In 2015, a CMO.com headline declared, “Days of ‘Spray and Pray’ Marketing Are Done.”
While we may not yet have heard the death rattle for marketing campaigns that blast out generic messages far and wide in the hopes that someone will notice, more than one nail is in the coffin.
Since the 1990s, B2B marketers have recognized the potential for taking a more targeted, one-on-one approach that emphasized a personalized interaction with each customer. The challenge, however, was implementation. We lacked the tools to scale the operation effectively.
Today, with access to Big Data, marketing automation, robust CRM systems, personalization, content management, predictive analytics, social listening and artificial intelligence, the opportunity is within reach. These tools empower marketers to support sales and target key accounts with tailored messaging.
Account Based Marketing (ABM) is the realization of one-to-one marketing.
It’s been nearly 15 years since ITSMA coined the term Account Based Marketing, making this the perfect time to ask: What is the state of ABM today? Where is it going? And is it really changing the way we sell?
So, Is ABM Working?
We reviewed several benchmark reports on the state of ABM, and while the numbers differ slightly in each depending on the phraseology of the questions, the trends are clear.
The majority of companies today have implemented some form of ABM, with roughly 10% or fewer admitting that they have no current plans to adopt ABM.
But while most companies are doing something, ABM is still in its infancy. ITSMA’s 2018 ABM Benchmark Study finds that 52% of companies have had ABM in place for a year or less. Another 32% say they have been doing ABM for one to two years. Engagio and Salesforce Pardot’s 2019 ABM Market Research Report shows only 4.6% have had an ABM program in place for more than two years.
But there’s good news that should encourage companies to press forward. ITSMA ‘s 2018 ABM Benchmark Study states:
- 45% of companies that have had ABM in place for less than three years report significantly higher ROI.
- And of the 17% of companies with three or more years of experience with ABM, 80% are seeing significantly higher ROI.
Given these results, it’s not surprising that companies are devoting a significant and increasing portion of their budgets to ABM. The 2019 ABM Market Research Report reveals:
- On average, 29% of marketing budget dollars are devoted to ABM
- The amount budgeted for ABM is expected to rise by 8% this year
Demand Gen vs. ABM
As companies continue to gear up their ABM, marketing is understandably slow to move away from existing programs, most notably demand gen.
According to the 2018 ABM Benchmark Survey Report, 45% of respondents still prioritize their demand gen efforts over ABM, and just 15% of companies are focused on ABM almost exclusively.
But what the Engagio study shows is that as many as 64.8% of companies may be integrating their demand gen and ABM strategies.
So here’s your key takeaway: If your sales funnel is working…if you’re qualifying and converting healthy numbers of leads…and if you have some products and services with short, transactional or online sales cycles, then demand gen makes sense.
But if you also have high-dollar value products and services that require months of working with a buying team, it’s good to know that many companies are successful in blending ABM into their current marketing programs.
How you allocate your marketing and sales resources between demand gen and ABM will depend on your business model and your revenue split.
Benefits and Challenges Looking Forward
While ROI is important, it’s only one of the advantages that companies using ABM report. Also worth consideration:
- Better alignment between marketing and sales—This is key. Marketing and sales are communicating and collaborating. They’re breaking down traditional departmental silos to work strategically—with mutually agreed-upon objectives. This alignment signals a shift in corporate culture toward increased interdepartmental cooperation and communication. Their coordinated efforts mean a potential for higher ROI for sellers and a better, more consultative experience for buyers.
- More personalization and customization—Custom messaging speaks more directly to prospective customers’ specific needs, pain points and objectives. It’s also a strategic move away from generic messaging focused on lead generation to addressing accounts one on one.
- More focused and cost-effective customer acquisition process—While inbound marketing and demand gen moved marketing away from traditional spray-and-pray tactics, ABM is the next generation. If demand gen can be likened to fishing with a net—sweeping up massive numbers of leads—ABM is spearfishing. It’s a proactive, analytical outbound activity that targets accounts that are a good fit for a company’s products and services.
- More efficient use of marketing resources—Marketing can focus more of its time and budget on those accounts most likely to drive revenue.
But you still can expect bumps along the road. Survey respondents cite problems identifying key metrics and assigning attribution. Getting executive buy-in also is critical and requires selling management on the benefits.
But the number one challenge is execution. First, there’s the heavy lifting associated with building a framework that helps sales and marketing prioritize and score key accounts. Second, ABM requires massive coordination of many moving parts across departments — in particular, delivering enough custom content to educate targeted accounts at all stages of the buyer’s journey.
What You Can Do
If you’re still on the fence about ABM or unsure how to build a viable program, here are a few ideas to help you. Focus ABM on:
- High value accounts with potential for significant lifetime value
- Large buying teams and multiple decision-makers
- Long, complex sales cycles
- Opportunities to grow within the account through renewals, upsells and cross-selling into other departments
Identify meaningful KPIs
Rather than wasting energy proving marketing works, focus on measurements that help improve decisions. Look at engagement — contribution to the pipeline, number of qualified accounts, net-new accounts and meetings set. Then measure win-rates, revenue and attribution.
Of course, measuring attribution is easier said than done. It can be especially challenging when your customer’s journey meanders online and offline, goes through multiple channels, takes months or years and involves a large buying committee. Yet all of these issues are typical for companies implementing ABM.
To create a good attribution model, you need to identify the user touchpoints, such as website visits and email opens, which contribute to your desired outcomes. Then define the business results you want to achieve. To make sure you can make rapid course corrections, include top and mid-funnel measurements, such as MQLs, meetings and demos, along with bottom-funnel revenues. After all, sales and profits could be months or years in the making. You can’t afford to wait that long to make changes that have the potential to optimize results.
Blend marketing strategies
Take a lesson from the companies that are integrating marketing strategies (in particular demand gen and ABM). There is no magic bullet or one-size-fits-all approach, and demand gen is still best for low-value, online and transactional sales. And take a more expansive approach to ABM. In addition to the most strategic, one-to-one accounts—where marketers work with individual account teams to develop highly customized content and programs—consider:
- One-to-few ABM: Marketing and sales teams focus on small clusters of similar accounts to scale their content and messaging on accounts with related attributes and needs. For example, you might want to cater an event that targets a market segment rather than a single account.
- One-to-many ABM: Marketing and sales departments align their efforts to define the types of accounts that are the best fit and rely on technology to engage, personalize and track results. One way to do this is to use Vidyard video. It enables you to customize the content, so the video appears to be created for an individual even though you’re sending it to hundreds or thousands of target accounts.
Invest in your teams
Allocate more budget to data and analytics, support collaboration, and provide the resources needed for content creation.
ABM is changing the B2B go-to-market strategy with a more proactive, outbound effort coordinated across departments and targeting accounts (not leads) with more revenue potential.
At the same time, it’s flexible enough to work in tandem with other marketing initiatives to deliver the right message to the right audience at the right time.
Finally, and most importantly, interdepartmental alignment is breaking down traditional departmental silos and encouraging a change in corporate culture that is stimulating greater efficiency and cost savings while enhancing the customer experience.