The Magic of Account-Based Marketing
From building personas to improving sales alignment to increasing lifetime value, ABM may seem like the B2B marketer's panacea. Here's how to decide whether it's right for you.
Account-based marketing isn't new, but its recent rise in popularity is capturing the attention of B2B marketers looking for innovative ways to increase marketing performance. Although ABM offers the promise of a competitive advantage, it isn't an ideal fit for many organizations. “At face value, ABM sounds easy to understand—the term is descriptive,” says Mark Ogne, EVP of partner marketing at Demand Metric and founder of the Account-Based Marketing Consortium. “But it's not just a tech platform or a marketing activity. It involves changing the campaigns, content, and audiences that marketing is known for.”
These characteristics prequalify an organization to look deeper at ABM:
- A business-to-business model. Although households can have multiple stakeholders in large purchases, the account concept is most applicable to B2B firms.
- High-value products or services with a lengthy consideration-to-purchase cycle. “If you're highly transactional and your customer lifecycles are fast-moving, it won't work,” says Micky Long, VP and practice director at digital agency Arketi Group.
- An account-based sales model. Although not mandatory, it usually indicates that the other characteristics of the company and its customers warrant the adoption of ABM.
- A keenness to understand the buyer's individual experiences and challenges as they are, not as you hope they will be. “You can't just name 20 accounts and then throw generic marketing and advertising campaigns at them,” says Beverley Burgess, senior VP of ITSMA Europe. “That is not ABM.”
- The willingness to look for prospects and opportunities outside the traditional funnel. ABM represents a deliberate shift away from standard marketing automation practices of recent years that focused on giving prospects abundant opportunities to raise their hands and opt in to the funnel.
That last point is crucial. In fact, ABM expert Jon Miller says he became a proponent of the approach precisely because he hit a wall with standard marketing automation. Speaking of his time as VP of marketing at automation vendor Marketo, he says, “We got well-known for being a company that was extraordinarily good at demand generation, but when we tried to move up-market, that playbook just didn't work with larger, named accounts.”
Developing an account-based strategy ultimately inspired him to cofound Engagio, where, as CEO, he's trying to do for named-account marketing what he once did for large-scale marketing automation. “We want to get B2B marketers to the point where they're not waiting around for the right people to swim into their net, but can reach out to them.”
Acquiring enterprise customers
Big-ticket B2B purchases typically need the involvement, support, and approval of multiple stakeholders. For years account-based sales techniques have focused on the approach of maneuvering between business users, champions, and executives. ABM brings a similar approach, aiming to engage, educate, and activate the right individuals within a viable prospect organization at the right time. It doesn't mean forsaking a one-to-one approach to marketing; it simply addresses the complexities of the considered purchase.
“ABM recognizes the B2B reality that organizations buy through buying centers. There are individuals involved, and it's good to identify them, but ABM offers a more holistic process than finding a name or email address, firing up the nurturing process, and aiming all the guns at that one lead,” says Jerry Rackley, chief analyst at Demand Metric.
Video advertising platform vendor Vidyard recently switched to ABM for large accounts. The drive started, as it often does, in sales, where the company added enterprise account representatives and implemented a territory- and account-based sales model. Then marketing followed suit. “Twelve months ago the focus was on lead volume and flooding the sales team. Today we're driven by pipeline and revenue, not volume of leads,” says Tyler Lessard, Vidyard's CMO. “We care about lead quality and the kinds of companies we think our people can sell into, not just finding everybody connected to sales and marketing activities.
Vidyard works with Terminus and The Big Willow to identify patterns of intention and then target messages into those accounts. The firm monitors for companies actively hiring video marketing professionals, performing high search volumes on related terms, or scaling up the activity on an in-house YouTube channel. Behind the scenes, Vidyard automatically tailors content to suit those signals, and performs coordinated sales and marketing outreach.
Lessard credits the ABM approach with the recent signing of a global insurance company—a vertical the company had paid little attention to in the past. In fact, the client was once rejected as a qualified lead under conventional marketing metrics. “Everything we knew about their business had them below a [quality] lead score, but the real-time intent information tipped them over and spawned a campaign,” Lessard says. “Once we saw data around the technology they were thinking of using, we put them in our account marketing and signaled our sales team to actively start their process.”
Anticipate, identify, and attack
ABM forces marketing organizations to set aside their usual points of pride, like keeping the funnel full, in favor of approaches that focus on quality over quantity and reaching prospects before they even know they're in the funnel. “It's a change of mind-set from what B2B marketers have historically done, like focusing on getting people to come to events and put business cards in fishbowls, or buying random lists,” says Doug Bewsher, CEO of Leadspace.
Associating individuals with accounts rather than thinking of them as a standalone lead is a major first step. Taking a page from account-based sales, and staying in alignment with their approach to the prospect, is the next. “If a lead comes in from a certain account, are you making sure you route it to the relevant salesperson assigned to that account? It's simple, but very few are doing it,” Bewsher says.
On the technology side, ABM-focused vendors are hitting the market with new tools for prospect identification and targeting. The usual focus is to deliver targeted display advertising and content to organizations that are showing signs of being in the market, even if they haven't begun a formal evaluation process. One typical approach is to pair IP addresses with corporate identities, making it easier to identify when a particular company is searching for or engaging with relevant content. “Display ads for B2B are traditionally a huge waste of money because you reach people who may or may not be buying what you're selling,” says Demandbase CMO Peter Isaacson. “With ABM, if your target audience is 500 companies and you only want to target those 500, you can now purchase advertising to display only to those companies you're interested in.”
Think of that aspect of ABM as branding at a highly refined level—no billboards or TV spots during sports, just a steady stream of messages reaching only the screens of the decision-makers at relevant, likely buyers. “We're actually taking a page from the B2C world, where big brands like Coke and Pepsi work to create shelf space in our heads as part of their brand awareness,” says Sangram Vajre, cofounder and CMO of Terminus. “In B2B, you know which companies are going to buy from you and who the decision-makers are, so why wouldn't you do everything you can to get in front of them when they're making the purchasing decision?”
Veracode, a vendor of enterprise application cybersecurity, worked with Demandbase to help focus its ABM-based approach to selling into the Global 2000. “Our biggest focus now is on landing net-new [customers],” says Patty Foley-Reid, Veracode's director of marketing programs. Supporting that effort meant a heavy emphasis on providing sales with actionable intelligence on a small number of contacts, rather than delivering a high volume of leads.
“We can see spikes, when people from certain companies are coming to our website. Without knowing them as a lead, we still capture the intelligence that something's going on at that company we can take advantage of,” Foley-Reid says. “That's intelligence—marketing connecting the dots for sales so sales can act on it, and make their next phone call [to the prospect] that much more effective.”
The importance of marketing's alignment with sales cannot be overstated. In the Demand Metric study “Account-Based Marketing Adoption,” conducted in partnership with Demandbase, 60% of organizations using ABM report a revenue increase attributable to the strategy, and most of those reporting success enjoyed a boost of at least 20%. The laggards hadn't put their houses in order first. “When we looked at the 40 percent using ABM but not getting a revenue lift, they all rated their sales and marketing alignment poorly,” Demand Metric's Rackley says. “Alignment matters.”
Marketing's new role
Marketing's job is to listen, to advocate, and to add insights to the process at every step of a sale. Account-based marketing also relies on marketers to help sales take a longer-term view, rather than a narrow focus on quarterly results. “You're hardly ever going to get a good hunter to nurture a lead. They don't like to do it, perceive that they don't have time to do it, and are probably no good at it,” says Dan McDade, president and CEO of marketing services firm PointClear.
When collaboration software vendor PGi diversified its solutions and broadened its appeal beyond IT-minded buyers into sales and marketing departments, it needed a new sales and marketing strategy. The expanded solution set and buying audience left the sales organization off-kilter, and under conventional practices marketing was ill-equipped to help. “It was up to sales to figure out who the best contact was to try to sell the product to,” says Jennifer Zember, PGi's senior director of digital marketing. “Sales would think they weren't getting enough leads, we felt we were sending enough leads and they weren't following up.”
PGi's sales and marketing departments had always reported to a single executive vice president, but a shift to ABM made that alignment much more meaningful. “Today we work with sales leaders to understand what kinds of accounts we should be targeting and which roles at those accounts are going to be the best for them to speak to,” she says. “And we know how to target the right roles in each organization and make sure the salesperson is equipped with the right content for any buyer.”
That approach is table stakes for marketers using ABM. Marketing is responsible for identifying and understanding the triggers that indicate a prospect in the making, such as a company hiring a particular role or suddenly entering a new marketplace. Developing content that can be customized in an automated fashion is essential, primarily to avoid the need for an impractically large marketing staff to serve each account.
As useful as ABM is for customer acquisition, the approach also creates opportunities to engage in a meaningful fashion with existing accounts in ways that increase future lifetime value. To be truly successful, however, this strategy requires compensating marketers for ongoing conversions. “Often, your most valuable accounts are your current customers, but the traditional marketing model is focused on generating net new leads and some marketing departments don't get credit if they generate a campaign response from a current customer,” Engagio's Miller says.
Shifting to ABM presents B2B marketers with a raft of opportunities for engaging current and prospective customers in new ways. But some relationship-focused marketers worry that the approach may seem forced or impersonal. In fact, the opposite is true. Using ABM doesn't mean abandoning the one-to-one connection marketers have been striving to create for decades. It simply pairs that mind-set with the complex realities of the considered-purchase buying cycle. “People, not companies, buy things,” Leadspace's Bewsher says. “The magic of ABM is being able to connect the people to the company, understand the personas, and engage with the different individuals in the accounts.”