme off the ground. Change management and internal communications are a big part of this, especially educating the sales team on how ABM works and why it’s important. Many sales teams have a natural tendency to want leads without worrying about the mechanics behind getting them. A good account-based marketer will develop strong relationships with the sales team to help develop their understanding of the key differences with ABM.
A major shift is in the need for marketing and sales to jointly collaborate to identify target accounts. Too often, sales make the call on which accounts to target and often this is done with guesswork, rather than any real insight. Marketing should bring account data and insight to support the selection process, using information such as buying intent, engagement history, contact hierarchies, account profiling, opportunities for expansion and other account intelligence.
In less mature organisations, marketing can be ignored in this all-important selection process, so it requires a real shift in mindset from both leadership and sales.
In summary: mind the gap
Generally speaking, ABM as a business function is still relatively immature. ITSMA reports that less than 20% of ABM programmes are fully embedded within those businesses deploying such a strategy, and the majority are still in the experimentation or expansion stages [1]. And their survey includes those pioneers of ABM, who've been investing in it for many years.
It’s therefore important to understand what good ABM looks like, because this will give you a sense of how far you may need to go to make your own ABM programme successful. In summary, this means building a cross-functional ABM team with the necessary skills across all key capabilities, who embrace ABM and collaborate effectively to maximise business growth. It's a common mistake to see ABM as just another marketing tactic.
ABM requires investment into the capabilities and skills of the team, and the buy-in of supporters across the organisation. It is essential to have true alignment between sales and marketing, so that collaboration between both departments is seamless.
While all of these things sound great in theory, they take a lot of effort to put into practice. So when considering whether your business is ready for ABM, be mindful of the gap. It's important to first assess where you are today and where your organisation needs to be to make ABM effective.
References:
- Elevating ABM: Building blocks for long-term growth, Momentum ITSMA 2022
- Leading challenges faced by B2B marketers in executing their account-based strategy in the United States as of February 2022, Statista 2022
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