In the early 2000s, B2B marketers began using account-based marketing (ABM). It was a new approach to engaging and converting high-value prospect accounts. Today, ABM is a commonly-used tactic that many businesses leverage to close opportunities with prospects and upsell to existing customers. But what is ABM and how, when, and why should you use it?
Let’s start with the “why.” Recent survey data indicates that 91% of respondents claim accounts won through ABM have a larger average deal size. They also report that a quarter of those deals are at least 50% larger than non-ABM deals.(1)
Moreover, as far back as 2016, companies using ABM were generating 208% more revenue for their marketing efforts.(2) That number is certainly higher today as ABM continues to grow.
What is account-based marketing?
Instead of casting a broad net in hopes of capturing more leads, account-based marketers work with sales to identify and reach out to prospects that are the best possible fit for their product or service and are high-value. Ample research is involved, and we’ll touch on that below.
With ABM, you must treat each individual prospect as though they were a distinct, separate market with unique needs, challenges, and goals. There are no carpet-bombing marketing campaigns involved; all outreach is direct, one-on-one communication.
Account-based marketing is almost exclusively used by B2B businesses. This is due to the complexity of the B2B sales cycle and the number of people involved in the decision-making process.
Key considerations associated with ABM
Because ABM differs so significantly from traditional “bulk” marketing, it’s important to understand some key components of ABM and how it works.
Ideal customer profiles
Developing ideal customer profiles (ICPs) is similar to creating and aligning buyer personas with the buyer journey. But they differ in important ways.
For example, two individuals at the same prospect organization may have competing objectives or conflicting opinions. That should be noted in your overarching ICP. Successful ABM requires you to take granular, detailed notes and understand your prospect in a much deeper, personal way. You must know and anticipate every minute detail that could impact the sales cycle and buying process.
Humanizing the prospect: high-quality vs. high-volume
The point of ABM is to focus on prospect quality rather than generating a high volume of leads. ABM lets marketing and sales contact pre-qualified leads rather than unqualified, cold leads. Lead scoring can help identify the most sales-ready prospects. Ultimately, one highly-qualified prospect with a proven propensity to purchase is worth 100 cold leads who’ve shown no interest.
When you first make contact, your prospect will feel as though they are communicating with an old friend, not a faceless salesperson. In this way, ABM starts to resemble 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.
ABM prospect research
Marketing and sales conduct exhaustive research on each individual prospect. They learn who the decision makers are, the company’s needs, pain points, goals, history, and any additional insights they can find.
With a unified CRM, much of that data is readily available for both teams, alleviating miscommunication or misinterpretation of data. The remaining required research will take place on social media, via internet searches, and anywhere else information can be found about the prospect and its decision makers.
When to use ABM
You don’t need to apply an account-based marketing approach to your every prospecting effort. ABM doesn’t replace traditional marketing, it complements it.
If you use ABM on every prospect, the risk/reward ratio drops significantly. You’ll spend loads of time learning about a prospect who ends up signing a small contract. The resulting cost of conducting the research and learning about the prospect is greater than the revenue generated from your account-based marketing tactics.
Instead, you want to reserve your ABM strategy for only the highest-value prospects with the greatest potential to buy. When one of them signs a five-year deal and locks in a few hundred thousand dollars of recurring revenue, your efforts won’t have gone in vain.
Benefits of account-based marketing
By now you’ll have gleaned insight into some of the top benefits involved in running an ABM campaign. First and foremost, the primary benefit of ABM is more revenue generated. Second, you save loads of time by eliminating outreach to dead-end leads and can more easily acquire new, high-value customers that lend stability to the future of your business.
Those overarching benefits stem from:
- Empowering sales to focus their attention and energy on highly-qualified prospects
- Reducing time spent on cold outreach
- Dramatically increasing your closed/won rates
- A better, more personalized customer experience and buyer’s journey for your most valuable prospects and customers
- Increased efficiency and time saved that can be spent on developing deeper customer relationships
- Easier tracking of results to identify what’s working. Your unified CRM can track every interaction your teams have with individual prospect accounts and the contacts in those accounts
- Improved sales and marketing alignment, which naturally leads to faster revenue growth
What to learn more about ABM?
Keep an eye out for our next piece on account-based marketing. In this piece, we covered ABM basics. In our next piece, we’ll dig into ABM best practices and how a unified CRM can guide your success.
1. “State of Account Based Marketing,” SiriusDecisions, 2017
2. “Flipping Funnels Weekly: Account-Based Marketing Isn’t The Death of Anything,” Terminus, 2016